Market Commentary – October 28, 2021

Kevin Jock

28th October 2021

Retreating from recent highs, oil prices drove energy stocks lower, slipping Wall Street from record highs on Wednesday as strong earnings report from tech giants failed to offset weakness in the rest of the market. The S%P500 dropped 0.51% whilst Nasdaq ended relatively flat.

Across the Atlantic, European indices followed suit with miners leading losses over concern of China’s deteriorating metal prices. The STOXX 50 closed unchanged, though the FTSE 100 was down 0.33% after chancellor Rishi Sunak deliver UK’s budget, remarking inflation was expected to average 4% next year.

Asia opened weaker as Australian shares dipped in early trade on Thursday, following overnight sentiment. Mainly hurt by energy & mining stocks on weak commodity prices, with ASX 200 index slid as much as 0.4% before regaining some losses to trade 0.1% closer to midday. Japanese stocks fell too, dented by disappointing outlook from tech blue-chip companies which prompted a broader sell-off, with the Nikkei 225 losing 0.94% after mid-day close.

US oil fell sharply after a government report showing a bigger than expected crude oil inventory build, to settled at $82.4. Gold was up on Thursday morning in Asia, boosted by a fall in US bond yields, trading at around $1,800. Bitcoin has dipped below $60,000 as trader bets place more emphasis on Shiba Inu’s meteoric rise, up 100% over the last 7 days.

image_2021_10_28T05_35_48_959Z

Figure 1 (Source: IS Prime) USDJPY Daily : The Japanese yen fluctuate near intermediate lows as the BOJ leaves monetary policy unchanged.

Headliner to Review

  • Bank of Canada (BoC) announced its rate statement in which they have decided to end the bond buying program to $0bn per week vs. $1bn per week expected, which is a surprising decision. Interest rate left at 0.25% as expected.
  • US crude oil inventories increased by 4.3 million barrels from previous week, much higher than the market forecast of 2 million barrels.

Headliner to Watch

  • Canada’s monthly GDP figure is expected to release on Friday, with the market consensus of an expansion by 0.7%, much higher than the previous month’s figure of a contraction of 0.1%.
  • Both Germany and Italy are also due to release its quarterly preliminary GDP figures, expected to expand by 2.2% and 2% respectively.

Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary, and does not constitute investment advice.

Authors:
Antony Tan
Kerry Man