This week could be summed up in one way: buy everything while selling paper currencies. Investors seemed to push up the prices of the vast majority of popular futures contracts in the passing week.
Oil came to the forefront, with prices seeming to rise about 7 percent this week to $63 per barrel of WTI and $67 per barrel of Brent crude. One of the main reasons for the rise in the price of black gold may have been the news that the International Energy Agency and the Organization of the Petroleum Exporting Countries raised their oil demand forecasts for 2021 by 230,000 and 100,000 barrels per day, respectively. Thus, the market has begun to optimistically estimate a return to economic normalcy in the second half of this year due to the possibility of a significant portion of the population being vaccinated in Q3. Deferred demand, travel impediments, vacations - this could be a time of increased oil consumption unless government restrictions remain in place during this time.
Other markets that investors may have paid attention to this week were silver and gold. The former seems to have gained almost 4 percent this week and the latter more than 2 percent. Silver is mainly an industrial metal that could benefit from good economic data, especially from China. Gold, on the other hand, may be supported by a halt in the rise in US bond yields and strong inflation readings. The U.S. annual inflation rate rose to 2.6 percent in March, slightly above forecasts of 2.5 percent, mainly due to energy prices. That's the highest level in more than two years. This, in turn, could exacerbate negative real interest rates, which could favor gold prices.
It is impossible to pass indifferently by successive records on stock exchanges, both in the USA and in Europe. The strongest growing index in recent days seems to be Nasdaq 100, which increased by 1.5 percent since the beginning of the week. In second place is the all-time record-setting German DAX with an increase of about 1.3 percent. The S&P 500 has risen similarly, by 1.2 percent, also breaking records. The DJIA appears to have gained less than 1 percent.
The cryptocurrency market also set new records this week. Bitcoin and ethereum have set new peaks. And in the last 7 days they seem to have gained 4.6 and 15 percent respectively. After the debut of Coinbase, the highest valued exchange in the world, it seems that the market can wait for the debut of the first US ETF for bitcoin. The SEC is already said to have at least eight applications pending this spring or this summer.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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