Market Commentary – August 23, 2021

Kevin Jock

23rd August 2021

Wall Street rebounded late in the session to end Friday in positive territory, though nevertheless recorded their worst week since June. Among the supporters to start tapering sooner, Dallas Federal Reserve President Robert Kaplan had remarked he would be opened to reconsidering his view should the Delta variant cause material slowdown in economic growth.

The risk-on sentiment had followed through in Monday’s Asia session with futures and indices rallying as investors took advantage of recent discounts but was also spurred on by Treasury Secretary Janet Yellen’s endorsement of Jerome Powell for a 2nd term as Fed Chair on Sunday. The Hang Seng gained 1.2% and Nikkei up 1%. Australia’s S&P200 lagged, higher by only 0.1 as COVID-19 cases hit a daily record of 891 and Prime Minister Scott Morrison addressing a highly likelihood of never returning to zero cases again.

In Europe, DAX30, CAC40 and STOXX50 gained 0.3% alongside the FTSE100 up by 0.4% recouping some losses as the week marked their worst in 6 months.

Early Asia session saw a bit of reprieve for crude after declining for 7 consecutive days on constant dire economic growth re-evaluations after the Delta variant ravaged through nations inducing tightened restrictions. Oil had since rebounded from Fridays close at $62 to $63.40. Following through last weeks.

Bitcoin return to $50,000, a key psychological level during Asia trading on Monday, last seen since mid-May where a crypto rout saw the embattled digital currency lose more than half its value to below $30,000. Global regulatory tax overhaul, China’s cryptocurrency crackdown and environmental critic called into question the alternative dollar’s justification.

The U.S. dollar positioned lower among majors ahead of Jackson Hole symposium on Thursday as investor hope to gleam clues on the direction of future monetary policy. Gold continues to fluctuate between 1,775 – 1,790.


Figure 1 (Source: Refinitiv Eikon) Bitcoin Daily : Bitcoin surpasses $50,000  after rallying back from below $30,000 last month as focus shifts away from the embattled cryptocurrency.

Headliner to Review

  • The UK retail sales figure unexpectedly fell by 2.5%, much lower than the forecasted value of a slight rise of 0.2%. It was suggested that some consumers skipped shopping to follow England’s run in the Euro 2020 football tournament or stayed at home due to rising COVID-19 cases.

Headliner to Watch

  • The Bank of Japan (BoJ) will release its core CPI figure and that is estimated to rise by 0.1%, which narrowed their annual pace of falls and it is a sign where global commodities inflation was offsetting some of the deflationary pressure from a pandemic-induced spending slump.
  • US new home sales figure is due to release and expected to reach 698K, whereas prior figure dropped due to shortage of building materials.

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Antony Tan
Kerry Man