• GLOBAL CAPITAL MARKETS OVERVIEW:

Wall Street rebounded on Friday and profited this week as investors returned to economically sensitive cyclical stocks after more robust earnings reports and surprisingly optimistic news from retail trade data. US retail sales in September unexpectedly increased for the second consecutive month, indicating the resilience of consumers. At the same time, Goldman Sachs' earnings results broke expectations, and the earnings season continued. On Thursday, eight S&P 500 index stock companies led by financial giants Bank of America, Morgan Stanley, and Citigroup announced their quarterly results, and each of them exceeded expectations. The Dow Jones index rose 382.2 points, or 1.1%, to 35294.76 points; the S&P 500 index rose 0.8% to close at 4471.37 points, and the Nasdaq Composite index rose 0.5% to close at 14897.34 points. The three major stock indexes closed higher this week. The Toronto Stock Exchange's s&P/TSX composite index rose 0.5% on Friday to a record high of 20,928 points. After a strong US corporate earnings report stimulated optimism about the economy and continued increasing oil prices, the index rose 2.6% each week. . WTI crude oil closed this week at a new 7-year high above US$82 per barrel. Due to the surge in demand after the relaxation of travel restrictions related to the coronavirus, there may be a supply shortage in the coming months. In terms of data, Canadian wholesale sales experienced positive changes for the first time in three months. European stock markets continued their gains on Friday, marking their best week since March, after a solid start to the third-quarter earnings season, which prompted buying. On Thursday, the largest bank in the United States predicted that its quarterly performance would exceed the quarterly performance, and the banking industry was among them. Investors also welcomed the news: EU leaders will approve emergency measures next week to provide short-term relief to households and businesses in an unprecedented energy crisis. In terms of economic data, recent data show that European car registrations fell by 23.1% in September. In a single stock, German fashion retailer Hugo Boss rose 1%. The company raised its outlook for this year after its third-quarter earnings rebounded on the back of solid demand. The Frankfurt DAX index rose 2.5% this week to 15,587 points, the highest closing point since September 27 and the biggest weekly gain since March. On Friday, the FTSE MIB index rose 0.8% to 26,489 points, the highest point since August 11, continuing the 1.2% gain of the previous trading day. The solid quarterly earnings results had a positive impact on investor sentiment. Help quell the recent inflation panic. With oil prices reaching US$82 per barrel, the banking and energy sectors continued to boost the index. In contrast, the better-than-expected quarterly results of the US financial giants continued to affect the Italian stock market. The key stock index closed up 1.7% this week, the biggest gain in nine weeks. The FTSE 100 index rose 1.9% this week to a 20-month high of 7,234 points, the most significant increase since April. Driven by increasing banks and commodity-related stocks, traders are concerned about inflation and focused on solid earnings reports. Oil and metal prices continue to soar. Elsewhere, the United Kingdom and the European Union embarked on a new round of negotiations on the Northern Ireland issue. Previously, London called for large-scale reforms, while the Chinese financial regulators asked some significant banks to relax mortgages while worrying about the spread of China's Evergrande Group’s debt crisis. Loan approval. After Barclays and Bank of America raised their stock price targets among individual stocks, HSBC Holdings rose 1.9%. In comparison, Rio Tinto Group fell 1.4% on Friday after lowering its 2021 iron ore shipment forecast. The Chinese stock market closed higher on Friday but remained cautious amid economic slowdown concerns and expectations of policy easing. The Shanghai Composite Index edged up 0.4% to close at 3572 points, while the Shenzhen Composite Index rose 0.52% to close at 14416 points. . Investors speculate that under the risks of economic slowdown, policymakers may need to relax the economic environment while balancing the issue of continued inflation. Traders are currently waiting for China's third-quarter GDP growth data to be released on Monday to understand potential policy responses. The financial and information technology sectors and energy and coal stocks provided support to the market. The Nikkei 225 index rose 1.81% to close at 29069 points, while Topix rose 1.86% to close at 2024 points on Friday, ending a three-week decline and outperforming its peers in the Asia-Pacific region. Heavyweight technology stocks led Wall Street with strong corporate prospects and earnings expectations, driving a strong rebound. Tokyo Electron (Tokyo Electron) rose after 2.9%. Other notable volume gainers included robot manufacturers Fanuc (5.61%), Lasertec Corp (9.53%), Keyence (3.66%), and Sony Group (2.67%). At the same time, a Reuters article reported that the Bank of Japan may lower its growth forecast for this fiscal year on the grounds of tight supply and may lower its consumer inflation forecast as of March. The Standard & Poor's/ASX 200 Index rose 0.7% on Friday to close at 7362 points, the second consecutive week of gains, with extensive participation from different economic sectors. Energy, metals, and gold prices rose, and mining and energy stocks continued their gains from the previous trading day. Consumer-related travel and aviation stocks also boosted the market, as New South Wales has canceled home or hotel quarantine requirements for fully vaccinated travelers from November 1. Qantas shares rose 2% because international flights were restarted earlier than scheduled, reaching a land sale agreement. Other gainers were Webjet (4.05%), Flight Centre (3.77%), and Regional Express Holdings (6.12%). The NZX 50 index fell 36 points, or 0.28%, to close at 13011 on Friday. Before this, the index reversed its early gains of about 115 points and fell 0.57% this week under the influence of rising yields and the outbreak of the new crown pneumonia. The New Zealand government’s 10-year bond yield reached 2.195% last Friday. The last time it was touched was in March 2019. After tracking global yields, the country’s central bank showed greater performance despite the fight against COVID-19. The tendency to raise interest rates. On Friday, the government also reported 65 new community cases in Auckland, forcing the authorities to admit that the delta epidemic is growing faster than expected. In addition, energy stocks Meridian Energy (-1.33%) and Contact Energy (1.71%) dragged down the market after volume sales.

 

• REVIEWING ECONOMIC DATA:

Looking at the last economic data:

- US: Preliminary estimates show that the University of Michigan’s consumer confidence in the United States fell from 72.8 in September to 2021 in October, which was lower than the market’s forecast of 73.1. The indicator for measuring current conditions fell from 80.1 to 77.9, while the expected sub-index fell from 68.1 to 67.2. At the same time, inflation expectations for the next year rose from 4.6% to 4.8%, while the 5-year outlook fell from 3% to 2.8%. Delta variables, supply chain shortages, and declining labor force participation rates will continue to affect the pace of consumer spending until 2022. Another less obvious factor has contributed to the decline in optimism: people’s confidence in the government’s economic policies has fallen sharply in the past six months.

- US: In August 2021, US manufacturers and trade inventories increased by 0.6% from the previous month, after rising by 0.6% in July, in line with market expectations. Wholesalers (1.2% in July and 0.6% in July), manufacturers (0.6% and 0.6% in July), and retailers (0.1% and 0.4% in July) all increased their inventories. Compared with the same period last year, corporate stockpiles rose by 7.4%.

- US: In September 2021, US export prices rose slightly by 0.1% from the previous month, which was lower than the 0.4% increase in August and lower than market expectations of 0.6%. This is the 16th consecutive month that export prices have risen, although the rate is slowest. Non-agricultural export expenses increased 0.3% from a month ago because the rise in industrial supplies and materials and non-agricultural foods offset the decline in consumer product prices. In addition, the cost of agricultural products fell by 1.7%, following a 0.9% reduction in August, the most significant drop since August 2020. Soybean and corn prices have fallen sharply, enough to offset the impact of rising cotton, wheat, fruit, and vegetable prices. Compared with the same period last year, export prices rose by 16.3%, and in August, they rose by 16.8%.

- US: In September 2021, the US Import Commodity Price Index rose 0.4%, rebounding from the 0.3% decline in August, while the market expected a 0.6% increase. The cost of imported fuel rose by 3.7%, after falling by 3.0% in the previous month, mainly driven by increasing oil and natural gas prices. At the same time, non-fuel import prices remained unchanged after a tiny 0.1% drop in August. The decline in the cost of non-fuel industrial supplies and materials offset the rise in food, feed, and beverage prices, consumer goods, and automobiles. As a result, on an annual basis, import prices rose by 9.2% in September.

- CA: In August 2021, Canadian wholesale sales increased slightly by 0.3% from the previous month to 70.3 billion Canadian dollars, somewhat lower than the initial expected 0.5% increase. However, this is the first increase in wholesale sales after two consecutive declines. The marginal increase in sales concealed significant changes between departments. Sales of food, beverages, and tobacco; building materials and supplies; and miscellaneous products rose 2.9%, while total sales in other industries fell 2.1%. Wholesale sales increased by 7.3% year on year.

- CA: Preliminary estimates show that Canadian industrial product prices rose 1% month-on-month in September 2021, after falling 0.3% in the previous month. The increase in IPPI was mainly driven by increasing energy and petroleum product prices (3.3%), mainly due to refined petroleum (3.7%). In addition, due to the promotion of metal construction and building materials (5%), the price of chemicals and chemical products (2.9%) increased, namely petrochemical products (10.7%), motor vehicles and recreational vehicles (0.8%), and metal products (3.3%) ). The decline in the prices of timber and other wood products (down 2.5%), that is, softwood lumber (down 2.5%), slowed these increases. As a result, the index has risen by 15% from the upwardly revised 14.7% in August, according to preliminary estimates.

- EU: Italy’s trade surplus shrank from 3.929 billion euros in the same period last year to 1.316 billion euros in August 2021. Imports increased by 31.7% from the same period the previous year to 31.334 billion euros, driven by intermediate products (47.5%), capital products (16.5%), and consumer goods (9.8%), namely durable goods (35.1%). Inbound traffic from the EU increased by 25.1%, and inbound traffic from outside the EU increased by 39.9%. At the same time, driven by intermediate products (28.9%), capital products (11.8%), and consumer goods (9.9%), exports to the euro increased by 17.8% to 32.65 billion euros. Sales to EU countries increased by 19.9%, while sales to non-EU countries increased by 15.8%.

- EU: The Eurozone trade surplus has narrowed sharply from 14 billion euros in the same period last year to 4.8 billion euros in August 2021, which is far below market expectations of 16.1 billion euros, mainly due to a 26.6% surge in imports due to rising energy prices. The purchase of fuels and lubricants (84.4%), raw materials (65.4%), and finished products (17.2%), including chemicals, machinery, and transportation equipment, has increased significantly. Among the major trading partners, imports from Russia (107.1%), the United States (18.4%), Switzerland (20.3%), and China (27.8%) have increased, but imports from the United Kingdom (10.6%) have declined. At the same time, export growth slowed by 18.2%, and sales of fuels and lubricants (90.6%), raw materials (32.0%), and manufactured products (15.2%) also contributed to export growth. Exports to the United States and Turkey (20.8% each), Russia (11.5%), Switzerland (12.5%), and China (9.2%) have increased, but exports to the UK have declined (-0.4%).

- EU: In September 2021, EU passenger car registrations fell by 23.1% year-on-year to 71,859,800, the lowest level since September 1995. Before this, due to the continued shortage of semiconductors, there was an insufficient supply of cars, and car sales fell by 19.1% in August. For the third consecutive month, the largest auto markets saw double-digit declines: Italy (down 32.7%), Germany (down 25.7%), France (down 20.5%), and Spain (down 15.7%). In the first nine months of 2021, sales increased by 6.6% year-on-year to 7.5 million vehicles. The substantial increase earlier this year helped keep cumulative sales at a positive level.

- CN: The People's Bank of China (PBOC) injected funds into the financial system through medium-term loans while keeping interest rates unchanged for 18 consecutive months. The People's Bank of China stated that it would keep the interest rate of 500 billion yuan of one-year medium-term loans (MLF) issued to some financial institutions at 2.95% of the previous operation. The People's Bank of China also injected a seven-day reverse repo worth 10 billion yuan into the banking system, offsetting the short-term liquidity toolset on Friday.

- NZ: The New Zealand BusinessNZ Manufacturing Index rebounded from a downward revision of 39.7 points last month to 51.4 points in September 2021. New orders are almost back to "normal" with a reading of 54.3 in September, and the employment index is still well above the long-term average of 50.6, which is 54.4. However, the production index was 49.9, basically flat, and the inventory index was 50.1. The raw material delivery volume was 47.8, still shrinking, although the pace was not as good as August (33.1).

 

• LOOKING AHEAD:

Today, investors will receive:

- USD: FOMC Member Quarles Speaks, Industrial Production m/m, Capacity Utilization Rate, NAHB Housing Market Index, Federal Budget Balance, and TIC Long-Term Purchases.

- GBP: Rightmove HPI m/m, and MPC Member Cunliffe Speaks.

- CNY: GDP q/y, Retail Sales y/y, Fixed Asset Investment ytd/y, Industrial Production y/y, NBS Press Conference, and Unemployment Rate.

- CAD: Housing Starts, Foreign Securities Purchases, BOC Business Outlook Survey, and Gov Council Member Lane Speaks.

- NZD: CPI q/q.

 

• KEY EQUITY & BOND MARKET DRIVERS:

- Canada TSX rises to the highest level in the history of 20911.

- Australia's 10-year government bond yield hovered at around 1.7%, close to the six-month high of 1.775% hit on October 12, due to concerns about rising energy prices and supply bottlenecks leading to rising inflation and possible tightening of monetary policy by global central banks. The Federal Reserve and the Bank of England will gradually cut interest rates soon, while the Bank of New Zealand raised interest rates for the first time in seven years and said it might take further action. At the same time, the Reserve Bank of Australia may maintain interest rates at a record low level until at least 2024, reflecting the weakness of domestic wage growth and inflation over the years.

- The benchmark US 10-year Treasury bond yield rose to 1.56% on Friday, after economic data showed that US retail trade grew by 0.7% in September, easily surpassing market forecasts of 0.2%, indicating that despite rising inflation, consumer spending is strong. In addition, other data released earlier this week showed that consumer prices had risen sharply, producer and foreign trade costs have risen steadily, and the number of first-time jobless claims has fallen below 300,000 for the first time since March 2020. Nevertheless, as rising energy prices threaten the recovery of the global economy, the yield is still slightly lower than the high of 1.596% in the last four months.

- The benchmark Japanese 10-year Treasury bond yield fell to 0.08%, still close to the six-month high of 0.09% hit on October 11, tracking the trend of the 10-year US Treasury bond yield as investors weighed the slowdown in growth prospects and the Inflation worries linger. The Bank of Japan is expected to lower its economic growth forecast for this year because tight supply has hit Japanese exports, and rising import prices have affected the profit margins of high-quality producers. At the same time, a survey conducted by the Bank of Japan showed that in the three months ending in September, Japanese households’ inflation expectations for the next year have risen, and the economic outlook has also deteriorated.

- German benchmark bond yields fell below -0.15% after hitting -0.09%, the highest level since May, earlier this month. Investors worry about the slowdown in global economic growth, inflationary pressures, and increased expectations for the possible tightening of monetary policy. Traders now see that the European Central Bank will raise interest rates by ten basis points before the end of 2022. However, President Lagarde said she still expects supply shortages or energy price increases to be temporary to ease market concerns about inflation. Elsewhere, the Federal Reserve is expected to reduce its massive bond purchase program in November, and the Bank of England may raise interest rates as early as this year.

- The UK 10-year government bond yield fell below 1.1% at the end of the volatile week. It had previously reached 1.2%, the highest level since May 2019. Investors weighed concerns about slowing global growth, rising price pressures, and expectations that major central banks may soon tighten monetary policy. Bank of England official Michael Saunders said investors were right to bet that borrowing costs would grow faster. At the same time, Bank of England Governor Andrew Bailey warned that unless policymakers act, Otherwise, inflation will enter a "very destructive" period. On the other hand, policymaker Catherine Mann stated that she “can wait” before raising interest rates, while Silvana Tenreyro warned that in response to inflation, rising interest rates “will Self-defeating." Elsewhere, the Fed may begin to reduce its large-scale bond purchase program in November.

 

• STOCK MARKET SECTORS:

- High: Consumer Discretionary, Financials, Industrials.

- Low: Consumer Staples, Utilities, Communication Services.

 

• TOP CURRENCY & COMMODITIES MARKET DRIVERS:

- USD: On Friday, the US dollar index was slightly higher, around 94 points, but it will still break the 5-week winning streak as investors turn to trade risks. The latest data shows that retail sales unexpectedly rose in September, and inflation showed mixed signs. Since the beginning of September, the US dollar has been rebounding because the market expects that the Fed will tighten its monetary policy faster than previously expected with the economy improving and energy prices soaring. However, the Fed’s September meeting minutes confirmed that this year would gradually reduce the stimulus plan.

- RMB: In mid-October, the exchange rate of China’s offshore renminbi against the US dollar was 6.43, the highest level since September 15. Investors digested a batch of economic data and welcomed signs of easing US-China relations while waiting for the third-quarter GDP data to obtain More clues to the policy outlook. China’s trade data showed that imports and exports continued to grow steadily in September, while price data showed record growth in producer costs and slight increases in consumer prices. In other respects, the Sino-US negotiations seem to have made a “good start.” However, US Trade Representative Katherine Tai said that she plans to raise the issue of Beijing’s non-compliance with the first phase of the trade agreement in future discussions. In terms of policy, the People's Bank of China fully extended its maturing medium-term loans on Friday without injecting more cash into the financial system and adjusting interest rates.

- JPY: On Friday, the yen fell again by 0.45% to around US$114.1, hovering near a 3-year low and close to the resistance zone since May 2017. The increase in risk appetite boosted stocks, commodities, and commodity-related currencies and suppressed safe-haven assets. However, the yen fell more than the dollar because the Bank of Japan still firmly stated that it would not withdraw market stimulus measures. A member of the Bank of Japan’s board of directors said on Thursday that despite the optimistic outlook for the Japanese economy, the central bank will not reduce monetary easing for the time being because the country has not yet achieved its 2% inflation stabilization target.

- NZD: The New Zealand dollar rose 0.5% against the US dollar on Friday, and the transaction price was higher than the 3-week high of 0.70600. The market shifted to riskier assets, and the outlook for monetary policy became more apparent. In the past two days, investors have been buying riskier assets. As the US dollar and bond yields have fallen, commodity currencies such as the New Zealand dollar have risen. The Reserve Bank of New Zealand also took a tougher stance. Despite the pandemic, it raised interest rates last week. On Thursday, the outgoing deputy governor Geoff Bascand said that signs of wage growth and sustainable inflation support the normalization of monetary policy. At the same time, the Fed has almost confirmed that it will start cutting interest rates next month, but investors are still waiting for the opportunity to raise interest rates.

 

• CHART OF THE DAY:

The CAC40 index closed up 42 points on Friday, or 0.6%, to 6728 points, the highest level since September 6. Optimism about the excellent season dispelled concerns about rising inflation. Bank stocks rose on the back of rising government bond yields, namely Credit Agricole Bank rose 2.1%, BNP Paribas rose 2%, and Renault shares rose to the top, rising 3.5%. In terms of revenue, gaming operator Française des Jeux reported a 5.1% increase in revenue in the third quarter to 529 million euros and confirmed its outlook for 2021, emphasizing that it has achieved growth in all activities. In terms of data, France's annual inflation rate was revised to 2.2% in September, which shows that driven by service charges and energy prices, consumer prices have seen the most significant increase since October 2018. This week, major French stock indexes rose 2.6%.• France CAC40 index - D1, Resistance around ~ 6950, Support (consolidation) around ~ 6671 & 6173

• GLOBAL CAPITAL MARKETS OVERVIEW: Wall Street rebounded on Friday and profited this week as investors returned to economically sensitive cyclical stocks after more robust earnings reports and surprisingly optimistic news from retail trade data. US retail sales in September unexpectedly increased for the second consecutive month, indicating the resilience of consumers. At the same time, Goldman Sachs' earnings results broke expectations, and the earnings season continued. On Thursday, eight S&P 500 index stock companies led by financial giants Bank of America, Morgan Stanley, and Citigroup announced their quarterly results, and each of them exceeded expectations. The Dow Jones index rose 382.2 points, or 1.1%, to 35294.76 points; the S&P 500 index rose 0.8% to close at 4471.37 points, and the Nasdaq Composite index rose 0.5% to close at 14897.34 points. The three major stock indexes closed higher this week. The Toronto Stock Exchange's s&P/TSX composite index rose 0.5% on Friday to a record high of 20,928 points. After a strong US corporate earnings report stimulated optimism about the economy and continued increasing oil prices, the index rose 2.6% each week. . WTI crude oil closed this week at a new 7-year high above US$82 per barrel. Due to the surge in demand after the relaxation of travel restrictions related to the coronavirus, there may be a supply shortage in the coming months. In terms of data, Canadian wholesale sales experienced positive changes for the first time in three months. European stock markets continued their gains on Friday, marking their best week since March, after a solid start to the third-quarter earnings season, which prompted buying. On Thursday, the largest bank in the United States predicted that its quarterly performance would exceed the quarterly performance, and the banking industry was among them. Investors also welcomed the news: EU leaders will approve emergency measures next week to provide short-term relief to households and businesses in an unprecedented energy crisis. In terms of economic data, recent data show that European car registrations fell by 23.1% in September. In a single stock, German fashion retailer Hugo Boss rose 1%. The company raised its outlook for this year after its third-quarter earnings rebounded on the back of solid demand. The Frankfurt DAX index rose 2.5% this week to 15,587 points, the highest closing point since September 27 and the biggest weekly gain since March. On Friday, the FTSE MIB index rose 0.8% to 26,489 points, the highest point since August 11, continuing the 1.2% gain of the previous trading day. The solid quarterly earnings results had a positive impact on investor sentiment. Help quell the recent inflation panic. With oil prices reaching US$82 per barrel, the banking and energy sectors continued to boost the index. In contrast, the better-than-expected quarterly results of the US financial giants continued to affect the Italian stock market. The key stock index closed up 1.7% this week, the biggest gain in nine weeks. The FTSE 100 index rose 1.9% this week to a 20-month high of 7,234 points, the most significant increase since April. Driven by increasing banks and commodity-related stocks, traders are concerned about inflation and focused on solid earnings reports. Oil and metal prices continue to soar. Elsewhere, the United Kingdom and the European Union embarked on a new round of negotiations on the Northern Ireland issue. Previously, London called for large-scale reforms, while the Chinese financial regulators asked some significant banks to relax mortgages while worrying about the spread of China's Evergrande Group’s debt crisis. Loan approval. After Barclays and Bank of America raised their stock price targets among individual stocks, HSBC Holdings rose 1.9%. In comparison, Rio Tinto Group fell 1.4% on Friday after lowering its 2021 iron ore shipment forecast. The Chinese stock market closed higher on Friday but remained cautious amid economic slowdown concerns and expectations of policy easing. The Shanghai Composite Index edged up 0.4% to close at 3572 points, while the Shenzhen Composite Index rose 0.52% to close at 14416 points. . Investors speculate that under the risks of economic slowdown, policymakers may need to relax the economic environment while balancing the issue of continued inflation. Traders are currently waiting for China's third-quarter GDP growth data to be released on Monday to understand potential policy responses. The financial and information technology sectors and energy and coal stocks provided support to the market. The Nikkei 225 index rose 1.81% to close at 29069 points, while Topix rose 1.86% to close at 2024 points on Friday, ending a three-week decline and outperforming its peers in the Asia-Pacific region. Heavyweight technology stocks led Wall Street with strong corporate prospects and earnings expectations, driving a strong rebound. Tokyo Electron (Tokyo Electron) rose after 2.9%. Other notable volume gainers included robot manufacturers Fanuc (5.61%), Lasertec Corp (9.53%), Keyence (3.66%), and Sony Group (2.67%). At the same time, a Reuters article reported that the Bank of Japan may lower its growth forecast for this fiscal year on the grounds of tight supply and may lower its consumer inflation forecast as of March. The Standard & Poor's/ASX 200 Index rose 0.7% on Friday to close at 7362 points, the second consecutive week of gains, with extensive participation from different economic sectors. Energy, metals, and gold prices rose, and mining and energy stocks continued their gains from the previous trading day. Consumer-related travel and aviation stocks also boosted the market, as New South Wales has canceled home or hotel quarantine requirements for fully vaccinated travelers from November 1. Qantas shares rose 2% because international flights were restarted earlier than scheduled, reaching a land sale agreement. Other gainers were Webjet (4.05%), Flight Centre (3.77%), and Regional Express Holdings (6.12%). The NZX 50 index fell 36 points, or 0.28%, to close at 13011 on Friday. Before this, the index reversed its early gains of about 115 points and fell 0.57% this week under the influence of rising yields and the outbreak of the new crown pneumonia. The New Zealand government’s 10-year bond yield reached 2.195% last Friday. The last time it was touched was in March 2019. After tracking global yields, the country’s central bank showed greater performance despite the fight against COVID-19. The tendency to raise interest rates. On Friday, the government also reported 65 new community cases in Auckland, forcing the authorities to admit that the delta epidemic is growing faster than expected. In addition, energy stocks Meridian Energy (-1.33%) and Contact Energy (1.71%) dragged down the market after volume sales.   • REVIEWING ECONOMIC DATA: Looking at the last economic data: - US: Preliminary estimates show that the University of Michigan’s consumer confidence in the United States fell from 72.8 in September to 2021 in October, which was lower than the market’s forecast of 73.1. The indicator for measuring current conditions fell from 80.1 to 77.9, while the expected sub-index fell from 68.1 to 67.2. At the same time, inflation expectations for the next year rose from 4.6% to 4.8%, while the 5-year outlook fell from 3% to 2.8%. Delta variables, supply chain shortages, and declining labor force participation rates will continue to affect the pace of consumer spending until 2022. Another less obvious factor has contributed to the decline in optimism: people’s confidence in the government’s economic policies has fallen sharply in the past six months. - US: In August 2021, US manufacturers and trade inventories increased by 0.6% from the previous month, after rising by 0.6% in July, in line with market expectations. Wholesalers (1.2% in July and 0.6% in July), manufacturers (0.6% and 0.6% in July), and retailers (0.1% and 0.4% in July) all increased their inventories. Compared with the same period last year, corporate stockpiles rose by 7.4%. - US: In September 2021, US export prices rose slightly by 0.1% from the previous month, which was lower than the 0.4% increase in August and lower than market expectations of 0.6%. This is the 16th consecutive month that export prices have risen, although the rate is slowest. Non-agricultural export expenses increased 0.3% from a month ago because the rise in industrial supplies and materials and non-agricultural foods offset the decline in consumer product prices. In addition, the cost of agricultural products fell by 1.7%, following a 0.9% reduction in August, the most significant drop since August 2020. Soybean and corn prices have fallen sharply, enough to offset the impact of rising cotton, wheat, fruit, and vegetable prices. Compared with the same period last year, export prices rose by 16.3%, and in August, they rose by 16.8%. - US: In September 2021, the US Import Commodity Price Index rose 0.4%, rebounding from the 0.3% decline in August, while the market expected a 0.6% increase. The cost of imported fuel rose by 3.7%, after falling by 3.0% in the previous month, mainly driven by increasing oil and natural gas prices. At the same time, non-fuel import prices remained unchanged after a tiny 0.1% drop in August. The decline in the cost of non-fuel industrial supplies and materials offset the rise in food, feed, and beverage prices, consumer goods, and automobiles. As a result, on an annual basis, import prices rose by 9.2% in September. - CA: In August 2021, Canadian wholesale sales increased slightly by 0.3% from the previous month to 70.3 billion Canadian dollars, somewhat lower than the initial expected 0.5% increase. However, this is the first increase in wholesale sales after two consecutive declines. The marginal increase in sales concealed significant changes between departments. Sales of food, beverages, and tobacco; building materials and supplies; and miscellaneous products rose 2.9%, while total sales in other industries fell 2.1%. Wholesale sales increased by 7.3% year on year. - CA: Preliminary estimates show that Canadian industrial product prices rose 1% month-on-month in September 2021, after falling 0.3% in the previous month. The increase in IPPI was mainly driven by increasing energy and petroleum product prices (3.3%), mainly due to refined petroleum (3.7%). In addition, due to the promotion of metal construction and building materials (5%), the price of chemicals and chemical products (2.9%) increased, namely petrochemical products (10.7%), motor vehicles and recreational vehicles (0.8%), and metal products (3.3%) ). The decline in the prices of timber and other wood products (down 2.5%), that is, softwood lumber (down 2.5%), slowed these increases. As a result, the index has risen by 15% from the upwardly revised 14.7% in August, according to preliminary estimates. - EU: Italy’s trade surplus shrank from 3.929 billion euros in the same period last year to 1.316 billion euros in August 2021. Imports increased by 31.7% from the same period the previous year to 31.334 billion euros, driven by intermediate products (47.5%), capital products (16.5%), and consumer goods (9.8%), namely durable goods (35.1%). Inbound traffic from the EU increased by 25.1%, and inbound traffic from outside the EU increased by 39.9%. At the same time, driven by intermediate products (28.9%), capital products (11.8%), and consumer goods (9.9%), exports to the euro increased by 17.8% to 32.65 billion euros. Sales to EU countries increased by 19.9%, while sales to non-EU countries increased by 15.8%. - EU: The Eurozone trade surplus has narrowed sharply from 14 billion euros in the same period last year to 4.8 billion euros in August 2021, which is far below market expectations of 16.1 billion euros, mainly due to a 26.6% surge in imports due to rising energy prices. The purchase of fuels and lubricants (84.4%), raw materials (65.4%), and finished products (17.2%), including chemicals, machinery, and transportation equipment, has increased significantly. Among the major trading partners, imports from Russia (107.1%), the United States (18.4%), Switzerland (20.3%), and China (27.8%) have increased, but imports from the United Kingdom (10.6%) have declined. At the same time, export growth slowed by 18.2%, and sales of fuels and lubricants (90.6%), raw materials (32.0%), and manufactured products (15.2%) also contributed to export growth. Exports to the United States and Turkey (20.8% each), Russia (11.5%), Switzerland (12.5%), and China (9.2%) have increased, but exports to the UK have declined (-0.4%). - EU: In September 2021, EU passenger car registrations fell by 23.1% year-on-year to 71,859,800, the lowest level since September 1995. Before this, due to the continued shortage of semiconductors, there was an insufficient supply of cars, and car sales fell by 19.1% in August. For the third consecutive month, the largest auto markets saw double-digit declines: Italy (down 32.7%), Germany (down 25.7%), France (down 20.5%), and Spain (down 15.7%). In the first nine months of 2021, sales increased by 6.6% year-on-year to 7.5 million vehicles. The substantial increase earlier this year helped keep cumulative sales at a positive level. - CN: The People's Bank of China (PBOC) injected funds into the financial system through medium-term loans while keeping interest rates unchanged for 18 consecutive months. The People's Bank of China stated that it would keep the interest rate of 500 billion yuan of one-year medium-term loans (MLF) issued to some financial institutions at 2.95% of the previous operation. The People's Bank of China also injected a seven-day reverse repo worth 10 billion yuan into the banking system, offsetting the short-term liquidity toolset on Friday. - NZ: The New Zealand BusinessNZ Manufacturing Index rebounded from a downward revision of 39.7 points last month to 51.4 points in September 2021. New orders are almost back to "normal" with a reading of 54.3 in September, and the employment index is still well above the long-term average of 50.6, which is 54.4. However, the production index was 49.9, basically flat, and the inventory index was 50.1. The raw material delivery volume was 47.8, still shrinking, although the pace was not as good as August (33.1).   • LOOKING AHEAD: Today, investors will receive: - USD: FOMC Member Quarles Speaks, Industrial Production m/m, Capacity Utilization Rate, NAHB Housing Market Index, Federal Budget Balance, and TIC Long-Term Purchases. - GBP: Rightmove HPI m/m, and MPC Member Cunliffe Speaks. - CNY: GDP q/y, Retail Sales y/y, Fixed Asset Investment ytd/y, Industrial Production y/y, NBS Press Conference, and Unemployment Rate. - CAD: Housing Starts, Foreign Securities Purchases, BOC Business Outlook Survey, and Gov Council Member Lane Speaks. - NZD: CPI q/q.   • KEY EQUITY & BOND MARKET DRIVERS: - Canada TSX rises to the highest level in the history of 20911. - Australia's 10-year government bond yield hovered at around 1.7%, close to the six-month high of 1.775% hit on October 12, due to concerns about rising energy prices and supply bottlenecks leading to rising inflation and possible tightening of monetary policy by global central banks. The Federal Reserve and the Bank of England will gradually cut interest rates soon, while the Bank of New Zealand raised interest rates for the first time in seven years and said it might take further action. At the same time, the Reserve Bank of Australia may maintain interest rates at a record low level until at least 2024, reflecting the weakness of domestic wage growth and inflation over the years. - The benchmark US 10-year Treasury bond yield rose to 1.56% on Friday, after economic data showed that US retail trade grew by 0.7% in September, easily surpassing market forecasts of 0.2%, indicating that despite rising inflation, consumer spending is strong. In addition, other data released earlier this week showed that consumer prices had risen sharply, producer and foreign trade costs have risen steadily, and the number of first-time jobless claims has fallen below 300,000 for the first time since March 2020. Nevertheless, as rising energy prices threaten the recovery of the global economy, the yield is still slightly lower than the high of 1.596% in the last four months. - The benchmark Japanese 10-year Treasury bond yield fell to 0.08%, still close to the six-month high of 0.09% hit on October 11, tracking the trend of the 10-year US Treasury bond yield as investors weighed the slowdown in growth prospects and the Inflation worries linger. The Bank of Japan is expected to lower its economic growth forecast for this year because tight supply has hit Japanese exports, and rising import prices have affected the profit margins of high-quality producers. At the same time, a survey conducted by the Bank of Japan showed that in the three months ending in September, Japanese households’ inflation expectations for the next year have risen, and the economic outlook has also deteriorated. - German benchmark bond yields fell below -0.15% after hitting -0.09%, the highest level since May, earlier this month. Investors worry about the slowdown in global economic growth, inflationary pressures, and increased expectations for the possible tightening of monetary policy. Traders now see that the European Central Bank will raise interest rates by ten basis points before the end of 2022. However, President Lagarde said she still expects supply shortages or energy price increases to be temporary to ease market concerns about inflation. Elsewhere, the Federal Reserve is expected to reduce its massive bond purchase program in November, and the Bank of England may raise interest rates as early as this year. - The UK 10-year government bond yield fell below 1.1% at the end of the volatile week. It had previously reached 1.2%, the highest level since May 2019. Investors weighed concerns about slowing global growth, rising price pressures, and expectations that major central banks may soon tighten monetary policy. Bank of England official Michael Saunders said investors were right to bet that borrowing costs would grow faster. At the same time, Bank of England Governor Andrew Bailey warned that unless policymakers act, Otherwise, inflation will enter a "very destructive" period. On the other hand, policymaker Catherine Mann stated that she “can wait” before raising interest rates, while Silvana Tenreyro warned that in response to inflation, rising interest rates “will Self-defeating." Elsewhere, the Fed may begin to reduce its large-scale bond purchase program in November.   • STOCK MARKET SECTORS: - High: Consumer Discretionary, Financials, Industrials. - Low: Consumer Staples, Utilities, Communication Services.   • TOP CURRENCY & COMMODITIES MARKET DRIVERS: - USD: On Friday, the US dollar index was slightly higher, around 94 points, but it will still break the 5-week winning streak as investors turn to trade risks. The latest data shows that retail sales unexpectedly rose in September, and inflation showed mixed signs. Since the beginning of September, the US dollar has been rebounding because the market expects that the Fed will tighten its monetary policy faster than previously expected with the economy improving and energy prices soaring. However, the Fed’s September meeting minutes confirmed that this year would gradually reduce the stimulus plan. - RMB: In mid-October, the exchange rate of China’s offshore renminbi against the US dollar was 6.43, the highest level since September 15. Investors digested a batch of economic data and welcomed signs of easing US-China relations while waiting for the third-quarter GDP data to obtain More clues to the policy outlook. China’s trade data showed that imports and exports continued to grow steadily in September, while price data showed record growth in producer costs and slight increases in consumer prices. In other respects, the Sino-US negotiations seem to have made a “good start.” However, US Trade Representative Katherine Tai said that she plans to raise the issue of Beijing’s non-compliance with the first phase of the trade agreement in future discussions. In terms of policy, the People's Bank of China fully extended its maturing medium-term loans on Friday without injecting more cash into the financial system and adjusting interest rates. - JPY: On Friday, the yen fell again by 0.45% to around US$114.1, hovering near a 3-year low and close to the resistance zone since May 2017. The increase in risk appetite boosted stocks, commodities, and commodity-related currencies and suppressed safe-haven assets. However, the yen fell more than the dollar because the Bank of Japan still firmly stated that it would not withdraw market stimulus measures. A member of the Bank of Japan’s board of directors said on Thursday that despite the optimistic outlook for the Japanese economy, the central bank will not reduce monetary easing for the time being because the country has not yet achieved its 2% inflation stabilization target. - NZD: The New Zealand dollar rose 0.5% against the US dollar on Friday, and the transaction price was higher than the 3-week high of 0.70600. The market shifted to riskier assets, and the outlook for monetary policy became more apparent. In the past two days, investors have been buying riskier assets. As the US dollar and bond yields have fallen, commodity currencies such as the New Zealand dollar have risen. The Reserve Bank of New Zealand also took a tougher stance. Despite the pandemic, it raised interest rates last week. On Thursday, the outgoing deputy governor Geoff Bascand said that signs of wage growth and sustainable inflation support the normalization of monetary policy. At the same time, the Fed has almost confirmed that it will start cutting interest rates next month, but investors are still waiting for the opportunity to raise interest rates.   • CHART OF THE DAY: The CAC40 index closed up 42 points on Friday, or 0.6%, to 6728 points, the highest level since September 6. Optimism about the excellent season dispelled concerns about rising inflation. Bank stocks rose on the back of rising government bond yields, namely Credit Agricole Bank rose 2.1%, BNP Paribas rose 2%, and Renault shares rose to the top, rising 3.5%. In terms of revenue, gaming operator Française des Jeux reported a 5.1% increase in revenue in the third quarter to 529 million euros and confirmed its outlook for 2021, emphasizing that it has achieved growth in all activities. In terms of data, France's annual inflation rate was revised to 2.2% in September, which shows that driven by service charges and energy prices, consumer prices have seen the most significant increase since October 2018. This week, major French stock indexes rose 2.6%.• France CAC40 index - D1, Resistance around ~ 6950, Support (consolidation) around ~ 6671 & 6173