Closing Report 01.10.2021

The debt ceiling crisis disrupted us markets

 

AMERICAN MARKETS THURSDAY CLOSING

Major US stocks started the week lower as investors reacted to the rise of the 10-year Treasury yields to nearly a three-year high. Also, markets have been drown by tech shares sell off. On Tuesday, markets extended their losses due to the debt ceiling crisis, where the Democrats were attempting to raise the federal debt limit while Republican wants to leave it unchanged. Wednesday session closed mixed as lawmakers prepared to vote on legislation to suspend the national debt ceiling. Meanwhile, Fed Chair Jerome Powell stated that the asset purchasing taper is « getting close. » Thursday trading day saw a red day as uncertainty on the debt ceiling continues, while, Congress did manage to pass a continuing resolution to fund the government until December 3.

EUROPEAN MARKETS MIDDAY

This Friday at midday European major stocks were down on concerns that rising inflation will prompt central banks to withdraw stimulus just as growth slows. Also, the DAX dropped over 1.5% this morning after German retail sales datat for August failed to meet market expectations. Nevertheless, Eurepoan markets began the week higher as European Central Bank President Christine Lagarde delivered a speech to the European Parliament committee noting that the recent rise in inflation is « largely temporary », adding that the bank won’t be raaising rates before 2023. Meanwhile, the Deutsche Bundesbank declared that Germany’s inflation will reach it’s higher rate between 4 and 5% by the end of the year. Tuesday was a red day following the United States sell-off prompted by rising US bond yields while Christine Lagarde stated that COVID-19 crisis could impact inflationary trends in the « year to come ». Wednesday session closed higher after  the consumer confidence in September improved by 1.3 points in the euro area (EA19) compared to August while the Economic Sentiment Indicator (ESI) remained broadly stable in the euro area. Thursday session has been driven by the statement of the British Chief Secretary to the Treasury saying that it is impossible to predicted how many people in the UK will lose their jobs after the government’s job retention scheme ends.

ASIAN PACIFIC MARKETS CLOSING

Asia-Pacific region markets closed lower this Friday, with the NIKKEI 225 falling 2.31% after the latest data showed that Japan’s manufacturing sector growth decelerate in September. Also, North Korea tested another missile which brings uncertainty into the region. Monday traded mixed in Asia as investors braced for the fallout of the potential collapse of China Evergrande Group after reports indicated that Chinese officials started to take control of some of the company’s sales revenue in order to keep projects afloat. Tuesday traded mixed as Japan declared that it didn’t expect a surge in demand following the lifting of the pandemic measures, the NIKKEI 225 lost 0.29% that day while both Shangai Composite and Hang Seng traded higher. Thursday was the only day of the week where the region traded with gains even if Japa’s retail sales and industrial activit, as well as China’s manufacturing activity came in below market expectations.

COMMODITIES & FOREX MARKETS

• The Joint Technical Committee (JTC) of OPEC members and non-OPEC oil producers believe that demand for oil products for heating and power generation could increase as a result of the ongoing gas crisis in Europe, Energy Intelligence’s chief OPEC correspondent Amena Bakr reported on Wednesday.
• Natural gas futures soared 60% over the last month and climbed over 240% since the start of the year amid supply issues.

New deaths attributed to Covid-19 in European Union, US, Brazil, UK, Malaysia and Sri Lanka (Financial Times)