US Session (11/17/2021)
Stocks slumped on fears that rising inflation may jeopardize the global economic recovery, prompting central banks to raise interest rates sooner than expected. treasuries rose.
Traders took some risk off the table as data revealed a slowdown in new home development in the United States, implying that builders are struggling to break ground on projects due to high material prices and continued labor shortages. Target Corp. fell after warning that cost pressures are increasing, fueling fears that inflation may eat into retailer profitability. The NASDAQ 100, which is heavy on technology, beat key indexes, spurred by a rally in tech titans Apple and Tesla.
According to GS' CEO, Solomon markets may face a rough period as the economy attempts to recover from the rapid impact of the epidemic. If interest rates rise, it will "take some of the euphorias out of some markets," he said in an interview at the Bloomberg New Economy Forum in Singapore.
The worst quarter for the S&P 500 since the pandemic appears to have scared off some do-it-yourself investors. According to the SEC and market data compiled by major newswire Intelligence, the retail trading surge that began with lockdowns has now subsided, with total equity volume from individual investors falling to 19% in the third quarter, down from 24% at the start of the year.
Asia Session (11/17/2021)
Most Asian equities dipped on Thursday, while treasuries held firm, as traders considered the risks to the global economic recovery posed by the potential of greater monetary-policy tightening to combat inflation.
Japan's, China's, and Hong Kong's equities all fell, with technology stocks leading the way. Futures on the S&P 500 varied, while contracts on the Nasdaq 100 gained. Stocks in the US fell overnight as a result of reports from the housebuilding industry indicating high material prices and manpower shortages. Target fell on fears that rising costs will eat into profitability.
Earnings from Alibaba Group in China will provide insight into the impact of Beijing's regulatory limitations. China's Evergrande Group, which is heavily in debt and is at the forefront of the country's real-estate liquidity crisis, has announced that it will sell its stake in Hengten Networks Group for $273 mln. Country Garden Services is attempting to raise capital through equity markets.
The dollar index fell further from its peak in more than a year. Treasuries remained steady after closing higher in US hours, despite a lackluster response to a 20-year note auction.
Europe Session (11/17/2021)
European equities and US equity futures were trading side by side as the greatest outbreak of covid infections since the pandemic's inception stifled the rally.
The STOXX 600 index remained relatively unchanged, with travel and leisure suffering the worst losses. Futures for the S&P 500 and the NASDAQ 100 remained stable.
Following statistics showing the largest increase in US Retail Sales since March, the dollar remained near a one-year high. The euro fell to its lowest level since July 2020, as new virus infections in Germany reached an all-time high and unvaccinated Austrians were placed under lockdown.
Meanwhile, the pound rose to its highest level against the euro in over nine months as higher-than-expected inflation statistics fuelled hopes for a rate hike by the Bank of England.
ECB's de Guindos: In my opinion, there will be no rate increase in 2022.
Turkey’s Pres. Erdoğan: We will remove the burden of interest rates from citizens. (Turkish Lira weakened)
UK CPI YoY Actual 4.2% (Forecast 3.9%, Previous 3.1%) (Sterling Strengthened)
ECB's Rehn: Inflation is accelerating on energy and supply crunch.
China will relax developer financial restrictions in the $152 billion ABS market.
Thursday FX Options Expiries
EUR/USD: 1.2700 (EU897.7M), 1.1645 (EU650.9M), 1.1290 (EU551.9M)
USD/CAD: 1.2330 ($1.25B), 1.2500 ($1.04B), 1.2380 ($770M)
USD/JPY: 114.25 ($758M), 113.90 ($605M), 114.20 ($590M)
USD/CNY: 6.3830 ($1B), 6.4400 ($974M), 6.6400 ($535M)
AUD/USD: 0.7250 (AUD575.2M), 0.7430 (AUD550.5M), 0.7150 (AUD470.1M)
USD/BRL: 5.60 ($750M), 5.85 ($450M), 4.80 ($375M)
EUR/GBP: 0.8400 (EU1.13B), 0.8450 (EU618.9M), 0.8460 (EU481.1M)
GBP/USD: 1.3400 (GBP895.6M), 1.3550 (GBP407.3M), 1.3500 (GBP344.3M)
NZD/USD: 0.6910 (NZD405.2M)