Market Talk – August 6, 2022

ASIA:

China’s consumer inflation could soon surpass 3%, CICC said. A global inflation wave that has largely bypassed the world’s second-largest economy may eventually hit prices there. Consumer price inflation in China has remained relatively low compared to soaring costs seen elsewhere as demand remains squeezed by strict Covid control policies and sporadic outbreaks. China’s consumer price index has risen rapidly in the past few months and is poised to exceed 3% from last year, according to analysts at China International Capital Corp. That would beat the government’s target of around 3% for this year, which poses a challenge. for authorities already struggling to balance a fragile economic recovery.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 73.37 points or 0.26% to 28,249.24
  • Shanghai increased 9.91 points or 0.31% to 3,236.93
  • Hang Seng decreased 156.17 points or -0.77% to 20,045.77
  • ASX 200 increased 5.00 points or 0.07% to 7,020.60
  • Kospi increased 2.30 points or 0.09% to 2,493.10
  • SENSEX increased 465.14 points or 0.80% to 58,853.07
  • Nifty50 increased 127.60 points or 0.73% to 17,525.10

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00685 or 0.99% to 0.69803
  • NZDUSD increased 0.00556 or 0.89% to 0.62816
  • USDJPY decreased 0.174 or -0.13% to 134.837
  • USDCNY decreased 0.00437 or -0.06% to 6.76213

Precious Metals:

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l Gold increased 13.63 USD/t oz. or 0.77% to 1,787.78

l Silver increased 0.740 USD/t. oz or 3.72% to 20.615

Some economic news from last night:

Japan:

Adjusted Current Account increased from 0.01T to 0.84T

Bank Lending (YoY) (Jul) increased from 1.3% to 1.8%

Current Account n.s.a. (Jun) decreased from 0.128T to -0.132T

New Zealand:

Inflation Expectations (QoQ) decreased from 3.3% to 3.1%

Some economic news from today:

Japan:

Economy Watchers Current Index (Jul) decreased from 52.9 to 43.8

Singapore:

Foreign Reserves USD (MoM) (Jul) decreased from 314.3B to 288.2B

EUROPE/EMEA:

The Bank of England raised interest rates by the most in a quarter of a century, even as it predicted the UK economy would slip into recession later this year, underscoring the urgency for global central banks to tackle rising inflation. The hike in rates to 1.75% from 1.25% was the largest since 1995 and the first half-point increase since the bank’s independence in 1997. The move reflects recent rate hikes by the Federal Reserve and the European Central Bank, reflecting concerns that the longer inflation persists, the harder it will be to reduce. While a half-point increase was widely expected, dire warnings about the fragility of the British economy and stagflation, the toxic combination of no economic growth and inflation, caught markets by surprise. The British pound fell against the dollar immediately after the announcement before paring its losses and the yield on Britain’s benchmark 10-year bond fell.

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The major Europe stock markets had a green day:

l CAC 40 increased 52.09 points or 0.80% to 6,524.44

l FTSE 100 increased 42.63 points or 0.57% to 7,482.37

l DAX 30 increased 113.76 points or 0.84% to 13,687.69

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.0016 or 0.16% to 1.01943
  • GBPUSD increased 0.00101 or 0.08% to 1.20815
  • USDCHF decreased 0.0057 or -0.59% to 0.95540

Some economic news from Europe today:

Swiss:

Unemployment Rate n.s.a. (Jul) remain the same at 2.0%

Unemployment Rate s.a. (Jul) remain the same at 2.2%

Euro Zone:

Sentix Investor Confidence (Aug) increased from -26.4 to -25.2

US/AMERICAS:

The US Senate passed the Inflation Reduction Act in a close 51-50 vote. All Republicans voted no, while all Democrats supported the plan. The $430 billion package will go toward climate change, albeit not associated with inflation, health care costs, and additional corporate taxes. Most of the budget ($300 billion) will go directly to climate change initiatives, including clean energy incentives to ask farmers to lower emissions. Large corporations will fact a 15% minimum tax to help cover the plan. One positive aspect is that Medicate may negotiate with pharmaceutical companies for the first time to lower inflated drug costs.

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US Market Closings:

  • Dow advanced 29.07 points or 0.09% to 32,832.54
  • S&P 500 declined 5.13 points or -0.12% to 4,140.06
  • Nasdaq declined 13.1 points or -0.1% to 12,644.46
  • Russell 2000 advanced 19.38 points or 1.01% to 1,941.21

Canada Market Closings:

  • TSX Composite advanced 49.04 points or 0.25% to 19,669.17
  • TSX 60 declined -0.13 of a point or -0.01% to 1,186.11

Brazil Market Closing:

  • Bovespa advanced 1,930.35 points or 1.81% to 108,402.27

ENERGY:

The oil markets had a mixed day today:

l Crude Oil increased 1.692 USD/BBL or 1.90% to 90.702

l Brent increased 1.495 USD/BBL or 1.58% to 96.415

l Natural gas decreased 0.4769 USD/MMBtu or -5.91% to 7.5871

l Gasoline increased 0.0363 USD/GAL or 1.27% to 2.8919

l Heating oil decreased 0.0352 USD/GAL or -1.09% to 3.1807

The above data was collected around 14:37 EST on Monday

l Top commodity gainers: Lumber (7.68%), Palm Oil(4.98%), Palladium (5.61%) and Oat (7.66%)

l Top commodity losers: Zinc (-1.71%), Orange Juice (-3.50%), Natural Gas (-5.91%) and Heating Oil (-1.09%)

The above data was collected around 14:43 EST on Monday.

BONDS:

Japan 0.169%(+0.4bp), US 2’s 3.22% (-0.032%), US 10’s 2.7682% (-7.18bps); US 30’s 3.00% (-0.063%), Bunds 0.8930% (-6.8bp), France 1.4380% (-5.7bp), Italy 3.04% (+1.5bp), Turkey 16.28% (-17bp), Greece 3.083% (+9.3bp), Portugal 1.9410% (-2.5bp); Spain 2.021% (-2bp) and UK Gilts 1.9520% (-9.8bp).

Original Article

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