Market Talk – August 16, 2022

ASIA:

The move to delist five Chinese state-owned enterprises (SOEs) from the New York Stock Exchange (NYSE) signals that Beijing may be willing to compromise to strike an audit deal with the United States and end a more than decade-old dispute. Analysts and consultants informed about it on Monday. Five state-owned enterprises, including oil major Sinopec and China Life Insurance, whose audits have been under scrutiny by the US securities regulator, announced on Friday that they were voluntarily delisting from the NYSE. Beijing and Washington are in talks to end a dispute that has threatened to delist hundreds of Chinese firms from their listings in New York unless China meets Washington’s demand for full access to the books of US-listed Chinese companies.

India’s consumer inflation eased to 6.71% in July, easing for a third straight month, helped by slower increases in food and fuel prices and adding to expectations that the central bank may rein in the pace of interest rate hikes next month. The year-on-year figure, published by the Office for National Statistics on Friday, was marginally lower than the 6.78% forecast by economists in a Reuters poll. However, it remained above the central bank’s tolerance band of 2-6% for the seventh consecutive month. Economists said they expect the Reserve Bank of India (RBI) to raise its key interest rate by at least 25 basis points next month as inflation is likely to remain above its tolerance band during this calendar year.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 2.87 points or -0.01% to 28,868.91
  • Shanghai increased 1.80 points or 0.05% to 3,277.88
  • Hang Seng decreased 210.34 points or -1.05% to 19,830.52
  • ASX 200 increased 41.10 points or 0.58% to 7,105.40
  • Kospi increased 5.58 points or 0.22% to 2,533.52
  • SENSEX increased 379.43 points or 0.64% to 59,842.21
  • Nifty50 increased 127.10 points or 0.72% to 17,825.25
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The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00103 or -0.15% to 0.70098
  • NZDUSD decreased 0.00299 or -0.47% to 0.63331
  • USDJPY increased 1.257 or 0.94% to 134.382
  • USDCNY decreased 0.01475 or -0.22% to 6.80085

Precious Metals:

l Gold decreased 2.03 USD/t oz. or -0.11% to 1,776.88

l Silver decreased 0.092 USD/t. oz or -0.45% to 20.163

Some economic news from last night:

South Korea:

Exports (YoY) (Jul) decreased from 9.4% to 9.2%

Imports (YoY) (Jul) remain the same at 21.8%

Trade Balance (Jul) decreased from -4.67B to -4.80B

New Zealand:

RBNZ Offshore Holdings (Jul) remain the same at 53.70%

Some economic news from today:

Japan:

Tertiary Industry Activity Index (MoM) decreased from 0.8% to -0.2%

India:

WPI Food (YoY) (Jul) decreased from 14.39% to 10.77%

WPI Fuel (YoY) (Jul) increased from 40.38% to 43.75%

WPI Inflation (YoY) (Jul) decreased from 15.18% to 13.93%

WPI Manufacturing Inflation (YoY) (Jul) decreased from 9.19% to 8.16%

New Zealand:

GlobalDairyTrade Price Index increased from -5.0% to -2.9%

EUROPE/EMEA:

Britain’s super-hot jobs market showed signs of cooling in official data released on Tuesday as businesses became more cautious about hiring and workers suffered a record drop in their basic wages when adjusted for surging inflation. The unemployment rate of 3.8% in the three months to June was unchanged from last month’s report, near a half-century low despite the Bank of England’s warning that the economy was likely to slip into recession later this year. The number of people in work rose by 160,000 in the April-June period from the previous quarter, but that was much less than expected in a Reuters poll of economists, which showed a rise of 256,000. Job vacancies in the three months to July fell for the first time since mid-2020 but remained near a record high of 1.274 million.

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Swedish furniture giant IKEA has decided to liquidate its Russian unit, limited liability company IKEA Dom, further scaling back its operations after more than a decade of presence in the country, a company filing showed on Tuesday. Several consumer brands suspended operations in Russia after Moscow sent tens of thousands of troops to Ukraine on February 24, with H&M, IKEA and Nike among others announcing plans to leave permanently. IKEA, the world’s largest furniture brand, closed its stores in March and said it would sell factories, close offices and cut 15,000 jobs in Russia. According to Tuesday’s entry in the Spark database of Russian companies of the Interfax agency, Ingka Holding Europe B.V. decided to liquidate IKEA Dom, where it is the sole owner. IKEA Dom was founded in July 2006.

The major Europe stock markets had a green day:

  • CAC 40 increased 22.63 points or 0.34% to 6,592.58
  • FTSE 100 increased 26.91 points or 0.36% to 7,536.06
  • DAX 30 increased 93.51 points or 0.68% to 13,910.12

The major Europe currency markets had a green day today:

  • EURUSD increased 0.00050 or 0.05% to 1.01667
  • GBPUSD increased 0.00230 or 0.19% to 1.20790
  • USDCHF increased 0.00440 or 0.46% to 0.95067

Some economic news from Europe today:

UK:

Average Earnings ex Bonus (Jun) increased from 4.4% to 4.7%

Average Earnings Index +Bonus (Jun) decreased from 6.4% to 5.1%

Claimant Count Change (Jul) increased from -26.8k to -10.5k

Employment Change 3M/3M (MoM) (Jun) decreased from 296K to 160K

Labour Productivity increased from -0.8% to 0.0%

Unemployment Rate (Jun) remain the same at 3.8%

Germany:

German ZEW Current Conditions (Aug) decreased from -45.8 to -47.6

German ZEW Economic Sentiment (Aug) decreased from -53.8 to -55.3

Euro Zone:

Trade Balance (Jun) increased from -28.4B to -24.6B

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ZEW Economic Sentiment (Aug) decreased from -51.1 to -54.9

US/AMERICAS:

Students defrauded by ITT Technical Institute received a settlement today, according to the US Department of Education. Once the largest for-profit tech school in the nation, ITT was found to have misrepresented its ability to secure a job for their students after graduation. The large $3.9 billion settlement will be distributed to 208,000 borrowers. Some are pointing to this instance as a win for the Biden Administration making good on its promise to cancel student debt, while others are hoping for more relief.

US Market Closings:

  • Dow advanced 239.31 points or 0.71% to 34,151.75
  • S&P 500 advanced 8.06 points or 0.19% to 4,305.2
  • Nasdaq declined 25.5 points or -0.19% to 13,102.55
  • Russell 2000 declined 0.82 of a point or -0.04% to 2,020.53

Canada Market Closings:

  • TSX Composite advanced 89.37 points or  0.44% to 20,269.97
  • TSX 60 advanced 6.64 points or 0.54% to 1,225.74

Brazil Market Closing:

  • Bovespa advanced 480.4 points or 0.43% to 113,512.38

ENERGY:

The oil markets had a mixed day today:

l Crude Oil decreased 2.427 USD/BBL or -2.71% to 86.983

l Brent decreased 2.126 USD/BBL or -2.24% to 92.974

l Natural gas increased 0.4622 USD/MMBtu or 5.30% to 9.1902

l Gasoline decreased 0.0454 USD/GAL or -1.54% to 2.9063

l Heating oil increased 0.0296 USD/GAL or 0.86% to 3.4699

The above data was collected around 12:55 EST on Tuesday

l Top commodity gainers: Palm Oil (1.38%), Natural Gas(5.30%), Zinc (2.30%) and Live Cattle (1.31%)

l Top commodity losers: Crude Oil (-2.71%), Canola (-2.88%), Oat (-4.52%) and Soybeans (-3.01%)

The above data was collected around 13:02 EST on Tuesday.

BONDS:

Japan 0.170%(-1.8bp), US 2’s 3.26% (+0.052%), US 10’s 2.8367% (+4.57bps); US 30’s 3.12% (+0.026%), Bunds 0.9700% (+6.7bp), France 1.5410% (+7.4bp), Italy 3.1410% (+16.2bp), Turkey 16.34% (+10bp), Greece 3.343% (+17.8bp), Portugal 2.014% (+9.4bp); Spain 2.115% (+10.2bp) and UK Gilts 2.1110% (+9.3bp).

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