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HomeEconomyMarket Talk – August 5, 2022

Market Talk – August 5, 2022


ASIA:

China continued military exercises near Taiwan and flew drones near Japan on Friday, escalating cross-strait tensions that have threatened to boil over since Taipei welcomed US House Speaker Nancy Pelosi for a historic visit. Taiwan’s defense ministry said Chinese warships and aircraft continued exercises in the waters around the island, adding that Chinese People’s Liberation Army (PLA) forces had crossed the median line – halfway between the island and mainland China – in a move called “highly a provocative act.” Two Chinese drones also flew over Japan’s Okinawa Prefecture on Thursday, prompting the country’s air self-defense to respond with fighter jets, according to a statement from the Tokyo Defense Ministry on Friday.

The major Asian stock markets had a green day today:

  • NIKKEI 225 increased 243.67 points or 0.87% to 28,175.87
  • Shanghai increased 37.99 points or 1.19% to 3,227.03
  • Hang Seng increased 27.90 points or 0.14% to 20,201.94
  • ASX 200 increased 40.70 points or 0.58% to 7,015.60
  • Kospi increased 17.69 points or 0.72% to 2,490.80
  • SENSEX increased 89.13 points or 0.15% to 58,387.93
  • Nifty50 increased 15.50 points or 0.09% to 17,397.50

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00583 or -0.84% to 0.69034
  • NZDUSD decreased 0.0063 or -1.00% to 0.62390
  • USDJPY increased 2,523 or 1.90% to 135.269
  • USDCNY increased 0.01743 or 0.26% to 6.76783

Precious Metals:

l Gold decreased 18.31 USD/t oz. or -1.02% to 1,772.77

l Silver decreased 0.310 USD/t. oz or -1.54% to 19.841

Some economic news from last night:

Japan:

Average Cash Earnings (YoY) increased from 1.0% to 2.2%

Household Spending (MoM) (Jun) increased from -1.9% to 1.5%

Household Spending (YoY) (Jun) increased from -0.5% to 3.5%

Overall wage income of employees (Jun) increased from 1.0% to 2.2%

Overtime Pay (YoY) (Jun) increased from 5.50% to 5.80%

Foreign Reserves (USD) (Jul) increased from 1,311.3B to 1,323.0B

South Korea:

Current Account (Jun) increased from 3.86B to 5.61B

Australia:

AIG Services Index (Jul) increased from 48.8 to 51.7

Some economic news from today:

India:

Cash Reserve Ratio remain the same at 4.50%

Interest Rate Decision increased from 4.90% to 5.40%

Reverse REPO Rate remain the same at 3.35%

FX Reserves, USD increased from 571.56B to 573.88B

Japan:

Coincident Indicator (MoM) (Jun) increased from -1.9% to 4.1%

Leading Index decreased from 101.2 to 100.6

Leading Index (MoM) (Jun) increased from -1.7% to -0.6%

Hong Kong:

Foreign Reserves (USD) (Jul) decreased from 447.20B to 441.70B

Singapore:

Retail Sales (MoM) (Jun) decreased from 1.8% to -1.4%

Retail Sales (YoY) (Jun) decreased from 17.8% to 14.8%

EUROPE/EMEA:

The Bank of England has warned that the UK will fall into recession as it raised interest rates by the most in 27 years. The economy is expected to shrink in the final three months of this year and continue to shrink until the end of 2023. Interest rates have risen to 1.75% as the bank battles to stem soaring prices, with inflation now above 13%. The bank’s governor, Andrew Bailey, said he had “enormous sympathy and enormous understanding for those who are struggling most” with the cost of living. Now rates have risen to 1.75%, homeowners with a typical mortgage will have to pay £52 more a month. Those with standard variable rate mortgages will see an increase of £59.

The major Europe stock markets had a negative day:

l CAC 40 decreased 41.04 points or -0.63% to 6,472.35

l FTSE 100 decreased 8.32 points or -0.11% to 7,439.74

l DAX 30 decreased 88.75 points or -0.65% to 13,573.93

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.0068 or -0.66% to 1.01797
  • GBPUSD decreased 0.00803 or -0.66% to 1.20768
  • USDCHF increased 0.00749 or 0.78% to 0.96239

Some economic news from Europe today:

UK:

Halifax House Price Index (YoY) decreased from 12.5% to 11.8%

Halifax House Price Index (MoM) (Jul) decreased from 1.4% to -0.1%

Germany:

German Industrial Production (MoM) (Jun) increased from -0.1% to 0.4%

France:

French Current Account (Jun) increased from -3.70B to -1.60B

French Exports (Jun) increased from 48.2B to 49.7B

French Imports (Jun) increased from 61.1B to 62.8B

French Industrial Production (MoM) (Jun) increased from 0.2% to 1.4%

French Non-Farm Payrolls (QoQ) (Q2) increased from 0.3% to 0.5%

French Reserve Assets Total (Jul) increased from 240,187.0M to 241,892.0M

French Trade Balance (Jun) decreased from -12.9B to -13.1B

Spain:

Spanish Industrial Production (YoY) (Jun) increased from 4.5% to 7.0%

Italy:

Italian Industrial Production (MoM) (Jun) decreased from -1.1% to -2.1%

Italian Industrial Production (YoY) (Jun) decreased from 3.4% to -1.2%

US/AMERICAS:

The US Bureau of Labor Statistics (BLS) reported a optimistic jobs report this Friday. Nonfarm payrolls increased by 528,000 in July, surpassing expectations of 258,000, which lowered the unemployment rate from 3.6% to 3.5%. Wage growth rose 0.5% for the month and 5.2% on an annual basis. Leisure and hospitality saw the most notable uptick after adding 96,000 jobs, followed by business services at 89,000. Health services rose by 70,000 positions, government grew by 57,000, and construction saw an increase of 32,000. This is the strongest payroll report since February of this year.

US Market Closings:

  • Dow advanced 74.69 points or 0.23% to 32,801.51
  • S&P 500 declined 6.87 points or -0.17% to 4,145.07
  • Nasdaq declined 63.02 points or -0.5% to 12,657.56
  • Russell 2000 advanced 15.37 points or 0.81% to 1,921.82

 

Canada Market Closings:

  • TSX Composite advanced 43.09 points or 0.22% to 19,620.13
  • TSX 60 advanced 2.19 points or 0.18% to 1,186.24

 

Brazil Market Closing:

  • Bovespa advanced 579.7 points or 0.55% to 106,471.92

 

ENERGY:

The oil markets had a mixed day today:

l Crude Oil increased 1.25 USD/BBL or 1.41% to 89.703

l Brent increased 1.5 USD/BBL or 1.59% to 95.436

l Natural gas increased 0.066 USD/MMBtu or 0.81% to 8.1923

l Gasoline increased 0.0782 USD/GAL or 2.80% to 2.8677

l Heating oil decreased 0.0627 USD/GAL or -1.88% to 3.2688

The above data was collected around 12:52 EST on Friday

l Top commodity gainers: Gasoline (2.80%), Sugar(2.22%), Palladium (3.15%) and Oat (2.16%)

l Top commodity losers: Cocoa (-1.62%), Coffee (-4.13%), Lumber (-4.06%) and Heating Oil (-1.88%)

The above data was collected around 13:00 EST on Friday.

BONDS:

Japan 0.165%(+0bp), US 2’s 3.24% (+0.201%), US 10’s 2.8360% (+16bps); US 30’s 3.07% (+0.113%), Bunds 0.9440% (+13.5bp), France 1.4950% (+13.3bp), Italy 3.03% (+8.4bp), Turkey 16.45% (-27bp), Greece 3.052% (+7.5bp), Portugal 1.970% (+13.2bp); Spain 2.046% (+13.6bp) and UK Gilts 2.0350% (+14.8bp).

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