- Markets were muted in the early part of the week and inflation concerns were the main focus as crude oil futures hit their highest level since 2014.
- Other negatives were a warning from Bank of England Governor Andrew Bailey that a “very damaging” period of inflation could occur unless policymakers take action and concerns over the debt crisis at Chinese property giant Evergrande also continued to weigh.
- On the positive side data released on Tuesday from the Office for National Statistics showed that the UK jobs market continues to recover with the unemployment rate falling to 4.5%, the lowest in a year.
- Other data mid-week showed that the UK economy grew by 2.9% in the three months to August end, slightly below expectations of 3%, but UK industrial production was up 0.8% in the month of August, well ahead of forecasts.
- Also helping sentiment was news that emergency relief measures to counter the energy crisis would be imminently approved in Europe. UK stocks had a strong end to the week similar to other global markets.
- Our Breadth Indicator stayed neutral but our Momentum Indicator ticked higher for the first time since June .
- Weaker-than-expected US jobs data released on the previous Friday tempered any bullish sentiment at the start of the week.
- US inflation data for September came in slightly higher than expected at 5.4% and the latest Fed minutes indicated the central bank could begin the tapering process as early as mid November.
- Markets had to weigh those negatives against a positive start to third-quarter earnings season and an unexpected easing of inflation in China with consumer price inflation slowing to a 6-month low of 0.7% for September.
- Investors chose to focus on strong reports from major US banks and stocks closed strong for the week.
- Our Breadth Indicator stayed negative and our Momentum Indicator ticked down again.
The Big Picture 15th October 2021
Market Sentiment 15th October 2021
U.S. Risk Barometer 15th October 2021
Europe Risk Barometer 15th October 2021
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