February is historically the second-worst month of the year on the calendar for stocks and that was certainly the case this year as they struggled. The seasonal bull market in gold also worked beautifully this year with it rising to an all-time high in February.
The calendar has now turned and it’s time for a look at March seasonals.
One general trend in March-April is seasonal weakness in the yen, with AUD/JPY particularly strong. That’s part of a generally positive backdrop in the risk trade in those two months, though the pandemic skews some of the more-recent data.
Another trend that kicks off in March is seasonal strength in oil and that theme runs until the end of June. OPEC has hinted that it doesn’t want to increase production and that could be a helpful catalyst, though we’re also watching what happens in Ukraine and that could be a drag on crude (though I believe all the Russian crude is already getting to market). The trend is moderate in March then really ramps up in April-June.
A hot trade so far this year has been Chinese stock markets and they will definitely be in focus this week with the National People’s Congress but there is some help from seasonals as Feb-April is a positive time.
On net though, March is an extremely strong signal for anything but April is particularly upbeat. That argues for patiently waiting for opportunities ahead of a better seasonal backdrop in April.
This article was written by Adam Button at www.forexlive.com.February is historically the second-worst month of the year on the calendar for stocks and that was certainly the case this year as they struggled. The seasonal bull market in gold also worked beautifully this year with it rising to an all-time high in February.The calendar has now turned and it’s time for a look at March seasonals.One general trend in March-April is seasonal weakness in the yen, with AUD/JPY particularly strong. That’s part of a generally positive backdrop in the risk trade in those two months, though the pandemic skews some of the more-recent data.Another trend that kicks off in March is seasonal strength in oil and that theme runs until the end of June. OPEC has hinted that it doesn’t want to increase production and that could be a helpful catalyst, though we’re also watching what happens in Ukraine and that could be a drag on crude (though I believe all the Russian crude is already getting to market). The trend is moderate in March then really ramps up in April-June.A hot trade so far this year has been Chinese stock markets and they will definitely be in focus this week with the National People’s Congress but there is some help from seasonals as Feb-April is a positive time.On net though, March is an extremely strong signal for anything but April is particularly upbeat. That argues for patiently waiting for opportunities ahead of a better seasonal backdrop in April.
This article was written by Adam Button at www.forexlive.com. Read MoreForex Orders
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