US Session (10/25/2021)

Stocks in the United States surged to a new high as traders braced for a slew of earnings reports from technological heavyweights such as while keeping inflation fears and mounting COVID-19 threats in mind.

The consumer discretionary, energy and materials sectors propelled the S&P 500 to a new high. Paypal surged after the firm announced that it will not pursue an acquisition of Pinterest, putting an end to days of speculation about a potential $45 billion merger. Tesla rose after obtaining an order for 100,000 vehicles from Hertz Global Holdings.

Still to come: the five top U.S. technology companies are scheduled to report earnings.

Oil prices fell after reaching $85 per barrel for the first time since 2014, with traders looking ahead to impending discussions between Iran and the European Union, which might lead to the resuscitation of a 2015 nuclear deal.

Short-maturity Treasury yields fell and the dollar rose as Fed's Powell signaled that inflation could remain high for a longer period of time, fueling market worries that persistent price hikes may force policymakers to raise borrowing costs.

Gold has risen above $1,800 per ounce.

Despite the threats posed by pricing pressures caused by supply-chain bottlenecks and increasing energy costs, global stocks have remained resilient. Treasury Secretary Janet Yellen is among those advising that the inflation crisis is only temporary and will subside in the second half of 2022. Investors are concerned that tighter monetary policy to keep inflation under control could increase volatility.

Traders are also keeping an eye on a delta virus strain breakout in China, which is anticipated to worsen. The country attempted to assuage fears about the economy's slowing with a long official media commentary describing how the government is managing risks and remains confident about meeting its goals for the year.

Argor Heraeus SA-branded one kilogram gold bars are arranged for a photograph at the Chinese Gold and Silver Exchange Society in Hong Kong, China.

Asia Session (10/25/2021)

Most Asian stocks rose after the S&P 500 set a new high, as corporate earnings and progress on Biden's economic agenda boosted sentiment, even as the debate over inflation risks heated up.

Equities rose in Japan and China and fluctuated in Hong Kong.

Traders digested reports of a video call on economic issues between China’s Vice Premier Liu He and US Treasury Secretary Yellen.

Futures in the US advanced, with Nasdaq 100 contracts outperforming. The tech-heavy index led overnight gains in the United States, as Tesla surged to a $1 trillion market cap.

The 10-year US treasury yield edged up and the dollar was steady.

The debate over price pressures rages on, with former US Treasury Secretary Summers claiming that officials will struggle to deal with "inflation reality" until they fully recognize it.

Europe Session (10/25/2021)

On Monday, US futures were mixed as traders prepared for a slew of earnings releases from technology heavyweights such as Facebook while keeping inflation fears and mounting COVID-19 threats in mind.

Futures on the NASDAQ 100 rose slightly, while contracts on the S&P 500 remained unchanged. The five top technology companies in the United States are scheduled to report results in the coming days, beginning with Facebook on Monday.

The 10-Year Treasury yield increased and the dollar held steady as Federal Reserve Chair Jerome Powell warned that inflation could remain high for a longer period of time, fueling market anxiety that persistent price increases may force policymakers to hike borrowing costs.

The STOXX Europe 600 index changed little. The basic-resources sector increased as crude oil and metals extended gains, while banks rose on the positive outlook of HSBC. The largest losers were telecommunications and industrials.

BoJ would be prepared to supply liquidity in renminbi if Japanese financial institutions encountered unanticipated difficulty in renminbi settlements by utilizing a swap arrangement.

The Bundesbank expects German growth to slow significantly in the fourth quarter.

Bundesbank: Inflation would continue to rise for the time being before progressively dropping next year.

ITV's Peston tweeted the national living wage in the United Kingdom is set to be increased to £9.50 per hour.

Tuesday FX Option Expiries

USD/JPY: 114.50 ($1.1B), 111.40 ($780M), 114.00 ($620M)
USD/BRL: 5.6500 ($335M), 5.4800 ($300M)
EUR/USD: 1.1610 (EU753.7M), 1.1600 (EU544.2M), 1.1725 (EU490.4M)
AUD/USD: 0.7175 (AUD680M), 0.7100 (AUD680M), 0.7040 (AUD680M)
USD/CNY: 7.2500 ($625M), 6.8340 ($450M), 6.5500 ($301M)
USD/CAD: 1.2400 ($720M), 1.2690 ($570M), 1.2825 ($400M)
USD/MXN: 20.28 ($460M)