US Session (11/12/2021)
As inflationary pressures continued to resonate across markets, equities in the US rose, led by technology and communication services.
After a drop on Wednesday due to higher-than-expected consumer prices, the S&P 500 gained 0.7% in its second day of gains. After announcing that it will split into two companies, Johnson & Johnson gained. After revealing production delays, and Lordstown Motors' stock dropped. The value of treasuries has dropped.
While global stocks have experienced their first weekly loss since early October, their losses pale in comparison to the bond market's gyrations. Following a strong corporate results season, stocks have remained near all-time highs. Bond traders, on the other hand, are concerned that rising inflation would lead to tighter monetary policy. Consumer confidence in the US has slipped to a 10-year low.
After a US trade holiday on Thursday, Treasury rates climbed on Friday, with the 30-year bond gaining 4 basis points. Meanwhile, a measure of the yield curve in the United States has flattened to its lowest level since March 2020.
Stocks in Europe rose, led by luxury consumer companies, while shares in Asia rose, aided by a rally in Japan.
The dollar declined as a result of the US' warning that Russia may be contemplating an invasion of Ukraine.
Oil and Bitcoin slipped. Gold erased previous losses.
Asia Session (11/14/2021)
Asian stocks were mixed as traders weighed better-than-expected Chinese economic data. Treasury yields remained stable, providing some relief from the volatility caused by inflation and monetary policy concerns.
Shares in Hong Kong and China fluctuated, as the central bank supported growth by rolling over all policy loans due this month.
Japanese equities rose as stimulus plans helped to soften the blow of the previous quarter's economic contraction.
US futures rose after technology stocks boosted the S&P 500 on Friday.
Despite widespread covid-19 outbreaks, retail sales in China exceeded expectations. Another report showed that home prices fell for the second month in a row drained real-estate stocks.
Treasuries were steady after a period of sharp swings due to uncertainty about the pandemic recovery, whether inflation will be sticky, and the likely rate of interest-rate hikes. Bond market inflation expectations for the next decade are at their highest since 2006.
The dollar slipped.
Europe Session (11/12/2021)
European markets held their ground with US futures, as Asian stocks rallied at the close of a chaotic week.
Luxury stocks rose in Europe as Richemont, the owner of Cartier, topped earnings expectations, offsetting a decline in tourism companies. Contracts on US gauges were majoritively unchanged. Asian stocks rose, aided by a surge in Japan; according to a report, the country's fiscal stimulus will total 40 trillion yen ($350 billion).
After a trading holiday on Thursday, Treasuries resumed their selloff as the market continues to be weighed down by this week's surprise US inflation statistics. Concerns that pricing pressure would compel the Federal Reserve to hike rates sooner than expected contributed to losses in five-year notes. The yield curve has flattened for the first time since March 2020.
The dollar rose despite caution sparked by a US warning that Russia may be considering an invasion of Ukraine. Oil, gold, and bitcoin all fell in value, Treasuries slipped.
According to a poll, BoE to lift bank rate to 0.25% on December 16th vs first hike seen in Q1 2022 in October poll.
Kremlin: We act to protect Russia's security if there are actions by our opponents - NATO and the US - along our borders.
In response to Lukashenko's gas threat, the Kremlin quotes Putin's assertion that Russia has always maintained its contractual obligations.
Japan is planning an economic stimulus package worth more than 40 trillion yen, according to the Nikkei.
EU Commission Forecast: Eurozone inflation at 2.4% in 2021, 2.2% 2022, 1.4% 2023.
Money Markets expecting 2 full, 10 BPS ECB rate hikes by December 2022 - ECB Watch
ECB's Rehn: Relief for supply bottleneck may not happen until the end of 2022.
Monday FX Options Expiries
EUR/USD: 1.1580 (EU570.1M), 1.1375 (EU552.5M), 1.1835 (EU501.9M)
USD/CNY: 6.3800 ($426.5M)
USD/JPY: 114.75 ($570M), 111.75 ($460M), 113.95 ($439M)
USD/CAD: 1.3150 ($310M)
AUD/USD: 0.7120 (AUD309M)