Rising commodity prices could hurt the Japanese economy - 12.10.2021

On Monday, the US dollar index rose, but was unable to renew a new high. This was mainly due to the weakening of the Japanese yen against the background of the publication of several negative economic indicators at once. USDJPY has renewed a 3-year high and rather confidently surpassed the psychological level of 113. Last week, Household Spending fell in Japan, and yesterday - Machine Tool Orders. Today's Japan 30-Year Bond (JGB) auction was not very successful. Their yield continued to grow, approached the February maximum and amounted to 0.71% per annum. The Corporate Goods Price Index for September was released in Japan this morning. It amounted to + 6.3% in annual terms, which is the highest since September 2008 (for 13 years). Rising world prices for energy and raw materials could hurt the Japanese economy and weaken the yen. In turn, it contributed to yesterday's strengthening of the currencies of the countries - exporters of raw materials: Australia, New Zealand and Canada.

US stocks dropped yesterday went down in value because of low activity due to the Columbus Day holiday and the weekend in the bond market. JPMorgan Chase was down 2.1% ahead of its quarterly earnings on Wednesday. Probably, some investors decided to fix their profits, since the bank's quotes have grown by almost 40% since the beginning of this year. Shares of payment systems Visa and Mastercard on Monday fell by more than 2% amid strong growth in the cryptocurrency market and an increase in bitcoin quotes by 40% over the past 3 weeks. Because of all this, the S&P financial index fell 1% yesterday. The S&P communication services index fell 1.5% amid a 1.3% drop in Amazon.com quotes. The online store allowed some of its employees to work from home. Southwest Airlines shares plummeted 4.2% as some flights were canceled amid poor weather and staff shortages. Today in the United States is not expected to publish significant economic statistics, but there will be speeches by two representatives of the Fed.

Today, world oil prices continue to rise for the 4th day in a row, but they still pulled back from yesterday's highs. This was facilitated by a correction in the natural gas market in Europe after Russian statements about a possible increase in supplies. In addition, the European Commission is considering various options for joint action by the governments of the EU countries for the joint purchase and storage of natural gas. From the maximum on October 6, $ 1924 per thousand cubic meters, gas prices in Europe fell to $ 995.5 per thousand cubic meters. The NATGAS quotes dropped from their maximum by 16%. Citigroup Bank raised its forecast for the price of Brent in the 4th quarter to $ 85 per barrel. The dynamics of oil prices may be affected by economic data in China, which will be released on Thursday October 14: inflation and lending in yuan. China is the largest oil importer in the world.