Market Commentary – September 13, 2021

Kevin Jock

13th September 2021

US equities closed their worst week in nearly three months on last Friday as concerns about inflation dented optimism over continued central bank support for financial markets. The S&P 500 closed down 0.77% while Nasdaq fell 0.87%, representing weekly falls of 1.7% and 1.6% respectively, their worst performances since mid-June.

In Europe, As the ECB concluded their two-day governing council meeting, European benchmarks sought lower levels after the central bank concluded that quantitative easing will be shifted to “a moderately lower pace”, with the STOXX 600 benchmark closing down 0.3% for a weekly fall of 1.2%. ECB President Christine Lagarde confided investors, the move is in response to the “rebound phase in the recovery of the euro area economy is increasingly advanced”.

Elsewhere in Asia, Beijing’s regulatory clampdown persist dragging the Hang Seng lower by over 2% since opening as tech stocks tumbles. A recently released report by officials have announced authorities are seeking to demerge Ant Group’s Alipay. In Australia, despite a 0.6% relief rally amid Monday’s session for the S&P200 after a tumultuous week of declines, extended lockdowns in the state of NSW and Victoria are expected to see unemployment rise from 4.6% to 5% in the coming months.

Crude oil rallies back above $70 as drawdowns continue. Estimates suggest inventories have declined approximately 30 million barrels thus far following Hurricane Ida two weeks ago as half of crude output along the U.S. Gulf of Mexico remain shuttered with returning to operations being unclear.


Figure 1 (Source: IS Prime) GBPUSD Daily : British Pound has been trading in sideways channel since the beginning of 2021, with the higher to 1.425 and the lower at 1.357

Headliner to Review

  • In Canada, its local economy added 90K jobs in August and the unemployment rate fell to 7.1% for the month. Such announcements topped consensus expectations and came after even stronger gains in the prior two months. Gains were concentrated in full-time work and in the hard-hit service sector, led by gains in accommodation and food services.
  • The actual monthly US PPI figures came out to be an increase of 0.7%, slightly above the economists’ forecast of 0.6%. Such continual increase leads to concerns that as producers are struggling to replenish their stockpiles against surging demand, they can easily pass on the higher costs to consumers. 

Headliner to Watch

  • The US will release its monthly CPI data, forecasted to increase by 0.4% which is slightly lower compare to the previous figure of 0.5%.
  • The Chinese monthly retail sales are expected to increase by 6.9%, down from the previous figure of 8.5% and such figures have been declined consecutively in the past 4 months.

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Antony Tan
Kerry Man