Market Talk – August 25, 2022

ASIA:

In its monthly economic report, the Japanese government described its economy as “growing modestly,” leaving the overall rating unchanged from the previous month, while noting an upward revision of factory output. Factory output showed signs of recovery, the report said, compared to July, when output appeared to be flat. This marked the first upgrade in seven months. The assessment of other main components of the economy did not change compared to last month. Private consumption, which accounts for more than half of Japan’s economy, grew modestly, a report said, pointing to renewed activity among consumers “living with the coronavirus” after the lifting of COVID-19 restrictions.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 165.54 points or 0.58% to 28,479.01
  • Shanghai increased 31.04 points or 0.97% to 3,246.25
  • Hang Seng increased 699.64 points or 3.63% to 19,968.38
  • ASX 200 increased 50.00 points or 0.71% to 7,048.10
  • Kospi increased 29.81 points or 1.22% to 2,477.26
  • SENSEX decreased 310.71 points or -0.53% to 58,774.72
  • Nifty50 decreased 82.50 points or -0.47% to 17,522.45

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00680 or 0.98% to 0.69750
  • NZDUSD increased 0.00350 or 0.56% to 0.62218
  • USDJPY decreased 0.572 or -0.42% to 136.498
  • USDCNY decreased 0.02570 or -0.37% to 6.84941

Precious Metals:

l Gold increased 6.79 USD/t oz. or 0.39% to 1,757.68

l Silver increased 0.061 USD/t. oz or 0.32% to 19.221

Some economic news from last night:

Japan:

Corporate Services Price Index (CSPI) (YoY) remain the same at 2.1%

Foreign Bonds Buying decreased from 1,154.7B to -79.2B

Foreign Investments in Japanese Stocks decreased from 45.3B to 28.5B

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South Korea:

Interest Rate Decision (Aug) increased from 2.25% to 2.50%

PPI (MoM) (Jul) decreased from 0.6% to 0.3%

PPI (YoY) (Jul) decreased from 10.0% to 9.2%

New Zealand:

Retail Sales (QoQ) (Q2) decreased from -0.9% to -2.3%

Some economic news from today:

India:

M3 Money Supply decreased from 8.6% to 8.4%

Hong Kong:

Exports (MoM) (Jul) decreased from -6.4% to -8.9%

Imports (MoM) (Jul) decreased from 0.5% to -9.9%

Trade Balance increased from -68.5B to -27.6B

EUROPE/EMEA:

Spending by British consumers on credit and debit cards fell by four percentage points in the week to August 18, weekly data compiled by the Office for National Statistics showed, adding to households feeling the pinch from high inflation. Spending on credit and debit cards – based on Bank of England CHAPS interbank payment flows and not seasonally or inflation adjusted – showed the biggest weekly declines were in “deferred” and “social” spending, by eight and four percent, the ONS said. The BoE predicts the UK economy will slip into recession later this year as soaring energy bills help push inflation into double digits.

Moscow Exchange plans to relaunch the evening session on its stock market in September, the head of its stock market department said on Thursday, as Russia’s largest bourse eyes a gradual return to normal. Stocks trading was halted on Moscow’s bourse for almost a month from Feb. 25, the day after President Vladimir Putin sent troops into neighboring Ukraine, prompting Western sanctions aimed at isolating Russia economically and then Russian countermeasures. The bourse is making a gradual return to normal, but not all its efforts for a smooth resumption of activity have been successful.

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The major Europe stock markets had a mixed day:

  • CAC 40 decreased 5.20 points or -0.08% to 6,381.56
  • FTSE 100 increased 8.23 points or 0.11% to 7,479.74
  • DAX 30 increased 51.90 points or 0.39% to 13,271.96

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00082 or 0.08% to 0.99778
  • GBPUSD increased 0.00428 or 0.36% to 1.18373
  • USDCHF decreased 0.00256 or -0.26% to 0.96364

Some economic news from Europe today:

Germany:

German GDP (YoY) (Q2) increased from 1.5% to 1.8%

German GDP (QoQ) (Q2) decreased from 0.2% to 0.1%

German Business Expectations (Aug) decreased from 80.4 to 80.3

German Current Assessment (Aug) decreased from 97.7 to 97.5

German Ifo Business Climate Index (Aug) decreased from 88.7 to 88.5

France:

France Jobseekers Total increased from 2,947.0K to 2,967.0K

US/AMERICAS:

Although the Federal Reserve will not officially meet this month, Chairman Powell is set to speak tomorrow morning at Jackson Hole. The markets believe that Powell will use this time to emphasize the Fed’s main goal – controlling inflation. Despite the slight downtick in inflation last month, the central bank has stressed that it will need to see a strong indication of prices declining consistently before loosening policy.

Kansas City Fed bank president Esther George said that she believes the FOMC will raise rates throughout the end of the year. “We have to see the federal funds rate reach a point where inflation begins to meaningfully decelerate because we can’t really know what is the point at which a resting point will be,” she told reporters at FOX. George said she has not decided whether a 50 or 75 bps hike would be appropriate for September, but she believes that the economic imbalance must be adjusted. She noted that the Fed has no control over the supply chain issues, but they affect demand.

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US Market Closings:

  • Dow advanced 324.43 points or 0.98% to 33,293.66
  • S&P 500 advanced 58.71 points or 1.42% to 4,199.48
  • Nasdaq advanced 207.74 points or 1.67% to 12,639.27
  • Russell 2000 advanced 29.35 points or 1.52% to 1,964.64

Canada Market Closings:

  • TSX Composite advanced 150.96 points or 0.75% to 20,172.34
  • TSX 60 advanced 9.34 points or 0.77% to 1,217.33

Brazil Market Closing:

  • Bovespa advanced 633.88 points or 0.56% to 113,531.72

ENERGY:

The oil markets had a mixed day today:

  • Crude Oil decreased 2.045 USD/BBL or -2.15% to 92.846
  • Brent decreased 1.423 USD/BBL or -1.41% to 99.797
  • Natural gas increased 0.0221 USD/MMBtu or 0.24% to 9.3521
  • Gasoline increased 0.0144 USD/GAL or 0.51% to 2.8151
  • Heating oil decreased 0.0696 USD/GAL or -1.73% to 3.9436

The above data was collected around 16:20 EST on Thursday

l Top commodity gainers: Copper (1.73%), Lumber (4.97%), Zinc (1.14%) and Palladium (5.45%)

l Top commodity losers: Oat (-3.36%), Wheat (-3.18%), Crude Oil (-2.15%) and Heating Oil (-1.73%)

The above data was collected around 16:28 EST on Thursday.

BONDS:

Japan 0.230%(+0.6bp), US 2’s 3.37% (-0.014%), US 10’s 3.0333% (-7.27bps); US 30’s 3.24% (-0.075%), Bunds 1.329% (-3.4bp), France 1.934% (-4.9bp), Italy 3.5530% (-12.1bp), Turkey 12.94% (+13bp), Greece 3.903% (-9bp), Portugal 2.400% (-6bp); Spain 2.495% (-7.5bp) and UK Gilts 2.6180% (-7.9bp).

Original Article

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