Details Cookies
Important margin product information

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money.

Cookie policy

This website uses cookies to offer you a better browsing experience by enabling, optimising and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy here and our privacy policy here

Market Quick Take - October 20, 2021 Market Quick Take - October 20, 2021 Market Quick Take - October 20, 2021

Market Quick Take - October 20, 2021

Macro 5 minutes to read
Saxo Be Invested
Saxo Strategy Team

Summary:  US equities managed their fifth straight positive session yesterday, which has taken the S&P 500 Index close to its all-time highs from early September. US treasury yields are making a splash again as the 10-year benchmark closed at a local high after a prior attempt higher was beaten back. Elsewhere, the renminbi was quiet after its largest strengthening move in nearly a year yesterday, while Chinese authorities moved against the spike in domestic coal prices.

What is our trading focus?

Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - US equities put in yet another strong day yesterday, taking the S&P500 to well within a percent of the all-time high posted back in early September near 4,539, the last resistance remaining. The Nasdaq 100 index has a bit more wood to chop to get back to the all-time highs some 2% higher from yesterday’s close near 15,400 and we have a bit more tension for the yield-sensitive megacap-heavy index as long US treasury yields have picked back up to new local highs at the 10-year portion of the US yield curve at least (more below), even as the 30-year yield remains below cycle lows.

USDCNH – yesterday's chunky US dollar move was clearly inspired by a sudden move lower in USDCNH, which moved nearly a full percent lower, the largest drop in nearly a year and not clearly inspired by any identifiable trigger. Given that the lows for the cycle just above 6.35 are suddenly looming into view after this move that took the pair below 6.38 yesterday, USD traders will watch this pair closely for further developments and as a coincident indicator for the status of the USD, which has struggled to new local lows versus pro-cyclical currencies for more than a week, even as the EURUSD trend resistance remains intact and USDJPY is pushing at multi-year highs.

EURUSD – the most important of USD pairs backed up into that key 1.1650-1.1700 zone yesterday, with the timing of the move clearly triggered by the significant drop in USDCNH during the Asian session yesterday (See above). US 10-year treasury yields suddenly poking back to cycle highs yesterday inject a bit of relative fundamental US dollar support, but whether it is enough to stave off a reversal in the pair looks critical here going into the rest of the week, as the USD is on the defensive elsewhere.

Netflix (NFLX) - beat estimates for Q3 subscriber growth as it added 4.38 million subscribers versus projections of 3.7 million and estimated that it could add 8.5 million more subscribers in the coming quarter, slightly stronger than the consensus expectations. The company reported after the close after closing modestly higher yesterday.

Copper – after poking close to record all-time highs this week, copper prices eased sharply yesterday to below 465 cents/pound in the US. A Bloomberg article says that commodity trader Trafigura played a prominent role in draining London’s copper inventories to their lowest levels since 1974, aggravating the price rise on the impression of short supply. The resulting swings in prices have the LME now changing its rules and is launching an inquiry into what happened. Separately, China is thought to become a net copper exporter as domestic demand is shriveling on the decline in demand from the construction sector after recent policy moves that have put pressure on developers and are seen as slowing activity in the sector for some time.

US Treasuries (IEF, TLT). Yields will quickly take the spotlight from here if the rise yesterday in the 10-year portion of the yield curve and longer picks up pace from here, as yields snapped to new local highs for the cycle at the 10-year portion of the US yield curve above 1.63% and the curve overall steepened, a change of direction from recent flattening that suggested growing growth worries. An auction of 20-year treasuries is on tap for later today.

What is going on?

China warns on coal price, sending most active coal futures contract tumbling 8.5%. Chinese authorities verbally intervened in the market after coal prices on the Zhengzhou futures exchange had more than doubled for the spot contract just since August - when prices were already very elevated relative to the range of recent years. Authorities vowed to increase production and expressed zero tolerance for hoarding, collusion or spreading false information.

Hungary hikes by modest 15 basis points to take rate to 1.8% – after surprising markets at the previous meeting with a mere 15 basis point rate hike (versus 30 bps expected) that saw the Hungarian forint weakening sharply, the Hungarian central bank met expectations and once again hiked by this small increment with the same result – a weaker HUF weaker, as EURHUF traded above resistance since earlier this year around 362. The central bank chief Virag said in the wake of the decision that “the fight against inflation is similar to long-distance running, not to a sprint”, but it looks like the central bank will need to hike more and more quickly to slow the HUF’s descent.

UK Sep. CPI slightly lower than expected – Out just this morning, the headling CPI was out at +0.3% MoM and +3.1% YoY, both 0.1% below expectedand versus +3.2% YoY in August. The core CPI, meanwhile was out at +2.9% YoY vs. 3.0% expected and 3.1% in August. Before the data release, the market had priced about 80% odds that the Bank of England is set to initiate a tightening cycle with a 25 basis point hike at its meeting on November 4 and is fully priced to move rates twice more before mid-year next year.

What are we watching next?

US 20-year treasury auction up at 1700 - comes at an interesting time after yesterday’s modest yield curve steepening that represented a direction change and after yields at the 10-year portion of the curve rose to a new local high above 1.63%.

US Fed Beige Book - is a release to watch today for anecdotal reporting from the various regions of the US economy on the pace of economic activity and the outlook from here, especially for demand relative to the available supply of labor and parts, as well as the status of supply chains and logistics.

Earnings Watch – the big names up today include Netherlands’ semiconductor lithography equipment maker ASML, which surprised negatively this morning and issued a weak forecast for Q4 even as it continues to grow – with the weakness down to supply chain issues that seem nearly universal for all companies involved in the physical world. Also up is Tesla, a noted “bubble stock” which has managed to climb all the way back to within a few percent of its all-time highs near 900 ahead of its earnings report after the close today. Special focus there on how the semiconductor shortage is affecting its outlook.

Wednesday: Tesla, Verizon, IBM, ASML, Lam Research, Biogen, Canadian Pacific Railway

Thursday: Barclays, AT&T, Intel, Union Pacific, Snap, Whirlpool, American Airlines, Southwest Airlines, Freeport-McMoRan, Nucor, Genuine Parts, Tractor Supply

Friday: Honeywell, American Express, Schlumberger

Economic calendar highlights for today (times GMT)

  • 0700 – ECB's Villeroy to speak
  • 0720 – ECB's Elderson to speak
  • 1230 – Canada Sep. Teranet/National Bank Home Price Index
  • 1230 – Canada Sep. CPI
  • 1340 – ECB's Holzmann to speak
  • 1430 – US Weekly DoE crude oil & product inventories
  • 1500 – ECB's Villeroy to speak
  • 1700 – US Fed’s Quarles (voter) to speak
  • 1800 – US Fed Beige Book
  • 0030 – Australia Q3 NAB Business Confidence

Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:

Apple Sportify Soundcloud Stitcher


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (
Full disclaimer (

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.