Market Commentary – September 22, 2021

Kevin Jock

23rd September 2021

Global stock markets on Tuesday clawed back losses from the heaviest sell-off in months as investors bet that policymakers would step in to prevent the fallout if Evergrande defaulted. On Wall Street, the Nasdaq added 0.2% for the day, having declined 2.2% the day before. In terms of S&P 500, the index dropped 0.1% at the close, having gained as much as 0.8% in morning trading in New York session.

In Europe, STOXX500 closed up 1% following the steepest dive in nine weeks. Travel & leisure, media, mining and energy stock led gains, while Dax rebounded from its lowest level since late July and the FTSE 100 ended the session 1.12% higher.

The Chinese market fell on their first day of trading this week after a public holiday as concerns built in global markets over the Evergrande incident. But the loses were not as heavy as feared, since the Shanghai Composite Index retraced majority of its losses before the morning close. The HK stock market is closed for a public holiday.

Ahead of FOMC, the U.S. dollar index remained docile. Gold closed back above 1,774 and bitcoin back to the 42,000 level. Meanwhile crude oil settles just below $71, digesting offsetting prospects of demand recovery and supply increases from OPEC.


Figure 1 (Source: IS Prime) CC.BTC.USD Daily : Price of Bitcoin dropped tumbled to nearly $40,000 as concerns over the spill over risk from Evergrande in this week.

Headliner to Review

  • The Reserve Bank of Australia (RBA) released its meeting minutes, reiterating the fact that the conditions for a rate rise will not be met until 2024. The members of the committee also recognised that the outbreak of the delta variant was delaying the recovery and had added to uncertainty about the future.
  • The US current account figure was announced as well, in which the deficit has widened by $0.9B to $190.3B in the second quarter of 2021, mainly reflecting reduced surpluses on services.

Headliner to Watch

  • The Fed will host its meeting tomorrow to announce their monthly monetary decision, with participants expecting a reduction in its $120B in monthly asset purchase in November and further tapering in December.
  • The SNB (Swiss National Bank) looks set to leave all its policy measures untouched at the forthcoming meeting tomorrow. Expectations see the SNB statement to reiterate a continual policy mix made of negative interest rates and FX interventions if needed.
  • The BoE (Bank of England) will release its monetary policy summary on Thursday, with the markets pricing a rate hike in around six months’ time.

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Antony Tan
Kerry Man