US Session (09/07/2021)

On Thursday, shares in the US climbed, boosted by progress in debt-ceiling discussions in the US and alleviating fears over Europe's energy crisis.

The S&P 500 rose as much as 1.5% before almost halving gains on China's plans to tighten its supervision over technology firms. The minerals and consumer discretionary sectors led the way higher, extending a three-day gain to 2.3%.

The 10-Year Treasury note yield rose to 1.57%, the highest level since June.
Concerns over an energy crisis, rising inflation, decreased assistance, and weaker growth have roiled markets in the last month. Yet, the potential of a short-term increase of the US debt ceiling is alleviating concerns about political wrangling.

Natural gas prices fell after reports that Russia may expand supply to Europe.

After that, all eyes will be on Friday's nonfarm payrolls in the US, which may give insight on the Federal Reserve's schedule for reducing bond purchases. There is growing anticipation that the report would reflect the ‘decent’ employment growth that Fed's Powell has expressed his desire for. Last week, initial unemployment claims in the US declined more than expected, while ADP employment numbers for September were above forecasts.

Asia Session (09/07/2021)

Markets rose on Friday, boosted by a gain in Chinese stocks and reducing fears about the United States' debt ceiling. Treasury yields rose ahead of a critical jobs data in the United States.

After reopening for the first market in a week after a holiday, Japanese stocks outperformed, Hong Kong gained, and China was in the green. US futures edged up in the wake of the S&P 500 and NASDAQ 100 pushing higher for a third day. The Senate decided to temporarily raise the debt ceiling, ending a long-running standoff that had roiled markets.

China's reopening refocuses attention on the country's debt troubles in the property sector, as well as Beijing's broader regulatory broadsides. The government will continue to take actions to restrict monopolistic behaviour among internet platforms and promote consumer and data protection, according to central bank governor Yi Gang.

As investors worry about inflation amid a worldwide oil shortage, the 10-year Treasury yield had climbed to its highest level since mid-June. the US Payrolls report Friday might also cement prospects that the Fed will soon begin tapering bond purchases. yields climbed in Australia and New Zealand. The value of the dollar remained stable.

Europe Session (09/07/2021)

Stocks climbed alongside US equity futures today, boosted by progress in US debt-ceiling negotiations and Russia's promise to help Europe's energy crisis. Treasury yields were stable ahead of crucial employment data.

Apple and Tesla were up in premarket trade on the Nasdaq, leading advances among US indices. European stocks rose as the ECB was reported to be considering a fresh bond-buying scheme to avoid market volatility as emergency purchases are phased down. Asian equities were buoyed by a rebound in Hong Kong-listed technology companies.

Worries about the energy crisis, rising inflation, less stimulus, and weaker GDP have all roiled markets in the last month. The possibility of an agreement to extend the US debt ceiling beyond December is assuaging concerns about political squabbling, while Friday's payrolls data may provide insight on the Federal Reserve's plan to reduce asset purchases.

After Russia promised to alleviate Europe's energy problem and as US inventories rose faster than anticipated, oil prices continued to fall from a seven-year high. The yield on the 10-year Treasury note remained unchanged, as did the value of the dollar.

Also today, ECB governing council member Yannis Stournaras boosted market confidence by saying that the central bank will not raise interest rates prematurely.

Friday FX Option Expiries

EUR/USD: 1.1600 (€1.65B), 1.1650 (€1.59B), 1.1700 (€1.3B)
USD/CAD: 1.2700 ($1.77B), 1.2800 ($973M), 1.2750 ($950M)
USD/JPY: 111.00 ($2.74B), 108.50 ($1.34B), 109.00 ($1.15B)
USD/CNY: 6.5500 ($1.34B), 6.5000 ($530.7M), 6.4650 ($355M)
AUD/USD: 0.7335 (AUD2.05B), 0.7300 (AUD1.07B), 0.7200 (AUD777.8M)
USD/MXN: 20.76 ($410M), 20.48 ($400M), 20.25 ($380.1M)
EUR/GBP: 0.8480 (EU348.6M)