MARKET RECAP 9th MAY – 14th MAY 2021

Hi traders and welcome to a brand new recap.

How was trading this week fo you guys? We hope that you are members of our free Telegram channel where we give out free trade ideas and videos for you to watch. Need the link? No problem just click here.

Let’s have a look at the highlights this week.

On Sunday it was reported that US fuel pipeline operator Colonial Pipeline was forced to shut down it’s fuel network. Colonial Pipeline operates an over 5,500-mile pipeline network from Texas to New Jersey.

The main points of the story are

  • a ransomware cyberattack forced the company to shut its network down.
  • As of posting the network is still down. which threatens a shortage of fuel in the eastern US.
  • major segments of the Colonial system remain offline.
  • truckers in the US have been given the go-ahead to extend their driving hours in an effort to ensure fuel deliveries
  • Gasoline futures wrose higher on the news.

On Monday we saw Cable (GBP/USD) had a huge move of over 170 pips.

SNP leader Nicola Sturgeon told Boris Johnson that an independence referendum was a “matter of when, not if” but the market disagreed.
Cable smashed to 1.4000 and surged to 1.4158 which was the highest since February. The SNP is one seat short of a majority and could work with the pro-indepence Greens to make it happen but the market is making its vote.
You could argue that some of the pop in GBP is the tail risk of a large SNP win coming out of the market. You could also argue that the lack of a big surprise turnout from SNP supporters suggests that enthusiasm for a referendum is also modest. Maybe a better argument is that it’s technical. We will never really know.
Also on Monday we heard Boris Johnson as he gave us details on the next step of lockdown easing.
  • Move to step three of lockdown easing on May 17.
  • Indoor hospitality to reopen
  • Indoor sectors such as cinemas, pubs, restaurants, hotels to reopen to some capacity limits
  • Social distancing rules to remain in public settings in England.
  • People to make own judgment in private
  • This unlocking is a considerable step on the road to normality
  • I am confident we can go further with lockdown easing’s
  • We will be saying more later this month on what role there could be for certification’s and social¬† distancing

With GBP/USD already in a bullish mood, this news helped it even further.

Later on in the week Elon Musk announced that Tesla had suspended taking Bitcoin for vehicle purchases.

  • Musk says is concerned about the environmental impact of bitcoin, increasing use of fossil fuels for mining & transactions, especially coal
  • Tesla will not be selling its BTC
  • Will use BTC as soon as mining transitions to more sustainable energy
  • looking at other cryptos that use less energy

We saw Bitcoin prices drop sharply until finding support at $47,000 where it had previously bounced in March and April. Was it all a ploy to get Bitcoin cheaper to buy more? Musk to cryptos is like Trump was to the US Dollar. A tweet/comment can send the markets crazy!! Bitcoin/USD price is currently floating at $50400

Lastly on Friday we had the US May preliminary consumer sentiment data which came out at 82.8 when 90.0 was expected.

  • Weakest since Feb
  • Prior was 88.3
  • Current conditions 90.8 vs 99.8 expected
  • Prior current conditions 97.2 prior
  • Expectations 77.6 vs 84.5 expected
  • Prior expectations 82.7
  • 1-year inflation 4.6% vs 3.5% expected (highest since 2008)
  • 5-10 year inflation 3.1% vs 2.7% Prior
This is a poor reading and a big surprise. We saw the Dollar Index drop to a low of 98.2 with several hours of trading left. It is actually the US Dollar seasonal bullish period would you beleive. Can it pick itself up? The million Dollar question (excuse the pun).
Catch you next week traders.
T & T


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