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Market Talk – August 15, 2022


ASIA:

China’s central bank surprisingly cut key interest rates on Monday to revive demand as data showed the economy unexpectedly slowed in July, with factory and retail activity squeezed by Beijing’s zero-Covid policy and the property crisis. Industrial production in July rose 3.8% from a year earlier, according to the National Bureau of Statistics (NBS), below the 3.9% rise in June and the 4.6% rise expected by analysts in a Reuters poll. Retail sales, which only returned to growth in June, rose 2.7% compared to 2009, missing forecasts for the 5.0% increase and the 3.1% increase seen in June. The real estate sector, which was further rocked by a mortgage boycott that weighed on buyer sentiment, worsened in July. Property investment fell 12.3% last month, the fastest pace this year, while the drop in new sales deepened to 28.9%. Official data showed on Friday that new yuan lending fell more than expected in July as companies and consumers remained cautious about borrowing.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 324.80 points or 1.14% to 28,871.78
  • Shanghai decreased 0.80 points or -0.02% to 3,276.09
  • Hang Seng decreased 134.76 points or -0.67% to 20,040.86
  • ASX 200 increased 31.80 points or 0.45% to 7,064.30
  • Kospi closed
  • SENSEX closed
  • Nifty50 closed

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00814 or -1.14% to 0.70380
  • NZDUSD decreased 0.00785 or -1.22% to 0.63745
  • USDJPY decreased 0.261 or -0.20% to 133.229
  • USDCNY increased 0.05788 or 0.86% to 6.79408

Precious Metals:

l Gold decreased 22.06 USD/t oz. or -1.22% to 1,779.70

l Silver decreased 0.509 USD/t. oz or -2.45% to 20.301

Some economic news from last night:

China:

House Prices (YoY) (Jul) decreased from -0.5% to -0.9%

Fixed Asset Investment (YoY) (Jul) decreased from 6.1% to 5.7%

Industrial Production (YoY) (Jul) decreased from 3.9% to 3.8%

Chinese Industrial Production YTD (YoY) (Jul) increased from 3.4% to 3.5%

Retail Sales (YoY) (Jul) decreased from 3.1% to 2.7%

Chinese Retail Sales YTD (YoY) (Jul) increased from -0.69% to -0.21%

Chinese Unemployment Rate decreased from 5.5% to 5.4%

PBoC Loan Prime Rate decreased from 3.70% to 2.75%

Japan:

GDP (QoQ) (Q2) increased from 0.0% to 0.5%

GDP (YoY) (Q2) increased from 0.1% to 2.2%

GDP Capital Expenditure (QoQ) (Q2) increased from -0.7% to 1.4%

GDP External Demand (QoQ) (Q2) increased from -0.4% to 0.0%

GDP Price Index (YoY) increased from -0.5% to -0.4%

GDP Private Consumption (QoQ) (Q2) increased from 0.1% to 1.1%

New Zealand:

Business NZ PMI decreased from 54.7 to 51.2

Some economic news from today:

Japan:

Capacity Utilization (MoM) (Jun) increased from -9.2% to 9.6%

Industrial Production (MoM) (Jun) increased from 8.9% to 9.2%

EUROPE/EMEA:

The Bank of England will likely need to raise interest rates further from their current 14-year highs to deal with inflationary pressures gaining a foothold in the UK economy, its deputy governor Dave Ramsden said. Inflation is expected to return to the bank’s 2% target – from more than 9% now and an expected peak of 13% in October – as the economy slips into recession and borrowing costs rise. The Bank raised borrowing costs by the most since 1995 last week when it raised the Bank Rate to 1.75% from 1.25%, its sixth increase since December, the biggest two-year hit to household disposable income since at least the 1960s 20th century.

The major Europe stock markets had a green day:

  • CAC 40 increased 16.09 points or 0.25% to 6,569.95
  • FTSE 100 increased 8.26 points or 0.11% to 7,509.15
  • DAX 30 increased 20.76 points or 0.15% to 13,816.61

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00843 or -0.82% to 1.01733
  • GBPUSD decreased 0.00664 or -0.55% to 1.20690
  • USDCHF increased 0.00425 or 0.45% to 0.94555

Some economic news from Europe today:

Germany:

German WPI (YoY) (Jul) decreased from 21.2% to 19.5%

German WPI (MoM) (Jul) decreased from 0.1% to -0.4%

Swiss:

PPI (MoM) (Jul) decreased from 0.3% to -0.1%

PPI (YoY) (Jul) decreased from 6.9% to 6.3%

Euro Zone:

Reserve Assets Total (Jul) increased from 1,122.09B to 1,129.15B

US/AMERICAS:

The National Association of Home Builders /Wells Fargo Housing Market Index declined 6 points in August to 49, marking a contraction. This is the first time that the index has dropped below 50 since the beginning of the pandemic. NAHB Chief Economist Robert Dietz blamed elevated construction costs and tighter monetary policy from the Fed. Dietz now believes the US is in a “housing recession.”  Current sales fell 7 points to 57, while expectation for future sales over the next fell months dropped by 2 points to 47. Buyer traffic declined as well by 5 points to a total of 32.

US Market Closings:

  • Dow advanced 151.39 points or 0.45% to 33,912.44
  • S&P 500 advanced 16.99 points or 0.4% to 4,297.14
  • Nasdaq advanced 80.87 points or 0.62% to 13,128.05
  • Russell 2000 advanced 4.73 points or 0.23% to 2,021.35

 

Canada Market Closings:

  • TSX Composite advanced 0.79 of a point or 0% to 20,180.6
  • TSX 60 advanced 1.11 points or 0.09% to 1,219.1

 

Brazil Market Closing:

  • Bovespa advanced 267.72 points or 0.24% to 113,031.98

 

ENERGY:

The oil markets had a mixed day today:

l Crude Oil decreased 3.715 USD/BBL or -4.03% to 88.375

l Brent decreased 3.694 USD/BBL or -3.76% to 94.456

l Natural gas increased 0.0569 USD/MMBtu or 0.65% to 8.8249

l Gasoline decreased 0.1028 USD/GAL or -3.37% to 2.9432

l Heating oil decreased 0.061 USD/GAL or -1.73% to 3.4568

The above data was collected around 12:31 EST on Monday

l Top commodity gainers: Feeder Cattle (0.24%), Natural Gas(0.65%), Cocoa (0.30%) and Cotton (4.37%)

l Top commodity losers: Crude Oil (-4.03%), Brent (-3.76%), Gasoline (-3.37%) and Palm Oil (-6.40%)

The above data was collected around 12:45 EST on Monday.

BONDS:

Japan 0.195%(+0.6bp), US 2’s 3.20% (-0.058%), US 10’s 2.7824% (-6.66bps); US 30’s 3.08% (-0.034%), Bunds 0.9030% (-8.7bp), France 1.4680% (-8bp), Italy 2.9890% (-7.8bp), Turkey 16.24% (+14bp), Greece 3.176% (-5.5bp), Portugal 1.935% (-7.4bp); Spain 2.025% (-8bp) and UK Gilts 2.0270% (-8.4bp).

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