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Archinomics Weekly - Monday 27th September 2021

2 years ago



Global stock markets fell at the beginning of the week, on fears of contagion from the Evergrande debt crisis. US markets recovered to finish the week slightly higher, as did European markets. But most Asian and emerging markets struggled to recoup their losses, and finished the week slightly lower.


The 10-year US Treasury yield rose to its highest level since March, as Federal Reserve Chairman Jay Powell hinted that tapering of the central bank’s bond-buying programme could be completed by the middle of 2022. European government bond yields were also higher over the week. And in corporate bond markets, investment grade and high yield bond yields were also higher in Europe and the US.


The US dollar rose against sterling and the yen, but was flat versus the euro last week. The euro was stronger against sterling and the Japanese yen, while sterling lost value against the dollar and euro. 


It was another positive week for oil, as OPEC forecast strong demand in 2022. The price of Brent Crude rose 3.7% to $78.10 per barrel. Gold was slightly weaker, falling 0.2% to finish at $1,750 per ounce.

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The UK’s first green bond sale attracted strong demand, with investors placing £100 billion of bids for the £10 billion of 12-year government debt.


Nine officials from the US Federal Reserve now expect an interest rate rise in 2022, according to the latest projections. Fed Chair Jay Powell also hinted that the central bank could announce the tapering of its bond-buying programme in November.

A debt crisis engulfed Chinese property company Evergrande, as deadlines for interest payments loomed.

The German federal election saw a marginal victory for the Centre-Left, but the shape of any coalition government has yet to be decided.

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Official PMI data will give insight into confidence in the economy, with expectations for a continued slide from recent highs as Covid-19 concerns remain.

Investors will be watching closely as the Evergrande crisis continues to unfold.

Listen to our weekly podcast for more information and our experts’ insights.


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