Daily Update 18 October, 2021

Global Markets Update                                                       

  • U.S. equity markets closed higher on Friday, with the Dow Jones up +1.1%, S&P 500 up +0.7% and NASDAQ gaining +0.5%, after data revealed U.S. retail sales unexpectedly increased in September in a broad advance with the value of overall retail purchases increasing +0.7% MoM (excluding autos, sales advanced +0.8% MoM), suggesting resilient demand for merchandise even as production constraints limit supply. U.S. consumer sentiment fell unexpectedly in early October to the second-lowest level since 2011, as Americans grew more concerned about both current conditions and the economic outlook.
  • Long-dated U.S. treasury yields were higher, with the 2-Yr yield at 0.395% and the 10-Yr yield at 1.570%.
  • European markets. European equity markets closed higher on Friday, with Stoxx Europe 600 up +0.7% and German DAX up +0.8%. The U.K. FTSE 100 was up +0.4%, led by gains in banks after BOE Governor Andrew Bailey moved to strengthen the case for raising interest rates, saying the current surge in energy prices means faster inflation could last longer.
  • Asian markets. Asian equity markets closed higher on Friday, with the Shanghai Composite up +0.4%, after PBOC assured that risks to the financial system stemming from the debt crisis at China Evergrande Group are “controllable” and unlikely to spread, announcing it has asked lenders to keep credit to the real estate sector stable and orderly. The Hang Seng was up +1.5%, KOSPI up +0.9% and Nikkei 225 gained +1.8%.
  • WTI oil is trading at US$82.28 a barrel. Iron ore price is at US$125.15 per ton. Spot gold is trading at US$1,768 per oz.

ASX Market Update

  • ASX performance. The ASX 200 closed +0.69% higher on Friday.
  • Pendal Group Ltd (PDL) slumped -11.5%, after reporting net outflows for 4Q21 of A$2.3bn. ARB Corp Ltd (ARB) was up +5.6%, after Company’s Chairman announced profit growth is expected to continue for 1H22, with the order book robust in the major markets in which the Company operates despite shipping disruptions and rising steel prices. Treasury Wine Estates Ltd (TWE) was down -5.4%, after announcing sales of its luxury brands have been slightly lower than expected so far in FY22 amid Covid-19 lockdowns in Australia and the gradual reopening of the U.S. economy.

Today’s trading. In China, GDP data is to be published.