Oil prices tends to rally before and after Easter Sunday
Euro/dollar’s performance becomes clearer when drilling down the data
Patterns emerge when focusing only on Easter Sunday occurring in March
Most participants who trade based on seasonal patterns, enjoy combining the market’s performance with certain events like the Christmas and Easter breaks. This report focuses on the performance of certain key market assets: (1) during the final week before Easter Sunday, (2) the first week after Easter, (3) 30 days after Easter Sunday. While past performance is not a guarantor of future performance, this analysis aims to highlight some interesting historical findings.In addition, results filtered by the month when Easter Sunday occurs. There have been five instances since 2000 of Easter Sunday happening during March, which matches what will happen in 2024.The S&P500 index, the 10-year US Treasury yield, euro/dollar, WTI and Gold have been under the microscope with the findings presented in Tables 1, 2 and 3 below, using daily data since 2000.Tendency for lower euro/dollar and higher oil prices before Easter SundayAs made evident by Table 1 below, euro/dollar tends to finish the last week before Easter Sunday in the red. On the flip side, oil prices tend to increase, possibly due to the public's increased travel needs fuelling demand for oil products. More importantly, there is a clearer signal when Easter Sunday falls in March, like in 2024. Euro/dollar has dropped in each of the five instances, while gold recorded an average drop of 3.6% in four of these periods.Mixed performance in the first week after Easter SundayThe analysis did not show significant performance patterns during the first week after Easter Sunday. One could argue that there is a 66.7% probability of an S&P 500 index rally, which could be sufficient for certain traders. However, the picture becomes more interesting when focusing on Easter Sunday falling in March. The 10-year US yield tends to drop by an average of 15bps while, more importantly, euro/dollar usually rallies by 1.6%.Performance one month after Easter is promisingThere does not appear to be a strong pattern in the performance of the key assets examined during the first month after Easter Sunday. The full results, presented in Table 3 below, point a to small bias for higher S&P 500 and higher oil prices, which becomes stronger when examining the 2014-2023 period only, especially for US equities.Interestingly, the findings become slightly more promising when focusing only on Easter Sunday falling during March. In this case, there is a strong tendency of euro/dollar rallying by around 2.2% and oil prices climbing by 5% in the five instances examined.To conclude, oil prices tend to increase in the week before Easter Sunday and during the first month after Easter. Euro/dollar experiences a sell-off one week before Easter, but then it tends to rally during the first month after Easter when Easter Sunday falls in March. Finally, the S&P 500 index tends to climb after Easter, a bias which is stronger when focusing only on the past 10 Easter breaks.
Mixed performance in the first week after Easter SundayThe analysis did not show significant performance patterns during the first week after Easter Sunday. One could argue that there is a 66.7% probability of an S&P 500 index rally, which could be sufficient for certain traders. However, the picture becomes more interesting when focusing on Easter Sunday falling in March. The 10-year US yield tends to drop by an average of 15bps while, more importantly, euro/dollar usually rallies by 1.6%.
Performance one month after Easter is promisingThere does not appear to be a strong pattern in the performance of the key assets examined during the first month after Easter Sunday. The full results, presented in Table 3 below, point a to small bias for higher S&P 500 and higher oil prices, which becomes stronger when examining the 2014-2023 period only, especially for US equities.Interestingly, the findings become slightly more promising when focusing only on Easter Sunday falling during March. In this case, there is a strong tendency of euro/dollar rallying by around 2.2% and oil prices climbing by 5% in the five instances examined.
To conclude, oil prices tend to increase in the week before Easter Sunday and during the first month after Easter. Euro/dollar experiences a sell-off one week before Easter, but then it tends to rally during the first month after Easter when Easter Sunday falls in March. Finally, the S&P 500 index tends to climb after Easter, a bias which is stronger when focusing only on the past 10 Easter breaks.