Market Commentary – September 2, 2021

Kevin Jock

2nd September 2021

Wall Street started September relatively unchanged ahead of non-farm payrolls as Delta, tapering and continuing regulator crackdown overshadow overall sentiment. The mood was further dampened by the less focused upon ADP non-farm employment change, illustrating weaker than expected figures. Elsewhere, European indices mirrored America’s cautiousness, steadying near record highs. Among the lot, the CAC40 was the only notable outperformer, rallying 1.2%.

Asia swung between bullish and bearish territory as headlines out of China collide. On one hand, regulators summoned 11 ride-hailing companies, from Didi to Meitun, requesting a detailed plan of how they’ll improve treatment of workers and customers by years end. On the other spectrum, Chinese Premier held a State Council meeting pledging support for business to alleviate concerns arising from COVID-19’s resurgence, mass flooding and inflation. Meanwhile, the PBOC announced it would inject liquidity amounting to 300bn Rmb in low-cost funding for banks.

Despite OPEC going ahead with planned production boost, crude remained above $68 as U.S. inventories showed a further contraction in stockpiles. The U.S. dollar retreated across majors, gold settled at 1,813 and bitcoin back to $50,000 level.


Figure 1 (Source: IS Prime) USDCNH Daily : Surprise liquidity injection from the PBOC has the USDCNH testing previous major support level at 6.45.

Headliner to Review

  • The OPEC meeting has concluded that the oil output should further increase 400,000 barrels per day throughout Aug to Dec, as all the ministers have reached such common consensuses in the video conference which lasted less than 30 minutes.
  • The Australian economic growth better than expected as nation’s last quarter GDP grew by 0.7%, better than the economists’ consensus of 0.5%. However, the road to recovery seems to be bumpy as there are still persistent cases within the community, in which the lockdown still hurts.

Headliner to Watch

  • On Friday we will see the release of the US non-farm employment change as well as the unemployment rate, as the economists expect 750K jobs will be created in August and the unemployment rate fell to 5.2%.
  • The US ISM Services PMI is also due to release with market expectations of 61.6, down from 64.1 in the previous month.

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Antony Tan
Kerry Man