US Session (10/20/2021)

US equities extended their rally into a sixth day, putting the S&P 500 within reach of an all-time high, it gained 0.4% as traders weighed company earnings against risks from inflationary pressures.

Verizon Communications and Anthem were higher after better-than-expected results.

Meanwhile, Novavax plunged on another vaccine delay, and Netflix was lower after an underwhelming outlook.

The gains come on the heels of the S&P 500’s best start to an earnings season in the last two years with the index gaining about 3.6% in the first week. Solid corporate results have helped counter concerns stemming from elevated inflation, driving stocks higher.

Also, crypto shares also rose as Bitcoin surpassed its previous record.

The yield on the 10-year Treasury note was little changed as corporate earnings have taken some of the spotlights away from concerns about stagflation - the combination of lower growth and higher inflation. Still, clouds are gathering over the economic recovery in the face of higher energy costs, global supply-chain bottlenecks, and reduced central bank support.

The dollar continued to weaken against major peers on Wednesday as traders increased bets that central banks around the world will raise interest rates before the Federal Reserve to combat price pressures.

Fed's Quarles said the Fed is not “behind the curve” with its monetary policy and said he still views current price increases as “transitory.”

Oil gained in New York as inventories fell. Base metals declined after China launched a blitz of measures to tackle the energy crisis.

Elsewhere, Congressional democrats made headway in breaking a stalemate on the president’s multitrillion-dollar tax and spending package.

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Asia Session (10/20/2021)

Asian equities remained stable as investors considered corporate results, rising inflation, and concerns from China's real estate industry.

Stocks in Japan fell, while those in China and Hong Kong fluctuated.

Struggling developer China Evergrande Group plummeted after canceling negotiations to sell its property-management business and reporting a drop in sales.

US futures were choppy after a volatile Wall Street session that saw the S&P 500 near a new high while the tech-heavy Nasdaq 100 fell.

Longer-term Treasury rates continued to rise in the aftermath of a weak 20-year auction. The 10-year breakeven rate, which is a proxy for where investors expect annual inflation rates to be over the next decade, reached its highest level since 2013.

The dollar remained weak, crude oil rose, and bitcoin was trading around $65,300 after reaching an all-time high.

Chinese coal futures have plummeted as authorities try to keep power prices under control.


Europe Session (10/20/2021)

Wednesday's stock market performance was mixed as investors considered company profits and the concerns of inflationary pressures. The dollar and government yields were hardly altered.

Chinese technology firms listed in the United States, as well as Hong Kong peers such as Alibaba, rose in pre-market trade in hopes that the worst of Beijing's regulatory crackdown had passed. Tesla will be in the spotlight on the busiest day of the earnings season thus far. After the S&P 500 finished near a record, index futures were little changed.

Meanwhile, progress on Biden's economic agenda appeared to be getting closer as Senate Democrats made strides in breaking a stalemate on the multitrillion-dollar tax and spending bill.

Iraq's Oil Minister Jabbar: OPEC+ is now talking about ways to produce well-balanced oil rates, no decision yet to include more production above the agreed levels.

ECB's Weidmann posted his resignation from Bundesbank as president. He will be leaving by the year-end citing personal reasons.


Thursday FX Option Expiries

USD/JPY: 109.45 ($640M), 115.30 ($610M), 110.00 ($518M)
AUD/USD: 0.6765 (AUD552.8M), 0.7125 (AUD478.6M), 0.7395 (AUD458.4M)
EUR/USD: 1.1740 (EU987.2M), 1.1500 (EU420M), 1.1825 (EU358.8M)
USD/CAD: 1.2650 ($1.02B), 1.2300 ($380M)
USD/CNY: 6.4400 ($1.21B), 6.6000 ($800M), 6.5000 ($617M)
NZD/USD: 0.6775 (NZD2.7B), 0.6950 (NZD2.34B)
USD/BRL: 5.5500 ($400.3M), 5.6230 ($305M)
EUR/GBP: 0.8550 (EU800.8M), 0.8460 (EU609.8M), 0.8410 (EU330M)
USD/KRW: 1119.40 ($610M), 1450.00 ($496M), 1160.00 ($470M)
GBP/USD: 1.3350 (GBP418.4M), 1.3550 (GBP418.3M)
USD/MXN: 20.53 ($350M), 20.50 ($330M), 21.50 ($300M)