US Session (10/13/2021)
Technology stocks rose amid lower treasury yields on news that inflation is on the rise, boosting firms that are better positioned to pass on rising costs to customers without damaging their operations.
Traders also assessed minutes of the federal reserve’s latest policy meeting, with officials broadly agreeing they should start reducing stimulus in mid-November or mid-December amid increasing concern over inflation.
Traders also looked at the minutes from the Federal Reserve's most recent policy meeting, which showed that policymakers were mostly in agreement that they should start decreasing stimulus in mid-November or mid-December due to rising inflation concerns.
The tech-heavy Nasdaq 100 beat major equity benchmarks, while the NYSE FANG+ index of behemoths like Amazon and Alphabet rose around 1%.
After a three-day decline, the S&P 500 recovered. Yields on ten-year bonds remained below 1.6%. The two-year rate, which is more responsive to policy changes, increased. After warning that increasing fuel prices would imperil profitability this quarter, Delta Airlines led losses among US airlines.
Consumer prices in the United States increased more than expected in September, highlighting inflationary pressures. The Biden administration is attempting to alleviate supply-chain bottlenecks in time for the holiday shopping season, but officials recognize that their choices are limited.
Producers' expenses have risen as a result of exceptional transportation issues, material shortages, high commodity prices, and growing salaries. Several businesses have passed on a part of those expenses to their consumers, resulting in higher, longer-term inflation.
Asia Session (10/13/2021)
The majority of Asian markets climbed as traders weighed the economy's resilience to inflationary pressures and a projected decrease in the Federal Reserve's post-pandemic support.
In Japan and South Korea, stocks rose, while they fluctuated in China as data revealed the sharpest rise in producer prices since 1995.
The tech-heavy Nasdaq 100 outperformed the S&P 500 as US futures raced higher after Wall Street ended a three-day losing run.
Longer-term treasuries have reduced their gains, and a key part of the yield curve has flattened to around a one-year low.
Inflation in the US remained over 5%, and Fed minutes indicated that bond purchases would be tapered either in mid-November or mid-December.
Gold was approaching its highest level in over a month as crude oil held above $80 a barrel.
Europe Session (10/13/2021)
Inflation statistics, along with earnings reports, will provide vital insights into company health in an era of growing prices, and US equities futures bounced ahead of them.
The S&P 500 and the NASDAQ 100 contracts both gained ahead of the US consumer report, with the tech-heavy NASDAQ leading the way. The prospect of a semiconductor shortage limiting Apple's manufacturing dampened the mood.
The 10-year Treasury yield in the United States remained below 1.60%, while a dollar index fell. Despite a stop in the rise, crude maintained near $80 per barrel amid a worldwide energy shortage. The price of Chinese thermal coal futures has risen to a new high.
Apple shares dipped in the premarket following reports that the company's iPhone 13 production estimates for 2021 might be lowered due to chip shortages, focusing attention on pandemic-related supply-chain snarls as earnings season begins.
Thursday FX options expiries
EUR/USD: 1.1585 (EUR 104M), (SPOT:1.1566), 1.156 (EUR 389M)
USD/JPY: 113.5 (USD 360M), (SPOT:113.43), 113.05 (USD 90M)
GBP/USD: 1.3675 (GBP 183M), (SPOT:1.3639), 1.36 (GBP 374M)
USD/CAD: 1.2505 (USD 94M), (SPOT:1.2454), 1.229 (USD 193M)
AUD/USD: 0.7375 (AUD 229M), (SPOT:0.7361), 0.735 (AUD 450M)
NZD/USD: 0.6968 (NZD 88M), (SPOT:0.6951), 0.69 (NZD 668M)
USD/CHF: 0.929 (USD 80M), (SPOT:0.927), 0.928 (USD 200M)
USD/NOK: 8.64 (USD 15M), (SPOT:8.5232), 0.0 (USD 0M)
USD/SEK: 8.549 (USD 36M), (SPOT:8.7337), 0.0 (USD 0M)