Trader Noble Market Commentary 19/08/2021

On 19/08/2021 is bringing you Bryan Noble. U.S. Equity Markets extended this week’s long overdue decline, led by both the S&P and Dow which finished yesterday’s session with a loss of 1.07%. The VIX surged on the back of this latest sell-off, closing higher by 20%. Markets fell for the second straight day. Federal Reserve policy was the story of the day. On Tuesday, Federal Reserve Chairman Jerome Powell said it needs to put crisis tools away as the COVID-19 emergency has receded, implying the central bank is closer to winding down bond purchases. This was followed up by St. Louis Fed President James Bullard yesterday afternoon, who said he would like to see the central bank end its asset purchases in the first quarter of 2022, before raising rates for the first time in the fourth quarter of 2022. And the Fed’s Minutes from the most recent policy meeting showed that asset purchases may wind down towards the end of this year. That is why we saw markets spike lower just after 7 p.m. In terms of economic data, Housing Market data was mixed. Housing Starts fell short of estimates, while Building Permits beat expectations. But both remain elevated on a historical basis, indicating strong demand for homes. European Markets closed lower. U.K. Consumer Price Index (“CPI”) data for July was weaker than expected, easing versus June’s rate of growth, and showing no change. Euro-Zone final CPI for July was in line with the initial reading, as the year-over-year figures hit a 36-month high while the month-over-month numbers saw contraction. Spain’s government received $10.5 billion from the European Union’s recovery fund, with another $11.7 billion in funding coming in December. In Asia, Japan’s export data for July was weaker than expected, falling versus June, despite the total yen value holding steady near the highest level this year. Chinese shipping ports are seeing vessel backups increase as the country’s zero-tolerance COVID-19 policy delays the l…

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