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Below is the daily global market update 07 October 2021 By Team Kristal.AI

“Debt Ceiling pushed out

It was shaping up to be another risk off session with Equities lower and Vol higher across Asia and Europe, but SPX managed to rebound from the selloff after it was announced the debt ceiling limit would be raised until Dec (possibly to USD 29 tn). The Republican Senate leader Mitch McConnell offered this as a compromise and the Dems are reportedly going to accept. This helped SPX close in the green on the day but price action was still defensive with Utilities gaining the most on the day (+1.5%), The US dollar was bid and US yields were volatile but mostly unchanged from yesterday.

The recent runup in energy prices has now made it a political issue with the US announcing it could release some of its strategic reserves (670 mn barrel stockpile) to help ease price pressures. Such action hasn't been undertaken since Obama's first term but China is already using its strategic reserves in an attempt to dampen price rises. Allegations of Natural Gas price fixing have been levied against Gazprom and prompted Putin to publicly state that output there could increase as well. The Energy sector sold off on the day(-1%) following declines in Crude (-1.9%) and Natural Gas (-10%), taking the broad commodities space lower too.

Crypto continued its hot streak with Bitcoin trading at the 55k level now and making buy on dips an effective strategy in this space as well. HY spread continued to widen with no news yet on a resolution of the Evergrande saga. China will be open again tomorrow and could see a selloff following Fantasia's default, unless further measures are unveiled prior to that.  Ahead today, we have the weekly unemployment data in the US, where a miss could bring the taper timeline back into the headlines.”

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