Market Commentary - October 8, 2021

Wall Street moved higher on Thursday after the US Senate reached a deal to extend the debt ceiling, avoiding a US government default for now. The proposed agreement would increase the debt limit by $480bn, enough to fund the government through to early December. The S&P 500 index closed 0.83% higher, while the Nasdaq gained 1.05%, with both benchmarks now firmly in positive territory for October.

European indices marked their best showing since July, as easing oil and gas prices offered relief to investors worried about inflation alongside positive earnings releases adding to the upbeat sentiment. The STOXX 50 rose 1.6% to reverse weekly losses, with buying seen across all sectors spurred the FTSE 100 and DAX to ascend 1.17% and 1.85% respectively.

Elsewhere in Asia, China shares rose on Friday after a week-long national holiday, helped by encouraging service sector data and easing political tensions with the US. The CSI 300 index rose 1.1% to 4,918.45 points at the end of the morning session whilst the Hang Seng index dropped 0.3% to 24,636.46 points.

On the other hand, the US dollar index was little changed at 94.202 after trading in a tight range on Thursday, while the exchange rate of USDJPY edged up slightly to 111.62, drifting toward the upper end of the trading range of the past week and a half. Gold was down in today’s morning in Asia but held steady as investors refrained from asking big bets ahead of the latest US jobs report.

image_2021_10_08T06_50_57_613Z

Figure 1 (Source: IS Prime) USDJPY Daily: Yen looking to build onto Thursday’s solid recovery, as investors remain cheerful heading into the NFP release.

Headliner to Review
  • The US unemployment claims was 326K, a decrease of 38K from the previous week’s revised level.
  • The monetary policy account from the ECB’s September monetary policy meeting showed that upside inflation risks were increasingly discussed. It was argued that if supply bottlenecks lasted longer and fed through into higher than anticipated wage rises, price pressures could be more persistent.

Headliner to Watch

  • The monthly Italian Industrial Production figure is due to release in next Monday, with the previous month of having a slight increase of 0.8%.

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Authors:
Antony Tan
Kerry Man