Market Commentary – September 23, 2021

Kevin Jock

27th September 2021

Global stocks advanced on Wednesday, as fears around Evergrande eased and the US Fed provided more details on its timetable for lifting interest rates. The S&P 500 index closed 0.95% higher after Fed chair Powell signalled the US central bank could start withdrawing its stimulus program as early as November, while the Nasdaq indices also rose 1%. New projections show a majority of Fed officials expect interest rates to rise at least three times in 2023, and a growing number expect an earlier rate rise in 2022.

European shares rose on Wednesday after Evergrande said it would make a coupon payment on its domestic bonds, offering relief to investors. STOXX 600 index rose 1%, extending Tuesday’s bounce after its worst session in two months, with commodity-linked stocks and banks leading gains, while both the FTSE 100 and CAC40 ascended by 1.47% and 1.29% respectively.
In Asia, Chinese stocks rose on Thursday morning, led by semiconductors and consumer staples, while the Hang Seng index added 0.7% to 24.388.52 at the morning closure. Property-related firms in HK led gains on catch-up trade, as the market was shut for a public holiday on Wednesday.

Oil price steadied after a two-day gain, with US crude stockpiles shrinking to the lowest level since 2018 and tightening the market as it faces a global energy crunch ahead of the crucial winter demand period, with the crude oil climbed more than 1.6% and settled above $72. On the other hand, EURUSD takes the bids to renew intraday top above 1.1700 after the currency pair dropped to the lowest since August 20 the previous day.

Figure 1 (Source: IS Prime) EURUSD Daily: Price of the currency pair bounced back after it touches the low on 20 August 2021.

Headliner to Review

  • The BoJ (Bank of Japan) kept its policy settings unchanged at their Monetary Policy Meeting in yesterday. The short-term interest rate has been held steady at -0.1% and the 10-year bond yield remained at 0%, as most economists expect BoJ to leave stimulus unchanged through 2022.
  • US crude oil inventories decreased by 3.5 million barrels from the previous week, and it has been decreasing consecutively in the past seven weeks, due to hurricane Ida-related disruptions.

Headliner to Watch

  • The monthly US Flash Manufacturing PMI is expected to reach 60.7, down from the previous month’s actual figure of 61.1.
  • German ifo Business Climate Index is forecasted to reach 99, fell from 99.4 in last month.


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Antony Tan
Kerry Man