Sentiment worsens on Monday; stocks fall, oil jumps further

By Peter Bukov|

Published: October 18 2021, 08:22 GMT+0

Sentiment worsens on Monday; stocks fall, oil jumps further

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The US equity futures were down notably on Monday as sentiment deteriorated after week Chinese macro data. 

Chinese GDP declined to 4.9%, down from 7.9% previously. Industrial production also came out much weaker than expected, printing 3.1%, way below analysts’ expectations of 4.5%, and down from 5.3% in the previous month. However,  Chinese retail sales surprised to the upside and printed 4.4%, up from 2.5% in August,

Nevertheless, investors focused the most on the weak GDP print; therefore, equities suffered. The tech-heavy NASDAQ index was down more than half a percent during the London session, while the S&P 500 index was nearly half a percent weaker as well. 

The Greenback was trying to erase some of its last week’s losses in the Forex Market, and the EURUSD currency pair slid below the 1.16 threshold. However, the USDJPY pair remained bid and settled above the 114 level.

Investors will also pay attention to the latest Bank of Canada Business Outlook survey, due later in the day, most likely influencing the Loonie, i.e., the USDCAD pair. 

In commodities, gold was down slightly, heading toward the 1,760 USD zone. At the same time, silver was stronger, trying to rise above 23.40 USD. On the other hand, oil seems unstoppable, with the WTI benchmark climbing again today, rising above 83 USD a barrel for the first time since October 2014.

Additionally, copper is up nearly every day, rising more than 10% over the last few days, attacking the current cycle highs near 4.8 USD. 

Elsewhere, the Bank of England Governor Andrew Bailey said on Sunday that surging energy prices would prolong a pulse in inflation, and policymakers “will have to act” if they see risks. Sterling managed to settle above the 50-day moving average against the USD, switching the short-term outlook to bullish. The next critical resistance for the pair remains at 1.38, which should be the next target in the current leg higher. 

Later in the day, the US industrial production for September is due, expected to halve to 0.2% from 0.4% previously. Additionally, the capacity utilization for September will likely stay at 76.5%. However, these data rarely cause any market volatility at all.