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HomeEconomyMarket Talk – August 4, 2022

Market Talk – August 4, 2022


ASIA:

Growth in India’s dominant services sector slowed sharply in July, weighed down by high inflationary pressures and weaker demand, leading to a further decline in business expectations, a private survey showed. The S&P Global India Services purchasing managers’ index fell to 55.5 in July from 59.2 in June, the lowest since March and below expectations in a Reuters poll of 58.5. But the index has been above the 50-mark that separates growth from decline for a year, and July’s data was higher than the long-term average. Like many other countries, Asia’s third-largest economy is grappling with soaring inflation – at a near-decade high – exacerbated by rising commodity prices. A weaker rupee further increased imported inflation. The Reserve Bank of India (RBI) began its tightening cycle in May, later than most of its peers, but is expected to initiate subsequent hikes to fight inflation.

The major Asian stock markets had a mixed day today:

 

  • NIKKEI 225 increased 190.30 points or 0.69% to 27,932.20

 

  • Shanghai increased 25.37 points or 0.80% to 3,189.04

 

  • Hang Seng increased 406.95 points or 2.06% to 20,174.04

 

  • ASX 200 decreased 1.00 points or -0.01% to 6,974.90

 

  • Kospi increased 11.66 points or 0.47% to 2,473.11

 

  • SENSEX decreased 51.73 points or -0.09% to 58,298.80

 

  • Nifty50 decreased 6.15 points or -0.04% to 17,382.00

 

The major Asian currency markets had a mixed day today:

 

  • AUDUSD increased 0.0033 or 0.48% to 0.69760

 

  • NZDUSD increased 0.00337 or 0.54% to 0.63037

 

  • USDJPY decreased 1.047 or -0.78% to 133.048

 

  • USDCNY decreased 0.00865 or -0.13% to 6.75185

 

Precious Metals:

 

l Gold increased 28.89 USD/t oz. or 1.64% to 1,795.71

 

l Silver increased 0.188 USD/t. oz or 0.94% to 20.260

 

Some economic news from last night:

 

Japan:

 

Foreign Bonds Buying decreased from 112.0B to 37.1B

 

Foreign Investments in Japanese Stocks decreased from 297.6B to -120.3B

 

Australia:

 

Exports (MoM) (Jun) decreased from 8.9% to 5.1%

 

Imports (MoM) (Jun) decreased from 5.0% to 0.7%

 

Trade Balance (Jun) increased from 15.016B to 17.670B

 

EUROPE/EMEA:

OPEC+ is set to raise its oil production target by 100,000 barrels a day, a setback analysts say is a setback for US President Joe Biden after his trip to Saudi Arabia, where he asked the producer group’s leader to pump more to help the United States and the world. economy. The 100,000-bpd increase will be one of the smallest since OPEC quotas were introduced in 1982, OPEC data show. The Organization of the Petroleum Exporting Countries and its allies led by Russia, a group known as OPEC+ that was formed in 2017, raised output by about 430,000 to 650,000 barrels a day in a month as they ended record supply cuts that occurred after the end of the pandemic blockade.

Less than a month after raising interest rates for the first time in more than a decade, traders are betting that the European Central Bank is already a third of the way through its tightening cycle. Money markets indicate that the central bank will raise rates by another 100 basis points, or 1 percentage point. That’s about half of what was expected in late July. ECB officials raised rates by 50 basis points last month, but since then more economists have predicted the euro zone will succumb to recession this year, limiting the central bank’s ability to tighten policy. The combination of a smaller interest rate hike and a looming recession has led investors to sell the euro and buy government bonds. German two-year notes are yielding 0.21%, the lowest since May. The euro weakened 0.2% to $1.0238.

 

The major Europe stock markets had a green day:

 

l CAC 40 increased 41.33 points or 0.64% to 6,513.39

 

l FTSE 100 increased 2.38 points or 0.03% to 7,448.06

 

l DAX 30 increased 75.12 points or 0.55% to 13,662.68

 

The major Europe currency markets had a mixed day today:

 

  • EURUSD increased 0.00888 or 0.87% to 1.02479

 

  • GBPUSD increased 0.00302 or 0.25% to 1.21707

 

  • USDCHF decreased 0.00594 or -0.62% to 0.95456

 

Some economic news from Europe today:

 

Germany:

 

German Factory Orders (MoM) (Jun) decreased from -0.2% to -0.4%

 

IHS S&P Global Construction PMI (Jul) decreased from 45.9 to 43.7

 

UK:

 

Construction PMI (Jul) decreased from 52.6 to 48.9

 

BoE Interest Rate Decision (Aug) increased from 1.25% to 1.75%

US/AMERICAS:

Initial jobless claims came in at 260,000 last week, marking a high not seen in the US since November. The week prior was revised upward by 6,000, according to the Labor Department. The Bureau of Labor Statistics will release the highly watched nonfarm payrolls report for July this Friday. Analysts anticipate that job growth reached 258,000 last month, down from 372,000 in June.

The trade deficit for goods and services in the US fell in June to $79.6 billion, which is slightly down from the month prior’s $5.3 billion deficit. Exports spiked to a high of $260.8 billion or 1.7%, according to the Commerce Department, while imports fell to $340.4 billion or 0.3%.

US Market Closings:

  • Dow declined 85.68 points or -0.26% to 32,726.82
  • S&P 500 declined 3.23 points or -0.08% to 4,151.94
  • Nasdaq advanced 52.42 points or 0.41% to 12,720.58
  • Russell 2000 declined 2.47 points or -0.13% to 1,906.46

 

Canada Market Closings:

  • TSX Composite advanced 31.1 points or 0.16% to 19,577.04
  • TSX 60 advanced 2.71 points or 0.23% to 1,184.05

 

Brazil Market Closing:

  • Bovespa advanced 2,117.54 points or 2.04% to 105,892.22

 

ENERGY:

 

The oil markets had a negative day today:

 

l Crude Oil decreased 2.26 USD/BBL or -2.49% to 88.573

 

l Brent decreased 2.85 USD/BBL or -2.94% to 94.055

 

l Natural gas decreased 0.078 USD/MMBtu or -0.94% to 8.1821

 

l Gasoline decreased 0.1285 USD/GAL or -4.41% to 2.7884

 

l Heating oil decreased 0.0927 USD/GAL or -2.71% to 3.3285

 

The above data was collected around 14:58 EST on Thursday

 

l Top commodity gainers: Platinum (3.61%), Cocoa(2.98%), Soybeans (3.66%) and Zinc (5.65%)

 

l Top commodity losers: Brent (-2.94%), Bitumen (-2.85%), Heating Oil (-2.71%) and Gasoline (-4.41%)

 

The above data was collected around 15:04 EST on Thursday.

 

BONDS:

 

Japan 0.175%(-1.4bp), US 2’s 3.03% (-0.078%), US 10’s 2.6720% (-7.6bps); US 30’s 2.96% (-0.019%), Bunds 0.8090% (-6.5bp), France 1.3520% (-8.8bp), Italy 2.969% (-5.4bp), Turkey 16.72% (-9bp), Greece 2.977% (-6.9bp), Portugal 1.849% (-7.5bp); Spain 1.925% (-6.3bp) and UK Gilts 1.8870% (-2.6bp).

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