In this Monday morning market briefing, the presenter gives a concise macro‑level snapshot of the upcoming trading week, noting the holiday‑shortened calendar (Good Friday and Easter) and the key U.S. employment data releases (ADP, ISM, Non‑farm Payrolls). He outlines the current sentiment in equity index futures, which are slightly lower after a prior rally, and notes modest moves in commodities (WTI crude down $1.31, gold down $5) and currencies (a modestly stronger dollar). The core focus is the fallout from the Archegos hedge‑fund default: large block sales of stocks such as ViacomCBS, Discovery, Baidu, and Tencent have triggered margin calls and forced liquidations at banks like Nomura and Credit Suisse, creating potential volatility in U.S. equities. He also updates on the Suez Canal blockage, reporting that the container vessel has been partially freed but traffic remains uncertain. A brief note on the EU’s threat to block AstraZeneca vaccine exports is included, though deemed low impact on markets. The briefing then reviews the week’s economic calendar – ADP, ISM, CPI, OPEC+ meeting, and President Biden’s infrastructure speech – and discusses how quarter‑end book‑squaring could add further pressure. He advises traders to watch for forced liquidations and book‑closing activity, and promises a deeper dive on the Archegos situation in a follow‑up video. The segment ends with a call to subscribe, engage on Discord, and a reminder of the limited trading days ahead.
Chapters
All right, very good morning to you. Hope you've had a fantastic weekend. And just as a reminder, obviously clocks change now in the UK, so back to the normal time differential between London and the States, so 5 hours New York, 6 hours Chicago. And a holiday-shortened week, of course, because we've got Easter, Good Friday, so the major global markets will be closed on Friday. But nonetheless, Nonfarm payrolls is still coming out, and obviously with payrolls coming out means we get the kind of front-running of employment data coming out of the States from ADP, ISM, jobless, so on and so forth. So quite a condensed, consolidated week in some respects. Otherwise, if you're watching this on YouTube, because this Monday briefing goes out to everyone at the point I'm filming, just going into 7 AM this morning in London, then hit the subscribe button. I really appreciate it if we can help grow the community online. But otherwise, getting straight into it, and usually what I do on a Monday is I don't dwell too much on the charts other than just give you a flavor about what the market open looks like this morning from a sentiment perspective. I'll let the guys on Amplify Live go into it in more detail on the charts, but a little bit negative in the overall equity index futures. The Dow, um, NASDAQ, S&P seen slightly lower. The NASDAQ future down about 130, S&P 29 European index futures, DAX, seem broadly flat at the moment. So a little bit of a pullback after we had that pop in prices to the upside at the close on Wall Street. And as you momentarily saw me flash up on the screen, there's a particular hedge fund that is causing some headline traction this morning and having led to a large volume of block sales on Friday's session. And that is reverberating into other banks now, essentially a hedge fund default situation and liquidation of positions that could well become quite a focal point as we go into the US session, given the nature of potentially a lot of single stock exposure in the US. But otherwise, the other thing that's moving this morning is WTI crude. We're down about $1.31, still respecting a relative range here down at the bottom chart. As you can see, it's been fairly seesaw in a price range of around $57.25 in the futures to $61.36. So a perfect kind of double top there to the, to the cent from the high on the 24th to the high that was seen on Friday's session. So backing off a bit, we have had an update on the Suez where basically now that container vessel that's been blocking the canal has been partially freed. And so, yeah, perhaps a little bit of downside just being seen on the back of that. Otherwise, slightly softer equity space. T-notes then up a touch, up around 4.5 ticks. Gold relatively quiet the overnight session, down $5. And in the currency markets, the greenback a little stronger, albeit just very moderate to minor gains of around 0.15%. So the major pairs down in EURUSD and CAD were about 15 to 20 pips each respectively. But let's get into it. Let's talk about a couple of things from a news perspective. And yeah, traders brace after fire sale of stocks linked to a hedge fund based out of a fund manager from South Korea. And what basically was, was happening was there was a couple of US stocks, namely ViacomCBS and Discovery. They both closed down by more than 20% on Friday, but they were seeing some substantial selling pressure throughout last week. I mean, it didn't really spill over into the broader market, but substantial losses in those stocks. And a block sale essentially just meaning that particularly large order going through from an institutional basis as they look to manage client positions. And what was happening here was essentially the, the fund which had large exposures to these companies and also several Chinese technology companies. Um, last week Baidu was down more than 18%, and Tencent, which is a particularly large firm in China, was down 36%. 3%. They were hard hit, and the declines prompting margin calls from one of Archegos's prime brokers, triggering similar demands from cash now from other banks. Nomura is said to be one of the casualties that's emerged from the overnight session. Their shares have traded down around 16-17% now, Nomura, in Asian trade. Facing a total wipeout of profits for the second half of the financial year following that fire sale of stocks that they've had to conduct. Credit Suisse, they've also come out this morning and they did a pre-trading open update, kind of a statement that they've issued, and they've basically said that there's going to be a highly significant hit to its first quarter results after it began exiting positions of a large US hedge fund that defaulted on margin calls last week. Um, and this is what CNBC will be talking about this morning. So, um, what does this mean for general equities? Well, I guess it's, it's how bad is the problem and how big was the exposure, how much then consequently needs to be unwound. And of course, this comes in the context of what is month-end and quarter-end, which, given the nature of some quite excessive outperformance in a number of key equity sectors, could lead to some book squaring, which could also add to some volatility and volume to the mix. In addition to, particularly today, I'm sure with a quiet economic calendar to really start Monday's session, quite a lot of focus at the open on Wall Street could well be on this, on, you know, who are the other companies that positions need to be exited. One thing I would say is that when I do see the likes of Tencent down more than 33%, does make me feel a little bit like, well, you know, fundamentally there's nothing really wrong to some respect with these firms. It's just a case of positions having to be exited to meet margin calls. So when a company is down a third of its value, half of its value, or more, you've got to think that there's going to be some, some kind of buyers coming in looking for good value down at that low price. So be interested to see how, how that really plays out. Um, but otherwise, in terms of the other major news, as I said, the Suez, um, still garnering a lot of attention over the weekend. The container vessel blocking the Suez has at least been partially freed, according to people with direct knowledge of the matter. Still a little bit short on comprehensive details and exactly what's going on as yet, but I'm sure more will emerge as we go on through the morning. There's been no immediate clarity on the crucial question of when traffic in the canal will restart. The ship has a damaged hull, apparently, and it's not clear on how soon it'll be able to clear the way for other vessels in order for them to pass. Last night it was reported that in terms of the number of ships now that have been kind of backlogged due to that blockage is now more than 450. And last night, whether this is still applicable or not, there were comments out of the president's canal advisor in Egypt who basically said if the ship hasn't refloated by Monday night, then on Tuesday containers will start getting offloaded to make the vessel lighter as well. But it looks like we're nearing the beginning of the kind of solution to this, to this problem that arose at the end of last week. Um, the other thing then is about vaccines. Obviously this is ongoing, lots of headlines continue on this front. Uh, the EU reported will block exports of AstraZeneca vaccine if the company fails to deliver the doses bought by the region on time, according to the EU vaccine czar. So far, AstraZeneca has met only 30% of its commitment and has pledged to deliver over 70 million doses in the second quarter to the EU alone going forward. So this isn't really a new threat, I would say. This is probably more just a reiteration of Europe just trying to keep pressure on, on that stance of AstraZeneca specifically at the moment. So I don't think it really has too much of a tangible value right now for the market open. Otherwise, for the week, it is a holiday-shortened week. We've obviously got Good Friday, markets closed, and then for Easter on Monday, some markets will be open. Places like the UK will remain closed for Easter Monday. But what does that mean? Well, a couple of things. In a normal run-up to nonfarm payrolls, we do get ADP on Wednesday. Uh, you've also got ISM on Thursday, the jobs report on Friday. Um, analysts at ING made a good overall top-level summary. They said that all of those figures should be pretty strong, in fact, and the main reason for that is better weather in March versus February. If you remember, we had that kind of great freeze, particularly in Texas and other areas in the US, during the period of February. And we've also had, in combination with that, a strong rollout of the vaccination program in the US, which continues to pick up at record pace, and also therefore subsequently the ongoing reopening steps that are being taken by individual states that is helping them lift activity. And as activity lifts, then necessity to then pick up, pick up jobs again and start employing people once more. So probably expecting a pretty decent number across the board there from, from those particular readings. Other ones to be aware of, I mean, stateside on Wednesday we do have Biden outlining his Build Back Better green energy and infrastructure plan. So that $3 trillion plus plan, still yet to be really determined on the details. He's due to give a speech directly on that on Wednesday, so that definitely could be an interesting event for the week. Also on Wednesday, you get the eurozone latest flash CPI numbers coming out. So that's expected to rise to 1.2% year on year from 0.9%, chiefly being buoyed at this point by the rise that we've been seeing in energy and food prices. Then moving on to Thursday, as much as there's this data coming out, the other thing, of course, we're looking out for is OPEC+. They're having their meeting. Just to recap, given the persistent demand worries, some of the pullback in prices that we've seen, expectations are generally in place that the OPEC+ cartel are going to just roll over the supply pact into May at this week's meeting. That was according to sources at the end of last week, and they probably very much expect that to be the case because we've been seeing COVID cases picking up quite rapidly in mainland Europe, but also in the US, and subsequently And further restrictions being prolonged in some of these aforementioned areas has meant that demand's still somewhat questionable and perhaps going to get a little bit further impeded, um, with this latest COVID wave that we've been seeing that was in focus last week. And so probably makes the most sense that OPEC will simply just roll over at this point. So looking for confirmation of that, the meeting on, on Thursday, and then Nonfarm Payrolls, of course, on, on Friday. Markets will be closed, so it's going to be for informational purposes only, I guess, in that respect. Really, any markets that are open are going to be particularly illiquid and therefore very volatile. Um, Friday is expected to show the strongest rebound in non-farm in months. Again, expanding vaccinations paired with the pickup in economic activity is going to have boosted hiring, essentially. Um, how much of that means, um, something more meaningful for the Fed? I don't think a great deal. It's just more of a reflection of those, those reasons. And so therefore, I think the market will just take it for what it is on a very short-term basis. So, um, it could be something to be mindful of, I guess, when markets do reopen next week following the holiday at the end of the week. And that's, that's pretty much it really. What I'll do is, obviously, there's, there's a lot of, um, interesting questions around this, this hedge fund default and what the implications and reasons behind that have been. So what I'll do, I'll try and get Eddie to do a specific video just on that to put out later on today. So remember, subscribe to the channel and hit the bell icon. You'll get a notification as soon as that goes out live. But he can obviously go into it in way more detail than I, from the macro top-level perspective. Um, that is it really. Not, not a great deal of, of real news flow other than those ones there that I've talked about before the market opened. So Net-net for today, we've had a little bit of a pullback in US futures just after the ramp-up that we saw into the close on Friday. Definitely, I think we need to keep an eye out for any further fire sale of certain US equities at the open on Wall Street. We've already seen Nomura, Credit Suisse getting hit on the back of that, on these margin calls for that hedge fund. Otherwise, then We do have quarter end, and so I can continue to keep you updated as and when I hear any particular flow or expectations from any institutions about the impacts of that for the coming days. But certainly we've only got today through to Wednesday for quarter end, so it could be an interesting element to just consider as we go through the rest of session. And generally what that means for any new traders is that you could see, you know, kind of I guess a lack of fundamental connection to some market movement that you might see in, in, in the equity market. Kind of like when a margin call happens and you get forced liquidation of equity holdings, you can see downside in equities in index futures if the proportionate kind of weight is enough in the size of those liquidations, or how, how big is the breadth of those liquidations. And so without much in the way of real reason, equity markets can come under pressure. Kind of similar things can happen as well with quarter end, with book squaring, as people— fund managers look to close out positions in order to revert back then if they've had certain outperformance in, say, tech, for example, back to then the original parameters of the portfolio mix. And so just something to be aware of. And then, yeah, and that is it really. So any questions at all, just let me know. Otherwise, I'll see you guys in the Discord chat later on this morning. All right, have a good week. Thanks very much.
