Below is the daily global market update 13 October 2021 By Team Kristal.AI
"Sideways into earnings
A fairly calm session overnight with SPX closing lower by 0.25% - Energy was flat with Crude trading sideways and Real Estate was the front runner for a second session in a row with gains of 1.3%. About 50% of the index constituents closed in the green as we await results from JPM tonight to officially kick off the quarterly earnings season. Expectations are high once again with Net Interest Income likely to play a bigger role for financial institutions as rates have started rising ahead of the Fed taper this year. Fed speakers overnight maintained the same timeline, despite the NFP miss on Friday, and are likely stirring up the debate on transitory vs persistent inflation once again.
The US dollar continued to show strength and the yield curve flattened as US Treasuries came back from the long weekend. The 2Y yield (at 34 bps) is at its highest post pandemic level and the 10Y fell back below the 1.6% level to around 1.58% now. Commodities took a breather from their recent rally, though Natural Gas did rebound from the recent pullback, gaining 3% on the day. Crypto was down on the day but Bitcoin remains supported at 56k level and Ethereum at the 3.5k level.
Outside the US, price action was equally tentative. China and HK fell on the day as Evergrande continued to miss coupon payments on its offshore USD debt - the tally is up to about USD 143 mn across 5 payments now. There is still a couple of weeks or so of grace period remaining before a default is declared. In the meantime, we continue to wait for more details on their 'significant transaction' with Hopson as overall pressure buildings in Asian HY with refinancing getting tougher. HK will likely stayed closed this morning on typhoon alert and we have the US CPI out later in the day along with JPM Earnings.”
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