हर दिन बाजार विश्लेषण

The mighty dollar is sinking again this morning as numerous factors gang up on the world’s most heavily traded currency.

We’ve talked about seasonal trends previously with DXY peaking more or less bang on cue towards the end of March. Positioning is interesting and relevant as the latest futures report tells us that USD short covering has lost momentum. The decline in US bond yields has also fully justified selling in the greenback with Fed policy makers happy to stress that rate hikes are some way off, though the recent uptick in yields does warrant some attention.

In the short-term at least, the majors are approaching some serious technical levels with:

• JPY nearing 108
• EUR through 1.20
• and GBP above 1.40

It seems a lot of dollar positive news is firmly embedded in the buck while traders are only seeing upside in euro negative news for example.

As we move into the second half of the year, we may well finally see what many Wall Street analysts were predicting at the start of the year, with the DXY falling nearer to 89.00 as a synchronised global recovery takes shape.

Stock market calm upset

US stocks slipped off their record highs and European markets are currently mixed and modestly in the red. Tech led the selling with the Nasdaq down nearly 1% as eyes turn to some significant US companies who report this week like Intel and American Airlines, while we covered Netflix earlier today.

Interestingly, the VIX picked up off its lows yesterday as the S&P500 traded around 16% above its 200-day moving average, a level that has spurred a selloff on numerous occasions in the last eight months.

The calm in stocks is also seen in the Dow which has gone more than 30 days without a loss of 1%, the longest streak since just before the pandemic.

UK jobs jolt

Important UK labour figures were released earlier this morning with the unemployment rate surprisingly dipping to 4.9%, despite the winter lockdown. The furlough scheme is certainly proving its worth as a band-aid for the jobs market, but many economists predict the jobless rate will rise to north of 6% when the scheme finally unwinds in September. That much of the employment upheaval is in the consumer services sector makes it hard to predict when these jobs might come back, and this is a key question for many developed economies. The new EU-UK relationship will also be another factor in the equation.

Cable is consolidating its gains and rising for a seventh straight day, enjoying a rising EUR/USD as well as the strong data.

Traders have been waiting for the reopening effect and fast vaccine rollout to kick into GBP, so patience has very much been a virtue!

अस्वीकरण: इस लेख के कंटेंट में व्यक्तिगत राय शामिल हैं तथा इसे व्यक्तिगत रूप से तथा/या अन्य निवेश सलाह तथा/या एक प्रस्ताव तथा/या वित्तीय साधनों में किसी लेन-देन लोभ तथा/या गारंटी तथा/या भविष्य के प्रदर्शन की भविष्यवाणी के रूप में नहीं लिया जाना चाहिए। ForexTime (FXTM) व उसके एफिलिएट, एजेंट, निर्देशक, अधिकारी या कर्मचारी उपलब्ध कराई गई किसी भी जानकारी या डेटा की परिशुद्धता, वैधता, समयबद्धता या संपूर्णता की गारंटी नहीं लेते हैं तथा उसी के आधार पर किसी भी निवेश से उत्पन्न होने वाले नुकसान के लिए दायित्व ग्रहण नहीं करते हैं।

Netflix is set to release its Q1 earnings after US markets close on Tuesday, and it’s all about how well the streaming giant can pick up from where it left off in 2020.

Recall that the pandemic prompted a massive front-loading of Netflix subscriptions, as households starved for entertainment amid lockdowns drove the company’s global customer base past the 200 million mark by the end of last year.

For Q1 2021, Netflix has guided for an additional 6 million subscribers, while Wall Street expects that tally to be closer to 6.3 million. That’s still a pretty healthy figure, even though it pales in comparison to the 15.77 million new paying members who signed on during the same period a year ago.

Sauntering subscriber and share price growth

Looking ahead, shareholders appear cognizant that Netflix would find it tough to replicate the growth spurts it experienced last year. The same can be said for its share price.

After surging by 67.1% in 2020, Netflix has only managed a gain of 2.54% so far this year. That’s slower in comparison to the year-to-date performances of:

• Disney: 3.45%
• Amazon: 3.53%
• Nasdaq 100: 7.91%
• Facebook: 10.65%
• Google: 30.65%

Netflix has clearly been a laggard within the famed FAANG group, with the streaming company now languishing 5.44% below its record high, set on 20 January 2021, which was also the day after its last quarterly earnings announcement.

From a technical perspective, Netflix’s share prices found support at its 200-day simple moving average (SMA) in March, using it as a platform to launch back above its 50-SMA this month. However, with the bullish momentum in the stock plateauing, while a close above the $555 mark having proved hard to come by since mid-February, Netflix could do with a positive catalyst to catch up with the rest of its peers.

Perhaps that catalyst may arrive at the company’s earnings release later today.

What are markets expecting for Netflix’s Q1 financial results?

Three words: record setting quarter.

Wall Street expects Netflix to post its highest-ever revenue and net profit for a single financial quarter. The top line is expected to breach the $7 billion mark for the first time in the company’s history, thanks to price hikes in the US, Germany, UK and Ireland. Meanwhile, the company’s adjusted net profit is slated to come in at $1.45 billion, and that should translate into an adjusted earnings per share of $3.18.

However, look beyond the historic numbers and the broader industry harbors troubling signs for Netflix.

Streaming wars eroding Netflix’s advantage

According to a report by Parrot Analytics, just over half (50.2%) of the original series that viewers worldwide wanted to watch online over the past three months were by Netflix. While that figure still dwarves second-placed Amazon Prime’s share of 12.2% for the same period (January-March 2021), Netflix’s market share has clearly dropped from the near-65% share it enjoyed some two years ago.

Within the US alone, the decline in Netflix’s market share is even more obvious. According to Bloomberg Intelligence data, Netflix’s share of the US streaming pie has gone from near-total dominance of 96.04% in Q1 2018 to just 44.43% as of Q4 2020.

As the competition for eyeballs intensifies, Netflix is set to find it harder to gain more subscribers.

Netflix not taking things lying down

That doesn’t spell the end of Netflix. This year alone, the world’s largest streaming platform aims to release over 70 movies. The streaming giant earlier this month also announced a deal with Sony, which is reportedly worth over $1 billion. The agreement gives Netflix the rights to exclusively show Sony movies released from 2022 onwards after they’ve completed their theatrical runs.

That should keep their 210 million subscribers (estimated as of end-March) and counting, entertained with popular franchises such as “Jumanji” and “Spider Man” over the coming years, even with the potential prices hikes looming.

Armed with customer loyalty while flexing its pricing power, Netflix still has a lot within its arsenal to withstand the heightened competition for viewers’ attention.

How might Netflix’s share price react after Tuesday’s earnings?

Markets are pricing in a 7.2% move for Netflix’s share price when markets reopen on Wednesday. Although NFLX could go either way, it’s notable that shareholders typically sought to use these announcements as selling opportunities. The stock declined the day after 8 of the past 11 earnings.

Still, a 7.2% move to the upside would set a new record high for Netflix’s share price, while a similar-sized move to the downside could see the stock looking for support around its 200-SMA once more.

How exactly will this NFLX stock react this week? We’ll just have to stay tuned and "see what's next".

अस्वीकरण: इस लेख के कंटेंट में व्यक्तिगत राय शामिल हैं तथा इसे व्यक्तिगत रूप से तथा/या अन्य निवेश सलाह तथा/या एक प्रस्ताव तथा/या वित्तीय साधनों में किसी लेन-देन लोभ तथा/या गारंटी तथा/या भविष्य के प्रदर्शन की भविष्यवाणी के रूप में नहीं लिया जाना चाहिए। ForexTime (FXTM) व उसके एफिलिएट, एजेंट, निर्देशक, अधिकारी या कर्मचारी उपलब्ध कराई गई किसी भी जानकारी या डेटा की परिशुद्धता, वैधता, समयबद्धता या संपूर्णता की गारंटी नहीं लेते हैं तथा उसी के आधार पर किसी भी निवेश से उत्पन्न होने वाले नुकसान के लिए दायित्व ग्रहण नहीं करते हैं।

The Dollar got hammered today.

It was bullied by G10 currencies as Treasury yields lingered near their lowest level in five weeks.

In our morning report, we highlighted how strong economic data from the two largest economies in the world was likely to fuel the risk-on mood. Well, this has compounded the Dollar’s woes – further denting appetite for the safe-haven currency. The Dollar Index (DXY) has fallen to its lowest level since early March, wobbling around the 91.10 level as of writing.

With the DXY trading below the 200-day Simple Moving Average (SMA) and residing within a bearish channel, the path of least resistance points south. But it does not end here.

The MACD has crossed below the zero line which is considered bearish while prices have cut through the 91.30 support like a hot knife through butter.

A solid daily close below 91.30 could encourage a decline towards 90.80, 90.20, and 90,00 respectively.

Taking a look at the weekly timeframe, a similar picture is playing out. Things have gone downhill for the DXY since bulls failed to push prices beyond the 93.47 level. If the DXY concludes this week negative, we could see a three crows pattern formation that signals the reversal of a trend. In this case, such a development may mark the end of the bullish trend that started after prices secured a weekly close above the 91.10 lower high.

Zooming out into the monthly, April’s monthly candle could produce a bearish engulfing pattern. Such a pattern tends to occur at the start of a downtrend or to signal the continuation of the current trend. For this setup to materialise, a monthly close below 90.50 needs to be achieved.

Is there still hope for bulls?

Bulls certainly have a very steep hill to climb to reclaim back some control. If the downside momentum fizzles out around the 89.50 support level, this could provide a foundation for bulls to push prices back towards 91.00 and higher.

अस्वीकरण: इस लेख के कंटेंट में व्यक्तिगत राय शामिल हैं तथा इसे व्यक्तिगत रूप से तथा/या अन्य निवेश सलाह तथा/या एक प्रस्ताव तथा/या वित्तीय साधनों में किसी लेन-देन लोभ तथा/या गारंटी तथा/या भविष्य के प्रदर्शन की भविष्यवाणी के रूप में नहीं लिया जाना चाहिए। ForexTime (FXTM) व उसके एफिलिएट, एजेंट, निर्देशक, अधिकारी या कर्मचारी उपलब्ध कराई गई किसी भी जानकारी या डेटा की परिशुद्धता, वैधता, समयबद्धता या संपूर्णता की गारंटी नहीं लेते हैं तथा उसी के आधार पर किसी भी निवेश से उत्पन्न होने वाले नुकसान के लिए दायित्व ग्रहण नहीं करते हैं।

Asian shares were mostly higher on Monday while US equity futures are trading mixed after the S&P 500 and Dow Jones closed at all-time highs on Friday.

Last week’s strong economic data from the United States and China have fueled hopes of a solid global economic recovery. Bumper corporate earnings from US banks have also injected equity bulls with enough inspiration to elevate indices to record highs. These themes are likely to support the risk-on mood despite global Covid-19 cases hitting a weekly record last week. European stocks have opened marginally higher this morning amid the market positivity and this could trickle down into Wall Street later in the afternoon.

Despite all this positivity, it does feel like a sluggish start to what should be a busy week for markets. Today, the calendar is void of any major economic releases in the United States, United Kingdom and Europe. There is little movement across currency markets at the time of writing while Gold is hovering around $1777. But given how earnings season is set to build momentum through the week and major economies will release key data that could influence sentiment, things could liven up in the next few days.

Dollar still sulking

The dollar has stumbled into the new week under pressure as Treasury yields lingered near their lowest in five weeks. The greenback has weakened against most G10 currencies this morning with the Dollar Index (DXY) wobbling above the 91.50 support. Since the start of April, the DXY has lost roughly 1.80% and this may continue despite the string of encouraging data from the United States pointing to an accelerated economic recovery. As investors accept the Federal Reserves' vow to keep an accommodative monetary policy stance until it sees stronger employment and inflation, dollar bears might remain in the driving seat.  With the DXY trading below the 200-day SMA and respecting the bearish trend, further downside could be on the cards. A solid breakdown below 91.50 should open the doors towards 91.30 and 90.80.

Commodity spotlight – Gold

Gold drew ample strength from falling Treasury yields and a weaker dollar last week. The commodity is up over 4% this month and has the ability to push higher amid rising tensions between the United States and Russia. However, gold bears could still make an appearance as economic data from the two largest economies in the world remains highly encouraging and may boost global sentiment. If risk-on becomes the name of the game, it could hit appetite for safe-haven gold.

Looking at the technical picture, gold bulls are back in town and look to have an appetite for $1800.

अस्वीकरण: इस लेख के कंटेंट में व्यक्तिगत राय शामिल हैं तथा इसे व्यक्तिगत रूप से तथा/या अन्य निवेश सलाह तथा/या एक प्रस्ताव तथा/या वित्तीय साधनों में किसी लेन-देन लोभ तथा/या गारंटी तथा/या भविष्य के प्रदर्शन की भविष्यवाणी के रूप में नहीं लिया जाना चाहिए। ForexTime (FXTM) व उसके एफिलिएट, एजेंट, निर्देशक, अधिकारी या कर्मचारी उपलब्ध कराई गई किसी भी जानकारी या डेटा की परिशुद्धता, वैधता, समयबद्धता या संपूर्णता की गारंटी नहीं लेते हैं तथा उसी के आधार पर किसी भी निवेश से उत्पन्न होने वाले नुकसान के लिए दायित्व ग्रहण नहीं करते हैं।

New Covid-19 cases hit a pandemic record, exceeding 5.2 million last week, even as the vaccine continues being administered around the world. Still, risk assets have been relatively immune to negative headlines surrounding the pandemic, with Asian stocks now in the green.

With the US earnings season underway amid a relative calm in US Treasury markets, benchmark US stock indexes such as the Dow, S&P 500, and the Nasdaq 100 look set to post new record highs this week, even though the futures contracts are dipping slightly at the time of writing.

As for the currency markets, amid a softening US dollar, it remains to be seen whether the likes of the euro and the Canadian dollar can take advantage of the potential catalysts in the coming days:

Monday, April 19

• Canada unveils federal budget

Tuesday, April 20

• Johnson & Johnson earnings (before US markets open)
• Netflix earnings (after US markets close)
• Apple unveils new products

Wednesday, April 21

• Bank of Canada rate decision
• Canada CPI (inflation)

Thursday, April 22

• ECB rate decision
• ECB consumer confidence
• Intel earnings
• American Airlines earnings

Friday, April 23

• Eurozone, UK, US Markit manufacturing PMI
• US new home sales

Watch Apple’s share price

At its event labelled “Spring Loaded”, the iPhone maker is expected to announce new products, including a line of new iPad Pros. The iPad contributed over 8% to Apple’s total annual revenue in three out of the past four years. Still, last year’s figures were the highest for iPad sales since 2014, as consumers flocked to the tablet as work and schooling commitments became home bound amid the lockdowns worldwide.

It remains to be seen whether the confirmed features of this new iPad Pro would also excite market participants, considering that Apple’s share prices have failed to match its January record high. The stock is still some 6.3% lower since recording its highest ever closing price on January 26th.

During the same period (since 26 January):

• Facebook has surged 8.56% to post a new record high on April 7
• Alphabet shares have climbed almost 20% to hit a new record high on April 16
• The Nasdaq 100 has climbed 4.09% to post a new record high on April 16

Perhaps the iPad Pro could stir up enough enthusiasm this week for Apple’s stock to allow it to catch up with other tech stocks.

CAD to still outperform G10 peers?

The Canadian dollar is the second best-performing G10 currency against the US dollar so far this year, and has also strengthened against all G10 currencies except for the Norwegian Krone. However, the CAD has fallen against most of its G10 peers on a month-to-date basis.

Still, Canadian dollar bulls can take heart from the fact that USDCAD’s 50-day simple moving average has resisted any major upward move for this currency pair to keep its downward trend intact.

From a fundamental perspective, the Canadian dollar’s strength has been fuelled by the robust recovery in Canada’s economy.

Today, Prime Minister Justin Trudeau is set to release the government’s first budget in two years. This increased spending of tens of billions could help recover the last 296,000 of the 3 million jobs it lost to the pandemic.

With the economy apparently on firmer footing, the Bank of Canada could announce the paring back of its bond purchases this week, and may even comment about a potential rate hike sooner than 2023.

Should that happen, that could drive Canada’s government bond yields even higher, which may then serve as a tailwind for the CAD.

अस्वीकरण: इस लेख के कंटेंट में व्यक्तिगत राय शामिल हैं तथा इसे व्यक्तिगत रूप से तथा/या अन्य निवेश सलाह तथा/या एक प्रस्ताव तथा/या वित्तीय साधनों में किसी लेन-देन लोभ तथा/या गारंटी तथा/या भविष्य के प्रदर्शन की भविष्यवाणी के रूप में नहीं लिया जाना चाहिए। ForexTime (FXTM) व उसके एफिलिएट, एजेंट, निर्देशक, अधिकारी या कर्मचारी उपलब्ध कराई गई किसी भी जानकारी या डेटा की परिशुद्धता, वैधता, समयबद्धता या संपूर्णता की गारंटी नहीं लेते हैं तथा उसी के आधार पर किसी भी निवेश से उत्पन्न होने वाले नुकसान के लिए दायित्व ग्रहण नहीं करते हैं।