One month in review – September 2021


As economic data continued to influence, monetary policy, Evergrande, concerns over China and the threat of a US government shutdown weighed on riskier assets.

A surge in US Treasury yields at the end of the month led to a rally in the dollar as well as a sell off in tech stocks, adding strong downward pressure.

The month’s massive sales were severe enough that falling buyers sidelined and let the end of the quarter come to an end.


This was a mixed set of numbers for the markets in September. Consumer and business confidence weakened as COVID-19 continued to impact economic recovery.

Private sector activity also reflected slower growth, while inflationary pressures continued to soar.

Private sector PMI

Growth in the private sector slowed at the end of the 3rd quarter, according to preliminary figures, however.

The euro area composite PMI index fell from 59.0 to 56.1, with slower growth in the manufacturing and service sectors.

In September, the euro zone services PMI index fell from 59.0 to 56.3 and the manufacturing PMI index from 61.4 to 58.7.

Germany and France both recorded slower growth, with the German manufacturing PMI index falling from 62.6 to 58.5.

2sd Quarterly growth

Economic activity in the 2sd quarter, however, performed better than expected. Quarter over quarter, the euro area economy grew 2.2%, compared to a previous estimate of 2.0%.


In August, inflationary pressures increased again. The euro area’s annual inflation rate accelerated from 2.2% to 3.0%, exceeding the ECB’s 2% target.

Supply chain issues continued to drive prices up as commodity prices skyrocketed.

Business and consumer sentiment

Germany’s IFO Business Climate Index fell from 99.6 to 98.8 in September, while the Eurozone’s ZEW Economic Sentiment Index fell from 42.7 to 31.1 in September .

A recovery in German consumer confidence was hardly reassuring, despite the GfK consumer sentiment index falling from -1.40 to +0.30.

The United States

Economic data has also delivered mixed signals.

Labor market figures

Non-farm payrolls increased more modestly to 235,000 in September after jumping by 1,053,000 in August.

Weekly jobless claims were also disappointing. After dropping to a pandemic low of 310,000 earlier this month, claims returned to 362,000 during the week ending 24e September.

Consumption and consumer confidence

Retail sales impressed, however, despite weakening consumer confidence. In August, core retail sales jumped 1.8%, with retail sales up 0.7%. Consumer spending fell in July.

The very important CB survey on consumer confidence, however, raised some red flags. In September, the CB consumer confidence index fell from 115.2 to 109.3.

Service sector activity

While reflecting weaker growth, service sector activity remained resilient mid-term. The market’s preferred ISM non-manufacturing PMI fell from 64.1 to 61.7 in August.


Inflationary pressures, however, have not abated. In August, the annual core inflation rate fell from 4.3% to 4.0%. Although weaker, inflationary pressures remained high, supporting the need for political action by the Fed.

Monetary Policy

While the ECB continued to talk about transitory inflationary pressures, the FED presented a more hawkish view of its policy.

Markets were waiting for a definitive date when the Fed would start scaling back its asset purchase program.

Without committing to a date, the interest rate projections have highlighted a divided committee, with some committee members pointing to rate hikes as early as next year.

Sentiment towards the economy and labor market conditions, coupled with persistent inflation, supported the more hawkish outlook.

Market movers

For the DAX: September was a mixed month for the automotive sector. Continental tumbled 16.54% to lead the way, with Volkswagen sliding 3.05%. Bmw and Daimler however found support, increasing by 3.53% and 8.47% respectively.

It was a bullish month for the banks. German Bank and Commercial bank ended the month up 5.58% and 8.47% respectively.

From CAC, it was a mixed month for the banking sector. BNP Paribas and Gen Soc increased by 3.18% and 2.03% respectively. Agricultural credit however, reversed the trend, falling 2.13%.

It was a bearish month for the auto sector. Renault and Stellantis SA ended the month down 1.75% and 3.28% respectively.

Air France-KLM recovered by 7.30%, while Airbus SE fell 0.52%.


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