High inflation persists in the US - 14.10.2021

On Wednesday, the US dollar index dropped markedly due to unexpectedly weak economic data. Inflation in the US in September again accelerated to 5.4% in annual terms, compared with 5.3% in August. Investors expected it to remain unchanged. In theory, high inflation should accelerate the Fed's rate hike. Despite this, the U.S. 10-Year Bond slipped to 1.53% from its 4-month high of 1.63% on Tuesday. CME's Fedwatch service has a 50% chance of raising the Fed's rate in July 2022. The probability of this event increases to 90% only by December 2022. However, a strong weakening of the US dollar is unlikely to happen, as the FOMC Minutes turned out to be positive. Most likely, the Fed will announce a reduction in the redemption of US government bonds at the next meeting on November 3. Positive data on the labor market in Australia for September came out this morning. This helped strengthen the Australian and New Zealand dollars. Bitcoin hit a new high of $ 58,500 today. Investors reacted positively to the Cambridge Center for Alternative Finance data that the United States became the world leader in bitcoin mining with a 35% share. They hope that this will help in creating a convenient regulation of the cryptocurrency market.

Yesterday US stock indexes rose on the back of economic statistics. The decline in government bond yields had a positive impact on share prices. High dollar inflation boosts revenue for US companies. JPMorgan Chase's third-quarter profit exceeded forecasts, but its shares still fell 2.6%. Quotes American Express Company on Wednesday dropped 3.5%, Visa - 0.7%, Mastercard - 0.9%. Overall, the S&P 500 bank index fell 1.3%. It is likely that the strong growth of the cryptocurrency market and new highs in the price of bitcoin will continue to negatively affect the shares of the American banking sector. At the same time, it can support the IT sector. In particular, Amazon.com, Alphabet and Microsoft rose 1% yesterday. Investment management company BlackRock published good financials and its shares gained 3.8%. Today UnitedHealth, Alcoa, as well as representatives of the banking sector Bank of America, Citigroup, Wells Fargo, Morgan Stanley and U.S. Bancorp are going to publish their quarterly financial results. In addition, the US is to publish data on the labor market for the week and the Producer Price Index (producer price index) for September. Their forecasts look negative. Nevertheless, futures for US stock indexes are now growing in anticipation that corporate reporting may be good.

Today, world oil prices are rising for the second day in a row, but have not yet hit their recent highs. According to the independent American Petroleum Institute (API), US oil reserves increased by 5.2 million barrels over the week. This has happened for the third week in a row. As we can see, the growth of American stocks could not negatively affect the market. Investors are worried about the U.S. Energy Information Administration (EIA) on a possible reduction in oil production in the United States in 2021 by 60 thousand barrels per day (bpd) - to 11.02 million bpd. At the same time, the EIA expects that the price of Brent oil by the end of the year will be $ 81 per barrel. Copper quotes are rising today for the second day in a row on the back of a decrease in its reserves in China and an increase in imports in September.