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HomeEconomyMarket Talk – September 1, 2022

Market Talk – September 1, 2022


ASIA:

The southwestern Chinese capital of Chengdu announced a lockdown of its 21.2 million residents as it began four days of citywide testing for COVID-19 as some of the country’s most populous and economically important cities battle outbreaks. Residents of Chengdu, the capital of Sichuan province, were ordered to stay at home from 6 p.m. On Thursday, households were allowed to send one person a day to buy essentials, the city government said in a statement. Chengdu, which reported 157 domestically transmitted infections on Wednesday, is China’s largest city, which has been locked down since April and May in Shanghai. It remained unclear whether the lockdown would be lifted after mass testing ends on Sunday.

Soldiers from the Indian army have landed in Russia for a week-long military exercise, India’s defense ministry said on Thursday, days after the United States said it had concerns about any country exercising with Russia now. An Indian Army contingent “arrived at the exercise location and over the next seven days will undertake joint man oeuvres to include joint field training exercises, combat discussions, and firepower exercises”, the Indian defense ministry said in a statement. The United States, which has deepened its military partnership with India in recent years, has indicated its discomfort with Indian troops joining the exercise in Russia.

 

The major Asian stock markets had a negative day today:

 

  • NIKKEI 225 decreased 430.06 points or -1.53% to 27,661.47

 

  • Shanghai decreased 17.16 points or -0.54% to 3,184.98

 

  • Hang Seng decreased 357.08 points or -1.79% to 19,597.31

 

  • Kospi decreased 56.44 points or -2.28% to 2,415.61

 

  • ASX 200 decreased 141.20 points or -2.02% to 6,845.60

 

  • SENSEX decreased 770.48 points or -1.29% to 58,766.59

 

  • Nifty50 decreased 216.50 points or -1.22% to 17,542.80

 

The major Asian currency markets had a mixed day today:

 

  • AUDUSD decreased 0.00562 or -0.82% to 0.67746

 

  • NZDUSD decreased 0.00562 or -0.92% to 0.60628

 

  • USDJPY increased 0.786 or 0.56% to 140.044

 

  • USDCNY increased 0.00508 or 0.07% to 6.91038

 

Precious Metals:

 

l Gold decreased 15.33 USD/t oz. or -0.90% to 1,695.38

 

l Silver decreased 0.226 USD/t. oz or -1.25% to 17.745

 

Some economic news from last night:

 

China:

 

Caixin Manufacturing PMI (Aug) decreased from 50.4 to 49.5

 

Japan:

 

Manufacturing PMI (Aug) increased from 51.0 to 51.5

 

Capital Spending (YoY) (Q2) increased from 3.0% to 4.6%

 

Foreign Bonds Buying decreased from -76.7B to -303.7B

 

Foreign Investments in Japanese Stocks decreased from 29.1B to -536.0B

 

Australia:

 

AIG Manufacturing Index (Aug) decreased from 52.5 to 49.3

 

Manufacturing PMI decreased from 55.7 to 53.8

 

Home Loans (MoM) decreased from -3.3% to -7.0%

 

Private New Capital Expenditure (QoQ) (Q2) remain the same at -0.3%

 

Some economic news from today:

 

India:

 

Nikkei S&P Global Manufacturing PMI (Aug) decreased from 56.4 to 56.2

 

Australia:

 

Commodity Prices (YoY) increased from 14.1% to 21.7%

 

EUROPE/EMEA:

Britain’s very high inflation risks distracting businesses from the longer-term decisions needed to boost ailing productivity, Bank of England policymaker Catherine Mann said in a podcast released on Thursday. Mann repeatedly called for half-point increases in the BoE’s main interest rate before a majority of the Monetary Policy Committee backed one last month, when official data showed consumer price inflation had hit a 40-year high of 10.1%. The BoE will release its next interest rate decision on Sept. 15, when financial markets expect the central bank to raise interest rates to 2.25% from 1.75%.

Capping gas prices will be part of discussions at the upcoming meeting of EU energy ministers on September 9, Italy’s minister for ecological transformation, Roberto Cingolani, said in a statement on Thursday. Cingolani added that Italy’s gas demand could be reduced by 3 to 6 billion cubic meters per year by using alternative fuels for a limited time and using energy more efficiently.

 

The major Europe stock markets had a negative day:

 

l CAC 40 decreased 90.79 points or -1.48% to 6,034.31

 

l FTSE 100 decreased 135.65 points or -1.86% to 7,148.50

 

l DAX 30 decreased 204.73 points or -1.60% to 12,630.23

 

The major Europe currency markets had a mixed day today:

 

  • EURUSD decreased 0.01002 or -1.00% to 0.99407

 

  • GBPUSD decreased 0.00637 or -0.55% to 1.15352

 

  • USDCHF increased 0.0054 or 0.55% to 0.98280

 

Some economic news from Europe today:

 

UK:

 

Manufacturing PMI (Aug) increased from 46.0 to 47.3

 

Nationwide HPI (YoY) (Aug) decreased from 11.0% to 10.0%

 

Nationwide HPI (MoM) (Aug) increased from 0.2% to 0.8%

 

Germany:

 

German Retail Sales (YoY) (Jul) increased from -9.6% to -2.6%

 

German Retail Sales (MoM) (Jul) increased from -1.5% to 1.9%

 

German Manufacturing PMI (Aug) decreased from 49.3 to 49.1

 

Swiss:

 

procure.ch PMI (Aug) decreased from 58.0 to 56.4

 

Retail Sales (YoY) (Jul) increased from 0.7% to 2.6%

 

CPI (YoY) (Aug) increased from 3.4% to 3.5%

 

CPI (MoM) (Aug) decreased from 0.5% to 0.3%

 

France:

 

French GDP (YoY) decreased from 4.8% to 4.2%

 

French Manufacturing PMI (Aug) increased from 49.5 to 50.2

 

Spain:

 

Spanish Manufacturing PMI (Aug) increased from 48.7 to 49.9

 

Italy:

 

Italian Manufacturing PMI (Aug) decreased from 48.5 to 48.0

 

Italian Monthly Unemployment Rate (Jul) decreased from 8.0% to 7.9%

 

Italian GDP (YoY) (Q2) decreased from 6.2% to 4.7%

 

Italian GDP (QoQ) (Q2) increased from 0.1% to 1.1%

 

Euro Zone:

 

Unemployment Rate (Jul) decreased from 6.7% to 6.6%

 

Manufacturing PMI (Aug) decreased from 49.7 to 49.6

US/AMERICAS:

The US Labor Department’s weekly job report showed a downturn in unemployment, but an uptick in continuing claims. Claims for the week of August 27 fell by 5,000 from the week prior to 232,000. This is the lowest filing of the summer since June 25. However, continuing claims rose by 26,000 to 1.44 million. Tomorrow the Bureau of Labor Statistics will release the highly anticipated nonfarm payrolls report for August.

US Market Closings:

  • Dow advanced 145.99 points or 0.46% to 31,656.42
  • S&P 500 advanced 11.85 points or 0.3% to 3,966.85
  • Nasdaq declined 31.08 points or -0.26% to 11,785.13
  • Russell 2000 declined 21.3 points or -1.15% to 1,822.82

 

Canada Market Closings:

  • TSX Composite declined 188.09 points or -0.97% to 19,142.72
  • TSX 60 declined 8.97 points or -0.77% to 1,157.36

 

Brazil Market Closing:

  • Bovespa advanced 882.42 points or 0.81% to 110,405.3

 

ENERGY:

 

The oil markets had a mixed day today:

 

l Crude Oil decreased 3.126 USD/BBL or -3.49% to 86.424

 

l Brent decreased 3.357 USD/BBL or -3.51% to 92.283

 

l Natural gas increased 0.1714 USD/MMBtu or 1.88% to 9.2984

 

l Gasoline decreased 0.0605 USD/GAL or -2.49% to 2.3703

 

l Heating oil decreased 0.1331 USD/GAL or -3.63% to 3.5343

 

The above data was collected around 13:15 EST on Thursday

 

l Top commodity gainers: Natural Gas (1.88%), Feeder Cattle (0.53%), Sugar (0.78%) and Steel (0.72%)

 

l Top commodity losers: Oat (-12.55%), Wheat (-3.85%), Cotton (-4.22%) and Zinc (-6.13%)

 

The above data was collected around 13:22 EST on Thursday.

 

BONDS:

 

Japan 0.239%(+1.4bp), US 2’s 3.52% (+0.070%), US 10’s 3.2685% (+13.65bps); US 30’s 3.39% (+0.132%), Bunds 1.565% (+2.9bp), France 2.186% (+3.6bp), Italy 3.920% (+3.2bp), Turkey 12.66% (+3bp), Greece 4.214% (+11.4bp), Portugal 2.695% (+5.2bp); Spain 2.792% (+5.6bp) and UK Gilts 2.8870% (+8.4bp).

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