IGI Logo

Below is the daily global market update 14 October 2021 By Team Kristal.AI

“Sentiment stays positive

The two major events overnight were US CPI and JP Morgan kicking off earnings season. On the former, the headline number came in marginally higher than expected (5.4% vs 5.3% exp and 5.3% prior) with the MoM reading at 0.4% vs 0.3% exp. The price increases appear to be broad based and not limited to certain sectors, leading for more financials executives including Jamie Dimon and Larry Fink to come out against the transitory narrative. The FOMC minutes showed the Fed likely to start tapering a month from now and end around mid 2022, also driven by rising inflation expectations. SPX was up marginally at 0.3% with Utilities (oddly) leading the way, and 57% of the index constituents in the green.

On JPM, the M&A division could not have asked for better numbers, with fees coming in nearly 3x of that expected. This helped boost another record quarter with the revenue from the trading side coming in higher than expectations as well. While much was made of slower than expected retail loan growth, JPM has also released another 2 bn from reserves which were set aside for pandemic induced defaults that have yet to materialize. The bumper advisory numbers bode well for Morgan Stanley (reporting today) and Goldman Sachs (tomorrow) as both have a strong franchise there. We also have BofA and Citi reporting today, where expectations remain high.

Singapore this morning joined other hawkish central banks with the MAS 'slightly' increasing the slope of the currency band appreciation, which translates into tighter monetary policy, as it expects inflation to stay elevated through 2022. Consensus expectation here was for no change, after the slope was made flat early last year. No change to the midpoint of the width of the band for now.

Commodities continued to do well overnight as yields fell and yield curves flattened across the world. Metals led the way with Gold & Silver seeing notable moves higher, but the agricultural sector sold off. Crypto was bid too and the US dollar was weaker with FX vol coming off. Even China and Asian HY debt was up marginally on the day but no news yet for  Evergrande's offshore creditors though. Ahead today, we have weekly US Crude inventories and jobless numbers.”

Above views are of the author and not of the website kindly read disclaimer