Macroeconomic/ geopolitical developments
- The “risk off” theme that had struck global financial markets earlier in September resumed into month-end as inflation concerns returned, alongside higher yield pressures.
- Global stock indices reversed previous recovery rebounds, looking technically vulnerable.
- Debt ceiling and stimulus uncertainty are also weighing on riskier assets.
- Although the federal government passed a short-term spending bill to avoid a partial shutdown, no progress was made in raising the federal debt limit.
- Global supply chain worries have been typified by the queues at the fuel pumps in the UK and the shortage of HGV drivers leaving supermarket shelves with gaps.
Global financial market developments
- Global shares indices sold off in September, with the S&P 500 posting its worse month since March 2020 during the COVID-19 rout.
- US yields have marched higher since the prior week’s Federal Open Market Committee (FOMC) meeting where they indicated that tapering of Bond purchases is on the agenda with a first interest rate hike anticipated in 2022.
- The US Dollar rallied again with rising US yields.
- EURUSD fell further with the US Dollar rallying.
- GBPUSD remains weak, increased vulnerability due to inflation and supply chain concerns.
- Gold fell further with the stronger US Dollar.
- Oil again extended its strong advance from August.
- Copper is still caught in a sideways range.
Key this week
- Geopolitics:
- Golden Week in China sees markets closed all week until Friday.
- OPEC+ meets Monday with possible productions boosts to be announced.
- Monitoring Congressional discussions regarding raising the federal debt limit.
- Central Bank Watch: The Reserve Bank of Australia (RBA) and Reserve Bank of New Zealand (RBNZ) interest rate decisions and statements are on Tuesday and Wednesday respectively.
- Macroeconomic data: The data standouts this week are the global Services PMIs released on Tuesday and the US Employment report on Friday.
| Date | Key Macroeconomic Events |
| 04/10/21 | OPEC+ Meeting |
| 05/10/21 | RBA interest rate decision and statement; global Markit Services and Composite PMI; US ISM Services PMI |
| 06/10/21 | RBNZ interest rate decision and statement; EU Retail Sales |
| 07/10/21 | German Industrial Production |
| 08/10/21 | China Services PMI; US Employment report; Canada Employment report |
