Daily Update 14 October, 2021

Global Markets Update                                                    

  • U.S. equity markets closed mostly higher overnight, with the Dow Jones flat, S&P 500 up +0.3% and NASDAQ gaining +0.7%. According to minutes from Fed’s September policy meeting, officials broadly agreed they should start reducing stimulus in mid-November or mid-December, discussing an illustrative tapering path featuring monthly reductions in the pace of asset purchases, by $10bn in the case of Treasury securities and $5bn in the case of agency mortgage-backed securities. Prices paid by U.S. consumers rose in September by more than forecast with CPI increasing +0.4% MoM (+5.4% yoy, matching the largest annual gain since 2008).
  • Long-dated U.S. treasury yields were mixed, with the 2-Yr yield higher at 0.358% and the 10-Yr yield lower at 1.539%.
  • European markets. European equity markets closed higher overnight, with both the Stoxx Europe 600 and German DAX up +0.7% and U.K. FTSE 100 gaining +0.2%, however, sentiment remained weak as IMF warned of the risk of sudden and steep declines in global equity prices and home values as central banks withdraw the support and the IEA forecast turbulence in gas and oil markets to continue amid inadequate investments by energy companies.
  • Asian markets. Asian equity markets closed mostly higher overnight, with the Shanghai Composite up +0.4%, after data revealed China’s exports surged +28.1% MoM to a new monthly record in September, however, import growth slowed to +17.6% MoM, leaving a trade surplus of $66.8bn. KOSPI was up +1.0%, Nikkei 225 declined -0.3% and Hang Seng was closed because of typhoon Kompasu.
  • WTI oil is trading at US$80.58 a barrel. Iron ore price is at US$129.27 per ton. Spot gold is trading at US$1,793 per oz.

ASX Market Update

  • ASX performance. The ASX 200 closed -0.11% lower yesterday.
  • A2 Milk Co Ltd (A2M) surged +13.4%, after its peer Bubs Australia reported growing China sales in 1Q22 and pointed to a better outlook for daigou channels. Star Entertainment Group Ltd (SGR) gained +6.5%, after committing to improvement of AML compliance. Bank of Queensland Ltd (BOQ) was down -4.3%, after advising that NIM is expected to decline by 5-7bps in FY22.
  • Today’s trading. In Australia, unemployment data is to be published.