October 7, 2021

Market Remains Worrying, Here Are 5 Market Situations That 'Traders' Should Watch Out For!

 The U.S. stock futures index posted lower readings due to continued uncertainty about the debt ceiling, the probability of a reduction in asset purchases of $ 120 billion a month, a global chip shortage, supply chain disruptions and slowing global economic growth.

On the side of bulish sentiment is that an increase in interest rates from zero to 25 basis points will not be raised in the near future.

Mortgage demand in the U.S. fell 6.9% in the week ended Oct. 1, which was the biggest decline since the last week of June, according to data from the Mortgage Bankers Association. Home refinancing applications fell 9.6% to a three -month low and applications to buy a home fell 1.7%.

The September ADP report showed 568,000 new jobs were created compared to a forecast that targeted only 428,000. The report covers about 400,000 U.S. business customers. and 23.0 million U.S. workers. who work in all sectors of private industry.

The U.S. dollar index continued to rise to a one -year high as U.S. Treasury yields. making the dollar more attractive to investors. There is a consensus view that the Federal Reserve will announce a $ 120 billion a month cut in its asset purchase program at its November policy meeting. This is likely to continue to push the US dollar higher.

The Euro slipped to $ 1.15, its lowest level since July 2020. Pressure on the euro was linked to reports that eurozone retail sales rose 0.3% from the previous month in August 2021, missing the 0.8% growth target.

European Central Bank President Christine Lagarde on the other hand continues to reiterate that the recent rise in inflation is temporary.

The British pound traded lower after reports showed the IHS Markit / CIPS UK construction PMI fell to 52.6 in September, missing market expectations of a 54.0 reading.