FISG Daily Market Wrap 21th September

Global Stocks Rise as US-China Talks Boost Risk Appetite While Oil Falls

Global stocks advanced as positive signals from US-China talks supported risk appetite ahead of a meeting between Presidents Donald Trump and Xi Jinping later this week. US Treasury Secretary Scott Bessent described the preliminary discussions as “very successful,” with trade and artificial intelligence among the issues discussed. Asian equities gained 0.8%, putting MSCI’s global stock index on course for a third consecutive advance. US futures also moved higher, with S&P 500 contracts up 0.4% and Nasdaq 100 futures gaining 0.6%, while European stocks were set for a firmer open. Oil extended its decline, with Brent falling 2.2% to around $101.65 a barrel and heading for its longest losing streak since June. Lower energy prices helped ease inflation concerns and supported bond futures after recent pressure from expectations of further Federal Reserve rate hikes. The Persian Gulf remained in focus as oil and LNG shipments through the Strait of Hormuz reached their highest level in six months, suggesting recent protection and mine-clearance efforts are helping regional energy flows recover. However, shipping data showed that 12 vessels passed through the Strait of Hormuz over the weekend, down from 35 the previous week. The yen steadied around 157 per dollar as Japan began a three-day holiday, with thin liquidity raising concerns about sharper currency moves. Gold edged lower to around $4,360 an ounce, while Australian and New Zealand government bonds followed Friday’s decline in Treasuries. Expectations for additional Fed tightening continued to pressure longer-dated debt, with the US 10-year yield ending Friday just below 5%. Geopolitical risks remained elevated. Iran’s IRGC said there was still room for geographical expansion of the war, while Russia’s Defence Ministry said Russian forces had struck a cargo ship in Ukraine’s Odesa port and were also targeting logistics centres, warehouses and Ukrainian ports, according to TASS. In Asia, New Zealand defence forces said two naval vessels crossed the Taiwan Strait. Meanwhile, the US and China continued discussions on artificial intelligence issues, with Bessent saying the US had suggested establishing a notification system between the two countries. In financial-sector developments, the Federal Reserve and Bank of England are intensifying their review of risks to banks from trading firms following losses at Jane Street, according to the Financial Times. FISG Daily Market Wrap provides a concise view of the forces moving global markets, helping investors stay informed and better prepared for what comes next.