Ipek Ozkardeskaya
Swissquote Bank Ltd
The US government won’t be shut today, as Joe Biden signed a funding bill that should keep the US government agencies running until December 3rd. So, the short-term solution to the US debt ceiling issue should give a certain relief to US equity markets in the short-run, after the S&P 500 finally couldn’t hold on for longer and gave in the 100-dma resistance to close the session a touch above the 4300 mark.
But the picture is not optimistic. US futures are in the red as Asian equity markets kicked off the new month on quite a negative note. We saw Japan’s Nikkei index plunge more than 2.5% overnight, as Australian ASX200 slid close to 2% on rising inflation fears, which would keep the central banks’ hands tied faced with a slower economic recovery due to the skyrocketing energy and commodity prices.
In summary, the high inflation is about to become a worst headache than the pandemic itself, as at least for the pandemic, central banks had tools to use. With this high inflation, they have nothing to do.
And the traditional hedge for inflation and a market rout gold has not shouted present in September decline in equity markets, nor did Bitcoin.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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