US Session (11/01/2021)

Stocks reached a new high as strong corporate earnings overshadowed disappointing manufacturing data.

Treasuries dropped.

The S&P 500 recovered from earlier losses, with gains led by energy and consumer discretionary companies. For the first time, the Dow Jones Industrial Average crossed the 36,000 mark. A small-cap index rose 2.7%. A group of retail-trader favorites, including Gamestop and AMC Entertainment holdings had their best day since August.

More than 80% of S&P 500 companies reporting third-quarter results outperformed Wall Street expectations. Since the start of the earnings season, this has laid the groundwork for a stock market rally.

Meanwhile, data showed that manufacturers faced persistent supply-chain challenges in October. Fed officials will meet this week as investors worry that the economy is facing the most widespread supply crunch since the 1973 oil crisis.

According to Morgan Stanley strategist Michael Wilson, the bullish trend in equities may continue into the Thanksgiving holiday later this month, but "not for much longer," as the Fed is expected to begin tapering and earnings growth will slow further into next year.

Wall Street - Definition, Overview, History, Stockmarket Crashes

Asia Session (11/01/2021)

Asian stocks remained steady as traders assessed a record-high close for US equities and awaited key central bank decisions amid concerns about rising inflation.

Hong Kong rose after an index of Chinese stocks traded in the US rose the most since early October.

Japan fell and China was little changed.

Contracts in the United States fluctuated after the S&P 500 reached a new high and the Dow Jones Industrial Average reached 36,000 for the first time. Electric vehicle giant Tesla has extended a rally.

The 10-year treasury yield and the dollar both rose ahead of the Federal Reserve meeting. The policy review comes amid price pressures fueled by the most widespread supply shortage in the US since the 1973 oil crisis. The Fed is expected to announce a reduction in its massive bond-buying program.

Australia's central bank meeting on Tuesday is being overshadowed by speculation that it will abandon a bond-yield target after declining to defend it. The value of the country's sovereign bonds has declined.

Bank of England policymakers go into their November 4th meeting knowing that failure to deliver a previously unthinkable interest-rate hike would call into question their credibility with markets.


Europe Session (11/01/2021)

European markets soared to a record high, while US index futures advanced on earnings surprises and optimism that the world's largest economy's recovery is on track.

December contracts on the S&P 500 index rose 0.4% after the underlying index registered its greatest monthly increase since November of last year. In Europe, healthcare stocks rose. As investors anticipated this week's Federal Reserve meeting for indications on stimulus withdrawal, the dollar and bond yields rose. Oil prices rose as a result of supply concerns.

Even as bond markets react to prospects of prolonged inflation, shares are setting new highs as corporate profits gain from post-lockdown demand. Investors are now looking forward to the Fed's policy announcement on Wednesday when it is expected to announce the end of bond purchases.

France has set Monday midnight as the deadline for resolving the France-UK dispute.

UK Foreign Secretary Truss: If France does not rescind their threats, we will take action on trade.

Goldman Sachs: Anticipating US Federal Reserve to begin hiking interest rates in July 2022 (previous forecast Q3 2023).

OPEC+ intends to raise oil output by 400k BPD every month to ensure enough supply to markets - Kuna News

EU Commission VP Šefčovič accuses the UK of seeking a Brexit clash, warning the UK not to initiate a confrontation over NI - The Telegraph.


Tuesday FX Option Expiries

USD/JPY: 114.25 ($602M), 84.20 ($500M), 113.50 ($430M)
EUR/USD: 1.1585 (EU1.82B), 1.1645 (EU796.1M), 1.1675 (EU733.2M)
USD/CAD: 1.2560 ($690M)
USD/CNY: 6.3700 ($900M), 6.5250 ($300M)
AUD/USD: 0.7100 (AUD446.5M)
EUR/GBP: 0.8440 (EU580M), 0.8525 (EU440M)
GBP/USD: 1.3800 (GBP576.8M), 1.3650 (GBP315.8M)