Market Commentary – October 21, 2022

Kevin Jock

21st October 2022

Wall Street stocks closed lower on Thursday as the comments from the Fed official reinforced expectations of an aggressive rate hike in the coming months. Both the S&P 500 and the Nasdaq indices dropped 0.8% and 0.61% respectively. Share price of Tesla declined over 6.5% after the electric carmaker missed revenue estimates.

Across Europe, shares of the regional markets actually went up yesterday, after the UK prime minister Liz Truss quitted her position, drawing to a close 45 days in office. The FTSE 100, CAC 40 and the DAX all rose 0.27%, 0.76% and 0.2% respectively.

In Asia Pacific, Australian indices fell on Friday, dragged down by real estate and financial stocks, with the ASX 200 down by 0.5%. Meanwhile, HK stocks experienced their worst performance as it has dropped to the lowest level since the end of the global financial crisis, with President Xi Jinping expecting to secure a third term. The Hang Seng index currently trading at 16,230 points.

Oil price dropped slightly on Friday after a warning on economic growth from the Fed but looking to end the week in positive territory. Likewise, gold price also declined due to a spike of U.S. Treasury yields, currently at $1,626.5 per ounce. On the other hand, the Japanese Yen broke past 150 against the greenback for the first time in more than three decades.

USDCNH chart (2022.10.21)

Figure 1 (Source: IS Prime) USDCNH daily: The offshore yuan hit a record low on Thursday after the Chinese central back leaves key lending rate unchanged, to 7.27883 against the dollar.

Headliner to Review

  • The Australian employment change figure came out to be much less than the forecasted figure, to add only 0.9K people compared to 25K expected.
  • The October Philly Fed manufacturing index edged up 1.2 points but remained negative at -8.7, the fourth negative reading in the past five months.

Headliner to Watch

  • Both the manufacturing and services PMI figures are expected to release across various nations, including France, Germany, Eurozone, UK and U.S, on Monday.

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Authors:
Kerry Man