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HomeEconomyMarket Talk – August 1, 2022

Market Talk – August 1, 2022


ASIA:

China’s manufacturing PMI fell to 50.4 in July from 51.7 the previous month, according to media reports on August 1. That was below market analysts’ expectations of 51.5 for July, but above the 50-point index that separates growth from decline, they added. . Market analysts said the decline was a result of weakening economic activity in various industries in China and remained cautious about a recovery in Chinese demand.

India’s federal fiscal deficit widened to a lower-than-expected 3.5 trillion rupees ($44.17 billion) in the three months to June, helped by lower subsidy spending and higher tax collections, government data showed on Friday. Tax collections rose, partly due to higher inflation, which helped the government collect more from the Goods and Services Tax (GST), as well as higher corporate tax revenue from improved economic activity. In May, the government cut taxes on petrol and diesel and cooking gas to provide relief to consumers following a sharp rise in global oil prices.

India launched its first international bullion exchange on Friday as the world’s second-largest consumer of precious metals seeks to bring transparency to the precious metals market. The India International Bullion Exchange (IIBX), based in Gujarat International Finance Tec-City or GIFT City in the western state of Gujarat, could lead to a standard gold price in India and facilitate trading for small bullion traders and jewelers. Gold is strictly regulated in India and currently only nominated banks and agencies approved by the central bank can import and sell gold to traders and jewelers. Multicommodity Exchange (MCX) and National Commodity and Derivatives Exchange (NCDEX) offer gold futures contracts in India, but there was no physical exchange to buy gold.

 

The major Asian stock markets had a green day today:

 

  • NIKKEI 225 increased 191.71 points or 0.69% to 27,993.35

 

  • Shanghai increased 6.72 points or 0.21% to 3,259.96

 

  • Hang Seng increased 9.33 points or 0.05% to 20,165.84

 

  • ASX 200 increased 47.80 points or 0.69% to 6,993.00

 

  • Kospi increased 0.75 points or 0.03% to 2,452.25

 

  • SENSEX increased 545.25 points or 0.95% to 58,115.50

 

  • Nifty50 increased 181.80 points or 1.06% to 17,340.05

 

The major Asian currency markets had a mixed day today:

 

  • AUDUSD increased 0.00533 or 0.76% to 0.70226

 

  • NZDUSD increased 0.00422 or 0.67% to 0.63302

 

  • USDJPY decreased 1.272 or -0.95% to 131.942

 

  • USDCNY increased 0.03014 or 0.45% to 6.78044

 

Precious Metals:

 

l Gold increased 3.41 USD/t oz. or 0.19% to 1,765.51

 

l Silver decreased 0.018 USD/t. oz or -0.09% to 20.275

 

Some economic news from last night:

 

China:

 

Caixin Manufacturing PMI (Jul) decreased from 51.7 to 50.4

 

Japan:

 

Manufacturing PMI (Jul) decreased from 52.7 to52.1

 

South Korea:

 

Exports (YoY) (Jul) increased from 5.2% to 9.4%

 

Imports (YoY) (Jul) increased from 19.4% to 21.8%

 

Trade Balance (Jul) decreased from -2.58B to -4.67B

 

Nikkei Manufacturing PMI (Jul) decreased from 51.3 to 49.8

 

Australia:

 

AIG Manufacturing Index (Jul) decreased from 54.0 to 52.5

 

Manufacturing PMI increased from 55.7 to 56.2

 

MI Inflation Gauge (MoM) increased from 0.3% to 1.2%

 

ANZ Job Advertisements (MoM) decreased from 0.4% to -1.1%

 

South Korea:

 

Building Consents (MoM) (Jun) decreased from -0.5% to -3.0%

 

Some economic news from today:

 

India:

 

Nikkei S&P Global Manufacturing PMI (Jul) increased from 53.9 to 56.4

 

Hong Kong:

 

GDP (YoY) (Q2) increased from -3.9% to -1.4%

 

GDP (QoQ) (Q2) increased from -2.9% to 0.9%

 

EUROPE/EMEA:

British business leaders are scaling back investment plans as soaring prices, Brexit trade difficulties, and political uncertainty make them pessimistic about the economic outlook. Many firms are now planning to cut investment to increase it, according to the Institute of Directors’ latest survey of business chiefs. That’s the weakest reading since October 2020 as jittery firms cut spending. The IoD’s economic confidence index, which measures business leaders’ view of the UK’s economic outlook, remained very low at -54 in July, up only slightly from June’s -60. Sixty-nine percent of bosses were either very or quite pessimistic about the UK economy, while only 15% were optimistic about the outlook.

Germany’s economic growth stalled in the second quarter of this year, disappointing expectations of a modest expansion, according to data released by the German statistics office on Friday. After growing by 0.8 percent in the first quarter of the year, Europe’s largest economy stagnated. Meanwhile, Spain’s economy grew by 1.1 percent in the quarter, its statistics office said this morning. The first second-quarter growth estimate for the wider eurozone is due to be published at 11:00 CET.

 

The major Europe stock markets had a negative day:

 

l CAC 40 decreased 11.64 points or -0.18% to 6,436.86

 

l FTSE 100 decreased 10.01 points or -0.13% to 7,413.42

 

l DAX 30 decreased 4.42 points or -0.03% to 13,479.63

 

The major Europe currency markets had a mixed day today:

 

  • EURUSD increased 0.00254 or 0.25% to 1.02519

 

  • GBPUSD increased 0.00891 or 0.73% to 1.22499

 

  • USDCHF decreased 0.00027 or -0.03% to 0.95113

 

Some economic news from Europe today:

 

Germany:

 

German Retail Sales (YoY) (Jun) decreased from 1.1% to -8.8%

 

German Retail Sales (MoM) (Jun) decreased from 1.2% to -1.6%

 

German Manufacturing PMI (Jul) decreased from 52.0 to 49.3

 

Spain:

 

Spanish Manufacturing PMI (Jul) decreased from 52.6 to 48.7

 

Italy:

 

Italian Manufacturing PMI (Jul) decreased from 50.9 to 48.5

 

Italian Monthly Unemployment Rate (Jun) decreased from 8.2% to 8.1%

 

France:

 

French Manufacturing PMI (Jul) decreased from 49.6 to 49.5

 

UK:

 

Manufacturing PMI (Jul) decreased from 52.8 to 52.1

 

Euro Zone:

 

Manufacturing PMI (Jul) decreased from 52.1 to 49.8

 

Unemployment Rate (Jun) remain the same at 6.6%

US/AMERICAS:

The housing market in the US is beginning to cool, but still remains inflated. Black Knight mortgage software found that the annual rate of prices fell from 17.3% to 19.3%, marking a 2% decline. Black Knight found that a rise in available homes helped prices slightly decline with supply rising 22% over the past two months. Inventory remains depleted, however, with 54% less availability compared to 2019.

The Canadian economy remained stagnant in May after producing a slight 0.3% gain in April. Statistics Canada stated that construction and manufacturing experienced the largest losses, and noted the Ontario working strike in May that caused project delays. This is the first time manufacturing contracted in the past eight months. Transportation saw strong gains after rising 14.1%, with travel restrictions slightly relaxed. The agency now predicts Q2 GDP will reach 4.6%.

US Market Closings:

  • Dow declined 46.73 points or -0.14% to 32,7984
  • S&P 500 declined 11.66 points or -0.28% to 4,118.63
  • Nasdaq declined 21.71 points or -0.18% to 12,368.98
  • Russell 2000 declined 1.92 points or -0.1% to 1,883.31

 

 

Canada Market Closings:

  • TSX Composite advanced 236.21 points or 1.21% to 19,692.92
  • TSX 60 advanced 12.62 points or 1.07% to 1,187.97

 

Brazil Market Closing:

  • Bovespa declined 939.61 points or -0.91% to 102,225.08

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ENERGY:

 

The oil markets had a mixed day today:

 

  • Crude Oil decreased 4.83 USD/BBL or -4.90% to 93.870

 

  • Brent decreased 4.03 USD/BBL or -3.88% to 100.128

 

  • Natural gas increased 0.03 USD/MMBtu or 0.36% to 8.2757

 

  • Gasoline decreased 0.1172 USD/GAL or -3.76% to 2.9979

 

  • Heating oil decreased 0.1117 USD/GAL or -3.15% to 3.4353

 

The above data was collected around 14:39 EST on Monday

 

l Top commodity gainers: Lumber (1.69%), Potatoes(7.56%), Palladium (3.19%) and Zinc (1.51%)

 

l Top commodity losers: Palm Oil (-5.34%), Crude Oil (-4.90%), Brent (-3.88%) and Gasoline (-3.76%)

 

The above data was collected around 14:45 EST on Monday.

 

BONDS:

 

Japan 0.185%(+1bp), US 2’s 2.92% (+0.020%), US 10’s 2.6109% (-3.11bps); US 30’s 2.93% (-0.044%), Bunds 0.7610% (-6.4bp), France 1.3460% (-3.9bp), Italy 2.986% (-16.2bp), Turkey 17.00% (-15bp), Greece 2.918% (-7.8bp), Portugal 1.787% (-7bp); Spain 1.895% (-3.1bp) and UK Gilts 1.8080% (-5.4bp).

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