US Session (09/04/2021)

On Monday, US stocks fell as a selloff in technology equities resumed in response to the fear of persistently rising inflation.

The S&P 500 dropped 1.3%, falling below its 100-day moving average, while the Nasdaq 100 dropped 2.2% and the Dow Jones Industrial Average dropped 0.9%.

High-growth technology businesses, such as Amazon and Facebook led the losses, while vaccine producers also suffered as a result of Merck's revelation regarding a successful COVID-19 medication. Nonetheless, energy stocks surged in tandem with oil prices.

Global markets have taken a risk-off stance as a result of a rising number of concerns, just as investors prepare for the Federal Reserve to start withdrawing stimulus as soon as next month. Higher inflation and government rates reduce the value of the premium paid for high-growth equities. For other tech companies, the danger of losing money is also larger.

Fears of a broader energy crisis compounded concerns about inflation on Monday, as European electricity and gas prices soared ahead of the winter solstice. In Germany, the electricity contract for November set a new high, while natural-gas futures continued to rise. Nevertheless, crude oil prices in New York rose to their highest level since 2014 when OPEC+ decided to increase output in November.

Biden warned on Monday that the US government was on the verge of exceeding its legal debt limit, portraying the threat as a "meteor" heading straight for the economy.

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Asia Session (09/04/2021)

On Tuesday, a global stock selloff resumed in Asia, on concerns that rising prices for raw resources such as crude oil will drive inflation and stifle economic growth.

MSCI’s Asia-pacific share index declined about 1.5%. Japan tumbled, taking the slide in the Nikkei 225 since a September peak to more than 10%. a hong kong gauge of Chinese technology stocks slid and South Korea headed for a correction.

The S&P 500 fell to its lowest level since July, while the NASDAQ 100 fell nearly 2%, dragged down by mega-cap tech corporations like Amazon and Facebook. The energy sector was one of the few sectors to advance in both the US and Asian sessions.

US 10-year Treasury yields were unchanged, while the dollar recovered from an overnight dip. Following OPEC+'s decision to maintain a moderate supply raise even as a natural-gas crisis boosts crude demand, oil has stabilized near its highest level since 2014.

Traders are nonetheless concerned about China's indebted property industry. Following industrial major China Evergrande's debt troubles, Fantasia failed to repay a $205.7 million bond that was due on Monday, adding to the strains on the nation's heavily leveraged property giants. Chinese markets will resume on Friday after a holiday break.


Europe Session (09/04/2021)

Concerns about a global supply crisis and stubbornly rising inflation put investors on edge, as US equity-index futures fell and commodities rose.

When the underlying index reported its largest weekly loss since February, futures on the S&P 500 index slid 0.4%. Iron ore and aluminum prices rose, while oil prices recovered ahead of an opec+ meeting on output objectives. After Merck's news of a successful COVID-19 medication, Moderna fell in premarket trading as traders sold vaccination stocks.

As the post-pandemic economy drags due to supply bottlenecks in everything from semiconductors to coffee, global markets have taken a risk-off stance. Concerns that rising inflation would endure longer than policymakers estimate have grown as a result of a developing energy shortage. At a time when investors are expecting the Federal Reserve to begin tapering as soon as next month, the dangers are rising.

Before the beginning of winter, Europe's energy crisis worsened, with electricity and gas costs skyrocketing. The November German electricity contract reached a new high of almost €200 per megawatt-hour. Natural-gas futures have also continued to rise.

On Monday, oil recovered some of its losses on speculation that OPEC+ members may consider raising output more than expected. Before an alliance meeting, WTI soared above $76 per barrel.

Treasury yields bear steepened, with the 10-Year rate rising three basis points and the 2-Year yield remaining unchanged. After two days of losses, the dollar remained stable.

Moderna fell 2.7% early in New York trading, while Biontech SE fell 2%. Merck announced that their trial tablet reduces the risk of COVID-19-related hospitalization and mortality by half. The revelation was viewed by some traders as a watershed moment in the worldwide fight against COVID-19. Merck increased by 3.1%.

Tesla rose 2.9% in early trade after reporting record third-quarter deliveries that exceeded expectations.

WM Morrison Supermarkets fell 3.8% in Europe after CD&R emerged as the top bidder for the British retailer, while analysts claimed the auction's offer terms were underwhelming.


Tuesday FX Option Expiries

USD/CAD: 1.2625 ($1.24B), 1.2615 ($776M), 1.2800 ($666M)
USD/JPY: 112.00 ($823M), 0.01 ($500M), 111.00 ($423.8M)
EUR/USD: 1.1600 (EU464.6M), 1.1800 (EU360.2M), 1.1700 (EU338.5M)
AUD/USD: 0.7450 (AUD727.5M)
USD/MXN: 20.00 ($460M), 19.95 ($460M)
USD/CNY: 6.4620 ($1B)
NZD/USD: 0.6850 (NZD372.3M)