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Market Talk – September 12, 2022


ASIA:

The Biden administration plans to expand restrictions on US shipments to China of semiconductors used in artificial intelligence and chip-making tools next month, Reuters reported. The Commerce Department intends to publish new regulations based on restrictions announced earlier this year in letters to three US companies – KLA Corp, Lam Research Corp and Applied Materials Inc, sources close to the matter said. The rules would also codify restrictions in Commerce Department letters sent last month to Nvidia Corp and Advanced Micro Devices ordering them to halt shipments of several artificial intelligence computer chips to China unless they obtain licenses. Some sources said the regulations are likely to include additional actions against China. Restrictions could also change, and rules could be published later than expected.

Rice loading has stalled at Indian ports and nearly a million tonnes of the grain is stuck there as buyers refuse to pay the government’s new 20% export tax on top of the agreed contract price, five exporters told Reuters on Friday. India on Thursday banned exports of broken rice and imposed a 20% tariff on exports of various other types, as the world’s biggest grain exporter tries to boost local supplies and calm prices after below-average monsoon rains curbed planting. India ships around two million tonnes of rice every month, with a large quantity being loaded from eastern ports such as Kakinada and Visakhapatnam in the state of Andhra Pradesh.

 

The major Asian stock markets had a green day today:

  • NIKKEI 225 increased 327.36 points or 1.16% to 28,542.11
  • Shanghai closed
  • Hang Seng closed
  • Kospi closed
  • ASX 200 increased 70.30 points or 1.02% to 6,964.50
  • SENSEX increased 321.99 points or 0.54% to 60,115.13
  • Nifty50 increased 103.00 points or 0.58% to 17,936.35

 

 

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00500 or 0.73% to 0.68931
  • NZDUSD increased 0.00400 or 0.66% to 0.61532
  • USDJPY decreased 0.138 or -0.10% to 142.418
  • USDCNY decreased 0.02380 or -0.34% to 6.91244

 

Precious Metals:

Gold increased 13.05 USD/t oz. or 0.76% to 1,729.10

Silver increased 1.064 USD/t. oz or 5.66% to 19.842

 

Some economic news from last night:

New Zealand:

External Migration & Visitors (Jul) increased from 83.50% to 344.20%

Permanent/Long-Term Migration (Jul) increased from -389 to -376

Visitor Arrivals (MoM) increased from 30.1% to 41.8%

 

Some economic news from today:

Japan:

Machine Tool Orders (YoY) increased from 5.5% to 10.7%

India:

CPI (YoY) (Aug) increased from 6.71% to 7.00%

Cumulative Industrial Production (Jul) decreased from 12.70% to 10.00%

Industrial Production (YoY) (Jul) decreased from 12.3% to 2.4%

Manufacturing Output (MoM) (Jul) decreased from 12.5% to 3.2%

 

EUROPE/EMEA:

Russia’s central bank is expected to cut its key interest rate by 50 basis points to 7.5% on Friday to encourage lending as inflation continues to slow, a Reuters poll suggested on Monday. The bank is gradually reversing an emergency rate hike to 20% in late February, which followed Russia’s move on February 24 to send tens of thousands of troops to Ukraine and in response to the imposition of ever-widening Western sanctions. Twenty out of 23 analysts and economists polled by Reuters on Monday predicted Russia would cut its benchmark rate by another 50 basis points on Friday. Russia’s year-on-year inflation slowed further to 14.3% in August, data showed last week, while consumer prices fell for a ninth straight week, thanks in part to a seasonal drop in fruit and vegetable prices. Inflation is still well above the central bank’s 4% target but has fallen from 20-year highs seen shortly after Moscow sent troops into Ukraine.

Fossil fuel firms may have to share excess profits to help European households and industry cope with sky-high energy bills, a draft European Union plan showed on Monday, as the cost of the West’s “energy war” with Russia picks up on rising tax. A draft European Commission proposal due to be unveiled this week would see the 27 EU countries introduce a “solidarity contribution” to the fossil fuel industry. Oil, gas, coal and refining companies would have to make a financial contribution based on taxable surplus profits made in the 2022 fiscal year, according to the proposal, which could still change and would then have to be approved by EU governments.

 

The major Europe stock markets had a green day:

  • CAC 40 increased 121.26 points or 1.95% to 6,333.59
  • FTSE 100 increased 121.96 points or 1.66% to 7,473.03
  • DAX 30 increased 314.06 points or 2.40% to 13,402.27

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00882 or 0.88% to 1.01332
  • GBPUSD increased 0.01086 or 0.94% to 1.16974
  • USDCHF decreased 0.00722 or -0.75% to 0.95268

 

Some economic news from Europe today:

UK:

GDP (MoM) increased from -0.6% to 0.2%

Industrial Production (MoM) (Jul) increased from -0.9% to -0.3%

Manufacturing Production (MoM) (Jul) increased from -1.6% to 0.1%

Monthly GDP 3M/3M Change increased from -0.1% to 0.0%

Trade Balance (Jul) increased from -22.85B to -19.36B

Trade Balance Non-EU (Jul) increased from -12.29B to -10.19B

Italy:

Italian Industrial Production (YoY) (Jul) decreased from -1.1% to -1.4%

Italian Industrial Production (MoM) (Jul) increased from -2.0% to 0.4%

Germany:

German Current Account Balance n.s.a (Jul) decreased from 14.3B to 5.0B

US/AMERICAS:

The New York Fed’s August Survey of Consumer Expectations released today shows that Americans are becoming more optimistic about inflation. People now anticipate inflation to decline to 5.7% in one year, compared with the 6.2% expectation in July. This signals the highest level of confidence in inflation declining since October 2021. However, it is still well above the Fed’s target. People believe inflation will be 2.8%, closer to that 2% target, in three years.

The Department of Justice is cracking down on short selling on numerous blue-chip stocks. The DOJ subpoenaed several firms such as Amazon, Microsoft, and JPMorgan Chase to learn more about their trading information and if practices adhere to regulations. The DOJ and SEC may require large investor to disclose their short positions in the future.

US Market Closings:

  • Dow advanced 229.63 points or 0.71% to 32,381.34
  • S&P 500 advanced 43.05 points or 1.08% to 4,110.41
  • Nasdaq advanced 154.1 points or 1.27% to 12,266.41
  • Russell 2000 advanced 23.24 points or 1.23% to 1,906.09

 

Canada Market Closings:

  • TSX Composite advanced 213.89 points or 1.08% to 19,987.23
  • TSX 60 advanced 11.58 points or 0.97% to 1,207.79

 

Brazil Market Closing:

  • Bovespa advanced 1,106.14 points or 0.98% to 113,406.55

 

ENERGY:

The oil markets had a green day today:

 

Crude Oil increased 0.99 USD/BBL or 1.14% to 87.780

Brent increased 0.996 USD/BBL or 1.07% to 93.836

Natural gas increased 0.2622 USD/MMBtu or 3.28% to 8.2582

Gasoline increased 0.0085 USD/GAL or 0.35% to 2.4416

Heating oil increased 0.0503 USD/GAL or 1.41% to 3.6290

The above data was collected around 14:06 EST on Monday

Top commodity gainers: Silver (5.66%), Oat (4.08%), Lumber (7.07%) and Soybeans (4.58%)

Top commodity losers: Coffee (-0.85%), Wheat (-1.58%), HRC Steel (-1.83%) and Lean Hogs (-1.24%)

 

The above data was collected around 14:17 EST on Monday

BONDS:

 

Japan 0.245%(-0.5bp), US 2’s 3.56% (-0.010%), US 10’s 3.3539% (+3.29bps); US 30’s 3.50% (+0.047%), Bunds 1.645% (-5.5bp), France 2.223% (-4bp), Italy 3.955% (-5bp), Turkey 11.11% (-5bp), Greece 4.215% (-4.4bp), Portugal 2.711% (-6.4bp); Spain 2.834% (-3.2bp) and UK Gilts 3.0820% (-1.3bp).

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