Market Commentary – September 1, 2021

Kevin Jock

1st September 2021

Wall Street hovered around record levels as weaker PMI and consumer confidence data came to light suppressing recent euphoria. Both the S&P500 and Nasdaq was roughly unchanged whilst Dow Jones gapped 0.2% lower and fluctuated around that level.

Despite gapping higher on open, European benchmarks fell throughout the session on transatlantic travel curbs and hawkish ECB members. Fresh restrictions targeting non-vaccinated Americans on nonessential travel had been re-implemented by the EU after a spike in COVID-19 cases. Meanwhile, Austria’s central bank chief Robert Holzman commented to “think about how to reduce” the blocs 1.85tn quantitative easing programme. His remarks coincided with flash CPI estimates, revealing better than expected figures at 3% YoY whilst 2.7% was expected.

In Asia, indices shed off overnight weakness to rally on open. The Nikkei outperformed, surging 1.5% followed by the Hang Seng up 1% The S&P200 recovered from early session losses after quarterly GDP data out of Australia grew 0.7% whilst 0.5% was expected.

Ahead of OPEC meetings with output rises expected on the horizon, crude oil slipped lower to $68.65. The U.S. dollar gained largely across the board, gold at $1,813 and bitcoin still fluctuating around the $47,000 level.

USDTRY-Sep-01-2021-08-40-33-06-AM

Figure 1 (Source: IS Prime) USDTRY Daily : Turkish lira heads towards a major support level as the nation is expected to rebound sharply from the pandemic via 2nd quarter GDP figures.

Headliner to Review

  • The Chinese monthly manufacturing PMI was 50.1 in August from 50.4 in July. It continued to expand but at a slower pace as coronavirus-related restrictions and high raw material prices pressured manufacturers.
  • The Canadian economy recorded a strong recovery in June as the country accelerated its reopening process. According to the newly released GDP data, the economy rose by 0.7% in June after falling by 0.5% in the previous month.

Headliner to Watch

  • We expect the Spanish unemployment condition continue to ease, with the forecast figure of 164.7K, a large decline when compared to the previous month’s figure of 197.8K.
  • The US weekly unemployment claims number is expected to be 342K, continue to decrease as manufacturing employment in the mid-Atlantic region rose to a record high in this month and factories increased hours for workers. However, surging COVID-19 infections still pose a risk to the labour market recovery.

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Authors:
Antony Tan
Kerry Man