Five trends that went well in the month


Standards to watch in April

1) Natural gas gains

This is one I wrote about last year and I became a winner. Natty rose in April for 9 consecutive years and has a strong seasonal trend of earnings that runs from April through June, with an average gain accumulated in 10 years close to 10%.

Technically, natural gas is about 5% above the 2019 low, close to $ 2.50. This level has been a recurring source of support in the past two years.

Standards to watch in April

2) Will the implementation of CAD continue?

The Canadian dollar has been the best performance so far this year and, if seasonal patterns continue, earnings will continue in April. The US dollar recorded a gain of 1.77% in April over the last 10 years and only recorded a decline in the month twice since 2006. The strength of the parallel market coincides with the seasonality of oil and natural gas.

Seasonal heat map CAD

3) A good start for the USD … more

The US dollar is stronger against the euro and yen in the early hours of April, but this may not last. The average fall in the dollar index in April is 1.1% in the last decade. This is the worst of any month. I would be a bit worried that low profitability has already generated some weakness, but one of the catalysts could be weak profits, more flaws in economic data, or a buildup of US-China relations.

Another theory about this is that US statistical agencies have struggled for seasonally
set in Q1 for years and the soft economic data has a buffer over
Fed expectations around the month of April each year. Historically, weakness has been particularly strong against the euro, which also has its best month in April traditionally.

4) It's a good time to be in stock markets

Stock markets globally tend to do well as spring begins. The S & P 500 only fell once in April since 2005 (a modest reading of -0.75% in 2012). The average in the last decade is 1.77%, which makes it just the fifth best month, but adjusted for low volatility, and is even higher. April is also a strong performer in almost every other place.

5) If you ignore the Brexit news

I mean, it can not get any worse, right? Brexit is a complete mess and there is no easy solution but if you are in doubt about buying cable and waiting for a positive result, here is something to consider: April is easily the best month for cable in the last decade with a return Average shy 2%. The bad news is that it fell last April in the first decline of the month since 2004.

GBP seasonal heat map


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