Market Commentary – August 20, 2021

Kevin Jock

20th August 2021

Benchmarks across Asia dropped sharply after Beijing approved stricter data privacy laws, specifically targeting technology platforms. Though short on details, the law requires firms to establish “robust personal information protection compliance systems” whilst restricting companies from excessively collecting personal information. State-owned media agency People’s Daily further reported authorities are likely to broaden their regulatory crack into other areas. Citing online prescription drugs an area of concern. In Asia as news disseminated across markets, Hang Seng led the declines down 2.8%, Nikkei lost 1.5% and S&P200 outperforming losing only 0.6%. The whole onslaught was first initiated by a probe into ride-hailing group Didi Chuxing following their 4bn IPO in New York in June.

Thursday saw Wall Street whip up a reversal day after recovering losses from early U.S. session. Market jitters surrounding the delta variant and Fed tapering was prevalent. A newly published study found the efficacy rate from the BioNtech/Pfizer shot declined more rapidly than compared to Oxford/AstraZeneca. Meanwhile, rising anxiety over the Fed’s $120bn asset purchase program which has since been a key pillar in support global rallies. Elsewhere, European indices retreated for four consecutive days as economic implications from delta grow.

Continuing risk-off sentiment fuels the U.S. dollar’s appreciation against majors, as many broke below recent support levels. Crude oil falls for 6 days running to $63.90, gold depreciated to $1,779.80 and bitcoin finds equilibrium around $47,000.


Figure 1 (Source: IS Prime) EURCHF Daily : Following on from yesterday’s Swiss story, the EURCHF has see violent bounces on the 1.07 level seemingly driven by SNB intervention.

Headliner to Review

  • The newly released unemployment rate in Australia continue to drop, from the previous figure of 4.9% to 4.6%, reaching the lowest value since Dec 2008. The main reason why it fell is that many people gave up looking for work during the lockdowns, hence, they are not considered to be unemployed unless they start to actively searching for work.

Headliner to Watch

  • The newest German PMI figure is due to release in next week, with the previous month reached 65.9, triggering a potential inflation bottlenecks caused by strong demand.
  • The newest French PMI figure is also due to release in next week since the figures from the previous month is 58. However, the July figure has weakened more than expected and therefore, much lower figure in August might impact market sentiment.

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Antony Tan
Kerry Man