US Session (11/19/2021)

Stocks declined as a result of aggressive comments from Federal Reserve officials and growing anxiety that a new wave of the pandemic in Europe could prompt more lockdowns.

Companies that are economically sensitive, such as oil, banking, and industrial stocks, have fallen, while the technology-heavy Nasdaq 100 has outperformed major benchmarks.

The treasury curve flattened after two members of the Federal Reserve's board of directors suggested that, in light of strong economic growth and increasing inflation, the Fed may need to consider speeding up the reduction of its bond-buying program. The dollar increased.

While stock prices are approaching all-time highs, bolstered by strong earnings, a viral comeback may halt the economic recovery at a time when inflation is at an all-time high.

Austria was the first country in Western Europe to adopt sweeping restrictions. Non-essential businesses were also closed in areas of Germany, and the Netherlands had previously ordered shops and bars to close early.

Biden's centerpiece plan to extend the social safety net, confront climate change, and reform tax policies passed the House of Representatives on Friday morning, with House Rep. Speaker Pelosi uniting divided Democrats to send the bill to the Senate, where its fate remains uncertain.

Inflation spike provides investor headache but Federal Reserve reaction  crucial

Asia Session (11/21/2021)

Monday's stock market performance was mixed, owing to concerns about European COVID limitations and the possibility of faster removal of Federal Reserve stimulus. The treasury yield curve was nearing its flattest since the outbreak of the pandemic.

Shares fell in Japan, varied in Hong Kong, and surged in China, where the central bank hinted at policy easing to help a weakening economy. Futures in the United States rose after sectors sensitive to the economy led the S&P 500 lower on Friday, while the technology-heavy NASDAQ 100 excelled in an echo of the stay-at-home trade.

Treasuries pared a rise, and the yield spread between 5-Year and 30-Year maturities was around its lowest since March 2020. Bonds were boosted on risk aversion on Friday, as rising European infections pushed Austria into a lockdown and prompted Germany to strengthen controls. The curve flattened in part due to signals that the Fed may consider reducing its bond-buying program more quickly.

The dollar index remained stable. Oil prices continued to fall on the threat of important consumers stockpiling emergency supplies, as well as Europe's COVID flareup. According to a source, Japan and the United States may make a joint declaration on the release of oil reserves as soon as this week.

In China, yuan strength was also in the spotlight as a currency panel urged banks to restrict speculative foreign-exchange trading. According to a central bank consultant, the Chinese economy may enter a period of "quasi-stagflation."


Europe Session (11/19/2021)

Investors considered the impact of economic lockdowns amid a severe fourth wave of the pandemic in Europe as European markets slumped alongside US equity futures. The euro continued to fall, while bonds climbed.

The STOXX Europe 600 index fell after Germany's health minister suggested a lockdown was not out of the question as illnesses continue to rise in the region's largest economy. This comes after Austria announced a countrywide lockdown beginning Monday. The underlying indicator helped boost Wall Street to another new high on Thursday, therefore NASDAQ 100 contracts were up. Contracts on the S&P 500 fell.

Hang Seng China Enterprises Index will no longer include Evergrande.

Kremlin: Russia must respond to NATO expansion in Ukraine.

Japan's Government: Given the economic danger posed by growing energy costs, we will push oil-producing nations to raise output and collaborate closely with the IEA.

ECB's President Lagarde: The grounds for raising rates are unlikely to be met next year.

ECB's President Lagarde: Inflation will rise further till year-end.

Japan's PM Kishida: Expect a 5.6% increase in GDP as a result of economic stimulus.


Monday FX Options Expiries

EUR/USD: 1.1450 (EU1.49B), 1.1580 (EU1.27B), 1.1350 (EU849.3M)
USD/JPY: 115.25 ($355M)
USD/CAD: 1.2685 ($1.05B), 1.2360 ($810.4M), 1.2485 ($752.4M)
AUD/USD: 0.7270 (AUD345.5M), 0.7415 (AUD337.2M), 0.7555 (AUD330.9M)
USD/CNY: 6.6000 ($400M)
GBP/USD: 1.3370 (GBP646.2M), 1.3395 (GBP425.5M), 1.3300 (GBP371.5M)
NZD/USD: 0.7105 (NZD549.9M), 0.6955 (NZD365.2M), 0.7295 (NZD342.7M)
USD/KRW: 1171.00 ($460M)
EUR/GBP: 0.8360 (EU507M)