The daily global market update 11 October 2021 By Kristal.AI
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Below is the daily global market update 11 October 2021 By Team Kristal.AI
“NFP miss unlikely to affect Taper
The US economy added 194k jobs in Sep, this was lower than the 500k expected and also the 235k from the prior month (now revised higher to 366k though). The release took on added significance because the Fed is set to start tapering its USD 120 bn a month in asset purchases this year, possibly as soon as next month, and a big miss here might derail that. Markets appeared to take the release in stride through. While the US dollar slipped marginally and SPX trended lower on the day, US yields maintained their trajectory higher, with the 10Y now above 1.6%. The unemployment rate came in at 4.8% (vs 5.1% exp) though this might be more indicative of lesser people in the labor force overall.
The past week has been broadly positive for Equities with Japan and Korea being the notable exceptions. China came back from its week off on Friday and managed to avoid any Evergrande linked selloff - though details are still awaited here on the 'significant transaction' where Hopson is expected to take a 51% stake in the distressed company. The Energy rally continued with WTI topping the 80 level now and the front month spreads picking up as well. After Gazprom's statement around increased supply, Natural gas has cooled off a little but Commodities overall saw gains last week.
Ahead this week, we have JPM kicking off the earnings season on Wednesday - while not much is expected from the trading side, the frenetic pace of debt issuance and deal making is expected to translate into higher profits on the banking side. Central Banks' hawkish tilt continued with statements out of the BoE provoking concerns around inflation and subsequent rate hikes. We also have FOMC minutes and US CPI out this week, where expectations are being scaled back by some observers. We also await more details from the US Congress around the infra and budget bills alongside the lifting of the debt ceiling.”
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