US Session (12/16/2021)

On speculation that rate hikes may limit the attraction of the highly valued industry that has fueled the bull run in shares, technology companies pulled stock prices lower.

The Nasdaq 100 index has dropped the most since September, owing to losses in tech giants such as Apple and Tesla. On dismal revenue expectations, software behemoth Adobe fell 10%, while a barometer of semiconductor stocks fell around 4%. The S&P 500 lost gains triggered by betting that central banks can tighten policy to combat inflation without putting the economy in jeopardy. Financial, commodities, and industrial stocks all increased in value. bitcoin slid.

Despite the decline on Thursday, technology stocks remain among the year's most remarkable outperformers. Apple has lately approached what would be a historic $3 trillion market value, with valuations reaching levels last seen during the dot-com bubble. While the prospect of rate hikes may dampen the industry's appeal, other experts believe it will still do well because to its high earnings potential.

Meanwhile, policymakers are debating how to combat pricing pressures while balancing growth threats. To soften the transition away from crisis stimulus, the ECB temporarily increased regular monthly bond purchases for a half-year. The pound rose after the Bank of England boosted interest rates unexpectedly. The statements came after the Federal Reserve announced on Wednesday that it will speed up the pace at which it reduces asset purchases while forecasting rate hikes until 2024.

Bank of England raises key interest rate to 0.25% | Financial Times

Asia Session (12/16/2021)

Stocks fell led by a drop in technology shares, as monetary policy tightening to combat inflation buffeted sentiment, while growth risks from the omicron virus variant helped to sustain demand for treasuries.

The MSCI Asia-Pacific Index fell for the fifth time in six sessions, with Chinese technology stocks falling more than 2%.

Equity futures in the US and Europe were in the red after the Nasdaq 100 fell the most since September. The index fell due to a drop in demand for more highly valued technology stocks, as the Federal Reserve shifted its policy toward reducing excessive stimulus.

The 10-year treasury yield has recovered some of the ground lost during US hours. Continued demand for treasuries may reflect concerns that the rapidly spreading omicron strain will trigger curbs that dim the economic outlook.

The dollar index rose slightly but remained on track for its third weekly drop in a row.

Oil fell for the first time in three days, and bitcoin fell below $48,000.


Europe Session (12/16/2021)

Stocks and US futures both climbed on Thursday on optimism that tightening Federal Reserve policy could help combat high inflation without derailing economic development.

As investors awaited announcements from the European Central Bank and the Bank of England, European and UK shares rose. In premarket trade, the S&P 500 and NASDAQ 100 contracts climbed, with tech titans like Apple gaining, indicating that more gains are on the way after Wednesday's late rise.

The Treasury yield curve steepened after the Federal Reserve announced that it will double the rate at which it reduces bond purchases, with three quarter-point rate hikes in 2022, three more in 2023, and two more in 2024. The dollar fell against the euro and the pound, while the euro and the pound rose.

Under the fiscal 2022 budget, the Japanese government is expected to issue about 30 trillion yen in new JGBs, down substantially from the previous year's 43.6 trillion yen - Kyodo.

China tells Evergrande to pay workers and suppliers first.

Chinese creditors sue Evergrande for claims totaling $13bn - FT

The Turkish Central Bank has opted to use all of the available space to lower interest rates.


Friday FX Option Expiries

EUR/USD: 1.1300 (EU2.63B), 1.1200 (EU2.6B), 1.1400 (EU2.54B)
USD/JPY: 113.75 ($2.22B), 113.00 ($1.81B), 114.50 ($1.51B)
GBP/USD: 1.3000 (GBP1.82B), 1.3250 (GBP1.49B), 1.3350 (GBP1.24B)
AUD/USD: 0.7000 (AUD2.12B), 0.7100 (AUD564.8M), 0.7050 (AUD462.4M)
USD/CNY: 6.4000 ($1.43B), 6.6000 ($1.03B), 6.9000 ($900M)
USD/CAD: 1.2850 ($826M), 1.2900 ($785M), 1.2800 ($583M)
EUR/GBP: 0.8400 (EU1.98B), 0.8550 (EU681.9M), 0.8650 (EU672.8M)
USD/BRL: 5.6000 ($1.6B), 5.4500 ($1.31B), 5.3000 ($750M)
USD/MXN: 21.50 ($522M), 20.50 ($410M), 20.90 ($365M)
NZD/USD: 0.6700 (NZD325.4M)