Global markets start week jittery

Rising energy prices, escalating inflation concerns, and Chinese growth data affect markets negatively

Murat Aslan   | 18.10.2021
Global markets start week jittery


Global markets started the week on a negative note on Monday as China's third-quarter growth data fell short of expectations, commodity prices continued to rise, and inflationary concerns grew.

While the Chinese economy increased by 4.9% in the third quarter, falling short of expectations, the slowdown was primarily due to a slowdown in the housing sector and an energy supply shortage.

Commodity prices have continued to rise due to inflation fears, which have been compounded by supply chain issues.

Copper's pound price, which last week broke a weekly closing record of $4.72 by rising 12%, started the new week with an increase of 1.6%.

Brent oil rose to $85.2 per barrel on Monday, continuing an eight-week upward trend, with a 1% gain in Asian markets.

While the dollar index was at 94.1 levels with an increase of 0.2%, the US 10-year bond yield rose to 1.61% with the increasing risk factors.

On the European side, different inflation assessments of the European Central Bank (ECB) President Christine Lagarde and the Bank of England (BoE) President Andrew Bailey drew attention last week.

In his statements over the weekend, ECB Chairman Lagarde said inflation is temporary and the ECB will maintain its supportive monetary policy stance, while BoE Chairman Bailey said they can "take action if necessary to prevent inflation pressures."

On the other hand, natural gas prices, which have been on the agenda of Europe for a while, and possible delays in goods trade due to supply chain problems, continue to fuel inflation concerns in Europe.

While the Chinese influence is prominent in Asian stock markets, a mixed outlook is striking in the announced macroeconomic data.

Accordingly, retail sales rose by 4.4% year-on-year, far surpassing expectations, while industrial production fell by 3.1%, below market forecasts.

Yi Gang, the chairman of the People's Bank of China (PBoC), stated they can cope with the economic risks posed by real estate companies in China, while the relaxation in credit channels for the housing sector in the country draws attention.

Later on Monday, the statements of the FED officials will be followed along with the industrial production and capacity utilization data in the US.

* Writing by Aysu Bicer

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