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Market Talk – June 23, 2022


ASIA:

Chinese President Xi Jinping made a rare statement Wednesday about his country’s aims to achieve its economic goals for the year. Investment analysts have cut their forecasts for China’s GDP growth to well below the official target after stringent Covid controls restricted business activity in the last few months. The median GDP forecast among investment banks tracked by CNBC is far lower, at 3.4%. Bank of America became the latest to cut earlier this week, while Nomura has the lowest forecast of 3.3%. Goldman Sachs is the only major investment bank with a forecast of 4% or slightly higher.

India’s current account deficit narrowed in the three months from January to March, mainly on the back of a moderation in the trade gap and a lower net outflow of primary income, the Reserve Bank of India said on Wednesday. The current account deficit stood at $13.4 billion or 1.5% of GDP in the fourth quarter of fiscal year 2021/22, compared with $22.2 billion or 2.6% of GDP in the preceding October-December quarter. The deficit had stood at $8.1 billion in the same quarter a year ago, the release showed. Net foreign direct investment inflows stood at $38.6 billion in FY22, lower than $44 billion in FY21.

The major Asian stock markets had a mixed day today:

 

  • NIKKEI 225 increased 21.70 points or 0.08% to 26,171.25

 

  • Shanghai increased 52.95 points or 1.62% to 3,320.15

 

  • Hang Seng increased 265.53 points or 1.26% to 21,273.87

 

  • ASX 200 increased 19.90 points or 0.31% to 6,528.40

 

  • Kospi decreased 28.49 points or -1.22% to 2,314.32

 

  • SENSEX increased 443.19 points or 0.86% to 52,265.72

 

  • Nifty50 increased 143.35 points or 0.93% to 15,556.65

 

The major Asian currency markets had a mixed day today:

 

  • AUDUSD decreased 0.00218 or -0.32% to 0.68866

 

  • NZDUSD increased 0.0005 or 0.08% to 0.62767

 

  • USDJPY decreased 1.14 or -0.84% to 134.774

 

  • USDCNY decreased 0.0093 or -0.14% to 6.70250

 

Precious Metals:

 

l Gold decreased 4.93 USD/t oz. or -0.27% to 1,832.46

 

l Silver decreased 0.179 USD/t. oz or -0.83% to 21.213

 

Some economic news from last night:

 

Australia:

 

Manufacturing PMI increased from 55.7 to 55.8

 

Services PMI decreased from 53.2 to 52.6

 

Japan:

 

Foreign Bonds Buying increased from -862.7B to -496.7B

 

Foreign Investments in Japanese Stocks decreased from 205.2B to -942.5B

 

Manufacturing PMI (Jun) decreased from 53.3 to 52.7

 

Services PMI increased from 52.6 to 54.2

 

South Korea:

 

PPI (YoY) (May) remain the same at 9.7%

 

PPI (MoM) (May) decreased from 1.6% to 0.5%

 

India:

 

Current Account % of GDP (YoY) decreased from 0.90% to -1.20%

 

Some economic news from today:

 

Singapore:

 

CPI (YoY) (May) increased from 5.4% to 5.6%

 

EUROPE/EMEA:

Britain’s economy is showing signs of stalling as high inflation hits new orders and businesses report levels of concern that normally herald a recession, a closely watched industry survey showed on Thursday. S&P Global’s Purchasing Managers’ Index (PMI), covering services and manufacturing firms, also showed companies raising pay and passing higher costs on to clients, a worry for the Bank of England. The PMI’s preliminary composite index held at 53.1 in June, above the median forecast of 52.6 in a Reuters poll of economists and unchanged from May.

European Central Bank president Christine Lagarde argued for regulation of crypto activities including staking and lending, in remarks before the European Parliament this week. Speaking as chair of the European Systemic Risk Board (ESRB), Lagarde stated that crypto-assets are “narrowly-defined” under proposed regulation and that future legislation “should regulate the activities of crypto-asset staking and lending, which are definitely increasing.” Her statements follow a tumultuous period for crypto markets in which crypto lending platform Celsius announced that it would pause withdrawals for its users, prompting a series of investigations from U.S. state securities regulators. Days later, another crypto lending platform, Babel Finance, also paused withdrawals, citing “liquidity pressures.”

The major Europe stock markets had a negative day:

 

l CAC 40 decreased 33.30 points or -0.56% to 5,883.33

 

l FTSE 100 decreased 68.77 points or -0.97% to 7,020.45

 

l DAX 30 decreased 231.69 points or -1.76% to 12,912.59

 

The major Europe currency markets had a negative day today:

 

  • EURUSD decreased 0.00569 or -0.54% to 1.05082

 

  • GBPUSD decreased 0.00175 or -0.14% to 1.22333

 

  • USDCHF decreased 0.00142 or -0.15% to 0.95998

 

Some economic news from Europe today:

 

UK:

 

Public Sector Net Borrowing (May) decreased from 21.13B to 13.23B

 

Public Sector Net Cash Requirement (May) increased from 2.287B to 12.024B

 

Composite PMI (Jun) increased from 51.8 to 53.1

 

Manufacturing PMI (Jun) decreased from 54.6 to 53.4

 

Services PMI (Jun) remain the same at 53.4

 

CBI Distributive Trades Survey (Jun) decreased from -1 to -5

 

France:

 

French Business Survey (Jun) increased from 106 to 108

 

French Manufacturing PMI (Jun) decreased from 54.6 to 51.0

 

French Markit Composite PMI (Jun) decreased from 57.0 to 52.8

 

French Services PMI (Jun) decreased from 58.3 to 54.4

 

Germany:

 

German Composite PMI (Jun) decreased from 53.7 to 51.3

 

German Manufacturing PMI (Jun) decreased from 54.8 to 52.0

 

German Services PMI (Jun) decreased from 55.0 to 52.4

 

Euro Zone:

 

Manufacturing PMI (Jun) decreased from 54.6 to 52.0

 

Markit Composite PMI (Jun) decreased from 54.8 to 51.9

 

Services PMI (Jun) decreased from 56.1 to 52.8

US/AMERICAS:

Initial unemployment claims fell last week by 2,000 to a seasonally adjusted figure of 229,000, according to the Labor Department. The US workforce is tight with 11.4 million job openings available at the end of April, marking two vacant positions for every unemployed person.

Inflation in Canada soared 7.7% in May — the fastest pace since 1983. The figure surpassed April’s reading of 6.8% and predictions of a 7.4% uptick. After raising rates by 50 basis points, the Bank of Canada is now ready to act more aggressively to tame prices. Some believe they may follow in the footsteps of the Federal Reserve by implementing a 75 basis point hike at their next meeting on July 13.

US Market Closings:

  • Dow advanced 194.23 points or 0.64% to 30,677.36
  • S&P 500 advanced 35.84 points or 0.95% to 3,795.73
  • Nasdaq declined 179.11 points or 1.62% to 11,232.19
  • Russell 2000 advanced 21.4 points or 1.27% to 1,711.67

 

Canada Market Closings:

  • TSX Composite declined 286.92 points or -1.51% to 18,717.12
  • TSX 60 declined 16.43 points or -1.42% to 1,138.99

 

Brazil Market Closing:

  • Bovespa declined 1,441.98 points or -1.45% to 98,080.34

 

ENERGY:

 

The oil markets had a negative day today:

 

l Crude Oil decreased 1.99 USD/BBL or -1.87% to 104.200

 

l Brent decreased 1.88 USD/BBL or -1.68% to 109.86

 

l Natural gas decreased 0.622 USD/MMBtu or -9.07% to 6.2360

 

l Gasoline decreased 0.1113 USD/GAL or -2.90% to 3.7228

 

l Heating oil decreased 0.1161 USD/GAL or -2.64% to 4.2885

 

The above data was collected around 12:40 EST on Thursday

 

l Top commodity gainers: Palm Oil (5.45%), Bitumen (1.34%), Rhodium (2.21%) and Coal (0.77%)

 

l Top commodity losers: Canola (-7.07%), Oat (-4.91%), Copper (-5.18%) and Natural Gas (-9.07%)

 

The above data was collected around 12:48 EST on Thursday.

 

BONDS:

 

Japan 0.235%(-0.3bp), US 2’s 2.95% (-0.115%), US 10’s 3.0349% (-12.5bps); US 30’s 3.16% (-0.084%), Bunds 1.419% (-20.1bp), France 1.9610% (-20.3bp), Italy 3.516% (-12.6bp), Turkey 18.97% (+10bp), Greece 3.769% (-9.9bp), Portugal 2.512% (-16.3bp); Spain 2.524% (-17bp) and UK Gilts 2.2980% (-19.9bp).

 

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