The daily global market update 19 October 2021 By Kristal.AI
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Below is the daily global market update 19 October 2021 By Team Kristal.AI
Price Action Flipped
Yesterday was a bit of an anomaly with price action diverging a little from recent trends. Fixed Income overshadowed equity as yields were mostly higher and curves significantly flatter. In the US, the 5s30s spread tightened to 85 bps now (from over 160 in Feb) as the 5Y yield stays stubbornly elevated with the 10Y rangebound. In the UK, we saw a significant repricing of interest rate hikes with the 2Y yield rising over 20 bps with Wall Street now calling for the first hike next month and 2 more by mid 2022. The NZ yield curve also saw a big move up (and flattening) as the NZD continued to showcase its recent strength.
On the Equities side, Asia was broadly higher but China closed lower. This, despite China's HY debt index gaining 3.5% in the first session after the PBoC labelled the Evergrande fallout 'controllable'. Europe saw major indices lower on the day but the SPX did close higher by 0.3% led by Tech. The US dollar was flat and Crypto was lower on the day but stayed within striking distance of the recent highs.
And in the recently revived commodities space, Energy led the way lower with Crude falling back marginally and Natural gas coming off close to 20% over the past few sessions. Metals were lower too but gold stayed flat and Grains were marginally in the green. We're light on data today with India and Indonesia closed. We do have inflation data in the UK later on and Housing data in the US.”
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