Market Talk – July 14, 2022

ASIA:

Singapore’s economy grew 4.8 percent year-on-year in the second quarter of 2022, according to advance estimates released by the Ministry of Trade and Industry (MTI) on Thursday (Jul 14). On a quarter-on-quarter seasonally adjusted basis, Singapore’s gross domestic product (GDP) was unchanged in the second quarter after posting an expansion of 0.9 percent in the first quarter. The manufacturing sector expanded by 8 percent year-on-year in the second quarter of 2022, similar to the 7.9 percent growth in the previous quarter.

The top economic officials of the United States and Japan have pledged to work together to tackle rising food and energy prices while reiterating their condemnation of Russia’s war in Ukraine. US Treasury Secretary Janet Yellen and Japanese Finance Minister Shunichi Suzuki on Tuesday said the war had increased exchange rate volatility, posing risks to economic and financial stability. Japan, which is heavily dependent on oil imports, has been grappling with limited energy supplies partly as a result of the war and the falling value of the yen against the US dollar.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 164.62 points or 0.62% to 26,643.39
  • Shanghai decreased 2.55 points or -0.08% to 3,281.74
  • Hang Seng decreased 46.74 points or -0.22% to 20,751.21
  • ASX 200 increased 29.00 points or 0.44% to 6,650.60
  • Kospi decreased 6.29 points or -0.27% to 2,322.32
  • SENSEX decreased 98.00 points or -0.18% to 53,416.15
  • Nifty50 decreased 28.00 points or -0.18% to 15,938.65

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00186 or 0.28% to 0.67516
  • NZDUSD decreased 0.00031 or -0.05% to 0.61279
  • USDJPY increased 1.33 or 0.97% to 138.908
  • USDCNY increased 0.0285 or 0.42% to 6.75360

Precious Metals:

l Gold decreased 24.11 USD/t oz. or -1.39% to 1,711.12

l Silver decreased 0.712 USD/t. oz or -3.71% to 18.478

Some economic news from last night:

Japan:

Foreign Bonds Buying decreased from -1,414.0B to -1,491.0B

Foreign Investments in Japanese Stocks increased from -490.3B to 526.3B

Australia:

MI Inflation Expectations decreased from 6.7% to 6.3%

Related:  Market Talk - June 6, 2022

Employment Change (Jun) increased from 60.6K to 88.4K

Full Employment Change (Jun) decreased from 69.4K to 52.9K

Participation Rate (Jun) increased from 66.7% to 66.8%

Unemployment Rate (Jun) decreased from 3.9% to 3.5%

Singapore:

GDP (QoQ) (Q2) decreased from 1.4% to 0.1%

GDP (YoY) (Q2) increased from 4.0% to 4.8%

Some economic news from today:

Japan:

Capacity Utilization (MoM) (May) decreased from 0.0% to -9.2%

Industrial Production (MoM) (May) decreased from -4.9% to -7.5%

India:

WPI Food (YoY) (Jun) increased from 12.34% to 14.39%

WPI Fuel (YoY) (Jun) decreased from 40.62% to 40.38%

WPI Inflation (YoY) (Jun) decreased from 15.88% to 15.18%

WPI Manufacturing Inflation (YoY) (Jun) decreased from 10.11% to 9.19%

Exports (USD) (Jun) increased from 37.94B to 40.13B

Imports (USD) (Jun) increased from 63.58B to 66.31B

M3 Money Supply increased from 7.8% to 8.9%

Trade Balance (Jun) decreased from -25.64B to -26.18B

CPI (YoY) (Jun) decreased from 7.04% to 7.01%

EUROPE/EMEA:

The euro dropped below parity against the dollar on Wednesday for the first time in almost two decades, as a hawkish U.S. Federal Reserve and growing concern about rising recession risks in the euro area continued to batter the currency. Europe’s single currency started this year on a strong note given a post-pandemic economic recovery. But Russia’s invasion of Ukraine, surging European gas prices and fears that Moscow could cut off supplies further has raised the spectre of recession and hurt the euro. The euro tanked as much as 0.4% to a low of $0.9998 at 1245 GMT, its lowest level since December 2002. It was last down 0.1% on the day at $1.005 and has lost more than 10% so far this year.

Former finance minister Rishi Sunak cemented his lead over rivals to become Britain’s next prime minister on Thursday in an increasingly bitter race to replace Boris Johnson. Sunak, whose exit from the Treasury last week was one of the first in a cascade of resignations that forced Johnson to quit, has been the frontrunner among Conservative lawmakers despite being blamed by some for his role in Johnson’s downfall. He faces competition from Penny Mordaunt, a junior trade minister, and foreign minister Liz Truss, who launched her official campaign earlier, arguing she was the only contender with the experience to take the “tough decisions” needed.

Related:  Market Talk - April 18, 2022

The major Europe stock markets had a negative day:

l CAC 40 decreased 84.83 points or -1.41% to 5,915.41

l FTSE 100 decreased 116.56 points or -1.63% to 7,039.81

l DAX 30 decreased 236.66 points or -1.86% to 12,519.66

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00073 or -0.07% to 1.00267
  • GBPUSD decreased 0.00308 or -0.26% to 1.18273
  • USDCHF increased 0.00458 or 0.47% to 0.98328

Some economic news from Europe today:

Germany:

Germany Thomson Reuters IPSOS PCSI (Jul) decreased from 48.60 to 47.48

German WPI (YoY) (Jun) decreased from 22.9% to 21.2%

German WPI (MoM) (Jun) decreased from 1.0% to 0.1%

Swiss:

PPI (YoY) (Jun) remain the same at 6.9%

PPI (MoM) (Jun) decreased from 0.9% to 0.3%

UK:

Thomson Reuters IPSOS PCSI (Jun) decreased from 43.7 to 43.3

Italy:

Italy Thomson Reuters IPSOS PCSI (Jul) decreased from 41.93 to 38.80

France:

France Thomson Reuters IPSOS PCSI (Jun) increased from 44.23 to 42.53

US/AMERICAS:

Series I bonds are paying 9.62% interest through October, and some US politicians are urging to make purchasing debt easier. Rep. Abigail Spanberger sent a letter to Treasury Secretary Janet Yellen urging her to remove “red tape and outdated systems” that prevent Americans from buying bonds. The lawmaker noted that seniors in particular have trouble accessing savings options due to the online registry. Others have issues verifying their identity and must visit a physical bank or credit union to provide a signature guarantee. Demand for Series I bonds rose in November by 7.12% as 1.85 million new accounts opened through the last week of June.

The markets are pricing in a 75 bps hike at the next Federal Reserve meeting, but will they push rates higher as Canada’s central bank did yesterday? Fed Governor Christopher Waller expects there to be a 75 bps rise at the end of the month, but would not be surprised if the Fed acts more aggressively. We have important data releases on retail sales and housing coming in before the July meeting. If that data comes in materially stronger than expected, it would make me lean towards a larger hike at the July meeting to the extent it shows demand is not slowing down fast enough to get inflation down,” Waller said after saying he supports the 75 bps hike with the present data. The retail sales data will be revealed on Friday, and the most recent CPI report broke records after reaching 9.1% YoY.

Related:  Market Talk - June 30, 2022

US Market Closings:

  • Dow declined 142.62 points or -0.46% to 30,630.17
  • S&P 500 declined 11.4 points or -0.3% to 3,790.38
  • Nasdaq advanced 3.6 points or 0.03% to 11,251.19
  • Russell 2000 declined 18.53 points or -1.07% to 1,707.51

Canada Market Closings:

  • TSX Composite declined 286.13 points or -1.54% to 18,329.06
  • TSX 60 declined 19.31 points or -1.71% to 1,112.4

Brazil Market Closing:

  • Bovespa declined 1,760.31 points or -1.8% to 96,120.85

ENERGY:

The oil markets had a mixed day today:

l Crude Oil increased 0.08 USD/BBL or 0.08% to 96.380

l Brent increased 0.14 USD/BBL or 0.14% to 99.71

l Natural gas decreased 0.044 USD/MMBtu or -0.66% to 6.6430

l Gasoline decreased 0.0377 USD/GAL or -1.17% to 3.1960

l Heating oil increased 0.0098 USD/GAL or 0.27% to 3.6757

The above data was collected around 15:10 EST on Thursday

l Top commodity gainers: Soybeans (1.37%), Rubber (1.81%), Potatoes (6.29%) and Canola (1.55%)

l Top commodity losers: Palm Oil (-5.13%), Coffee (-5.05%), Cotton (-4.19%) and Corn (-6.08%)

The above data was collected around 15:20 EST on Thursday.

BONDS:

Japan 0.234%(+0bp), US 2’s 3.16% (+0.015%), US 10’s 2.9688% (+6.28bps); US 30’s 3.11% (+0.045%), Bunds 1.179% (+3.4bp), France 1.6850% (+2bp), Italy 3.4210% (+19.3bp), Turkey 18.14% (-5bp), Greece 3.534% (+3.9bp), Portugal 2.363% (+9.7bp); Spain 2.391% (+13.3bp) and UK Gilts 2.1010% (+4.1bp).

Original Article

Leave a Comment