The focus of the new week is on the leverage offered by Archegos Capital Management, with media reports claiming the hedge fund has been forced to reduce its portfolio of technology stocks due to margin calls. Fears of a ripple impact from market positioning, which were blamed for weighing on technology stocks on Friday, did not materialize in Asia – but it is a story worth following.
Despite the positive news from Suez, risk assets appear to be facing headwinds from Europe, where case numbers in northern Europe continue to rise, and German Chancellor Angela Merkel may now seek legal authority to override regional leaders’ reluctance to impose lockdowns. This corrective dollar recovery does not appear to be approaching the end of its path. The dollar could be helped by good March labour market data and the introduction of President Biden’s infrastructure package. This week’s DXY high is predicted to be 93.20.