Market Commentary - September 9, 2021
Global stocks fell on Wednesday as investors anticipated the unwinding of ECB’s stimulus measures that have prop up markets throughout the pandemic. The S&P 500 index dropped 0.1%, while Nasdaq fell 0.6%. Declines were broad-based, with cyclical sectors such as financials and energy falling alongside technology stocks.
The cautious mood in the US followed declines across Europe as well, with the Europe-wide STOXX 600 index closed down 1.1% for its largest fall in three weeks. DAX suffered its worst day since mid-July, dropping nearly 1.5% ahead of today’s meeting at ECB. FTSE 100 and the CAC 40 ended the session lower by 0.75% and 0.85% respectively.
In term of today’s Asian markets, it declined in general with the HK Hang Seng index, South Korea’s Kospi 200 and Japan’s Topix dropped 2%, 1.8% and 0.7% respectively. In China, markets soured after Fitch mentioned that the Chinese home builder Evergrande, the world’s most indebted property developer, could default on its financial obligations.
Elsewhere, Brent crude rose 1.3% as the oil benchmark pushed higher by US producers struggling to get back to business after Hurricane Ida swept through Guld of Mexico. Gold prices held near two-week lows on today, pressured by a stronger US dollar, which in turn leads to the decline of EURUSD as it approaches the monthly low of around 1.1794. Bitcoin price fluctuated around $46,000 after El Salvador’s incident, as president Bukele steps in to fix the rollout snags through a stream of Twitter messages, providing guidelines to the users.
Figure 1 (Source: IS Prime) XAUUSD Daily :Gold price seems encountered fierce resistance level at the price of $1835, as it unable to break through this level after many attempts.
- The Bank of Canada (BOC) kept its key interest rate target on hold on Wednesday, at the effective lower bound of 0.25%. It is also maintaining its extraordinary forward guidance on the path for the overnight rate, reinforced and supplemented by the bank’s QE program, which is being maintained at a target pace of $2 billion per week.
Headliner to Watch
- The Canadian employment change figure is due to release on Friday, with the forecasted figure of 67.2K, much lower than last month’s actual figure of 94K.
- The US month-to-month PPI figures is expected to increase by 0.6%, as such prices likely to accelerate further in August, but the rate of increase may slow after oil prices trending lower in both July and most of August.
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Topics: Market Commentary