Market Talk – July 21, 2022

ASIA:

Asian Development Bank (ADD) in its “E-Mobility Options for ADB Developing Member Countries,” which both forecast and recommended the quick shift to electric vehicles in the region to stem both climate change issues and the rising cost of fuel. The report noted how in the People’s Republic of China (PRC) focused on EV production and development both in the small, personal mobility space as well as development of battery and drivetrain technologies locally and in partnership with other car brands. The result is that in the last decade, the uptake of electrified vehicles in China is the highest in the Asian region at 16% — translating to over 4 million pure electric and hybrid vehicles. Automotive industry experts of the ASEAN (Association of Southeast Asian Nations) Automotive Federation are adamant of the viability of electric transport in the region. The group said that the growth of electric vehicles will come from private vehicle purchases first before public transportation.

India’s central bank is prepared to sell a sixth of its foreign exchange reserves to defend the rupee against a rapid depreciation after it plumbed record lows in recent weeks, Reuters reported. The rupee has lost over 7% of its value in 2022 and weakened past the psychological level of 80 per U.S. dollar on Tuesday, but the source said the fall would have been far bigger if the Reserve Bank of India (RBI) had not stepped in to stem the decline. The RBI’s currency reserves have fallen by more than $60 billion from its peak of $642.450 billion in early September, in part due to valuation changes, but largely on the back of dollar selling intervention. Despite the drawdown, the RBI’s reserves of $580 billion remain the fifth largest in the world, giving the central bank confidence in its ability to prevent any sharp, jerky depreciation of the currency.

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The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 122.74 points or 0.44% to 27,803.00
  • Shanghai decreased 32.72 points or -0.99% to 3,272.00
  • Hang Seng decreased 315.59 points or -1.51% to 20,574.63
  • ASX 200 increased 35.10 points or 0.52% to 6,794.30
  • Kospi increased 22.31 points or 0.93% to 2,409.16
  • SENSEX increased 284.42 points or 0.51% to 55,681.95
  • Nifty50 increased 84.40 points or 0.51% to 16,605.25

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00142 or 0.21% to 0.68985
  • NZDUSD decreased 0.00121 or -0.19% to 0.62149
  • USDJPY decreased 0.618 or -0.45% to 137.824
  • USDCNY increased 0.00842 or 0.12% to 6.78252

Precious Metals:

l Gold increased 17.23 USD/t oz. or 1.02% to 1,713.66

l Silver increased 0.094 USD/t. oz or 0.50% to 18.748

Some economic news from last night:

Japan:

BoJ Interest Rate Decision remain the same at -0.10%

Adjusted Trade Balance decreased from -1.89T to -1.93T

Exports (YoY) (Jun) increased from 15.8% to 19.4%

Imports (YoY) (Jun) decreased from 48.9% to 46.1%

Trade Balance (Jun) increased from -2,385.8B to -1,383.8B

Australia:

NAB Quarterly Business Confidence decreased from 15 to 5

New Zealand:

Exports (Jun) decreased from 6.87B to 6.42B

Imports (Jun) increased from 6.68B to 7.12B

Trade Balance (MoM) (Jun) decreased from 195M to -701M

Trade Balance (YoY) (Jun) decreased from -9,560M to -10,510M

Some economic news from today:

Hong Kong :

CPI (YoY) (Jun) increased from 1.20% to 1.80%

Australia:

HIA New Home Sales (MoM) increased from -1.2% to 1.9%

EUROPE/EMEA:

French economic growth will slow sharply next year in the face of mounting geopolitical risks, pushing back improvement in the public sector budget deficit until afterward, the Finance Ministry said on Thursday. Updating its long-term forecasts, the ministry said growth in the euro zone’s second-biggest economy was now expected to slow from 2.5% this year to 1.4% next year. Growth was seen gradually picking up to 1.8% in 2027 as the economy benefited from planned reforms ranging from the pension system to unemployment insurance, Le Maire added. As a result of the lower growth next year, the public sector budget deficit was seen unchanged from this year at 5% of gross domestic product. It would be gradually reduced afterward to within an EU limit of less than 3% by 2027, the ministry said.

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The major Europe stock markets had a mixed day:

  • CAC 40 increased 16.45 points or 0.27% to 6,201.11
  • FTSE 100 increased 6.20 points or 0.09% to 7,270.51
  • DAX 30 decreased 35.34 points or -0.27% to 13,246.64

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00122 or 0.12% to 1.01913
  • GBPUSD decreased 0.00097 or -0.08% to 1.19581
  • USDCHF decreased 0.002 or -0.21% to 0.96930

Some economic news from Europe today:

UK:

Public Sector Net Borrowing (Jun) increased from 11.80B to 22.12B

Public Sector Net Cash Requirement (Jun) increased from 12.103B to 12.610B

France:

French Business Survey (Jul) decreased from 108 to 106

Euro Zone:

Deposit Facility Rate (Jul) increased from -0.50% to 0.00%

ECB Marginal Lending Facility increased from 0.25% to 0.75%

ECB Interest Rate Decision (Jul) increased from 0.00% to 0.50%

US/AMERICAS:

Initial jobless claims in the US rose by 7,000 last week to 251,000 from the week prior. The figure surpassed the 240,000 estimate provided by Dow Jones. Unemployment filing reaching the highest weekly level since November 2021 as the job market begins to wane. Continuing claims, collected a week behind, rose to 1.384 million.

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The Philadelphia Fed manufacturing index slipped 9 points to a reading or -12.3%. Most (61%) firms stated there was no change in activity, but nearly a quarter reported decreases. Only 12% of businesses studied reported any increases. New orders declined for the second consecutive month to -24.8 from 12.4%. The shipment index advanced to 14.8 from 10.8. Inventories and unfilled orders reached negative territory at -9.3% and 10.4%, respectively.

US Market Closings:

  • Dow advanced 161.93 points or 0.51% to 32,036.77
  • S&P 500 advanced 39.18 points or 0.99% to 3,999.08
  • Nasdaq advanced 161.96 points or 1.36% to 12,059.61
  • Russell 2000 advanced 8.74 points or 0.48% to 1,836.69

Canada Market Closings:

  • TSX Composite advanced 42.18 points or 0.22% to 19,062.85
  • TSX 60 advanced 3.36 points or 0.29% to 1,153.43

Brazil Market Closing:

  • Bovespa advanced 746.34 points or 0.76% to 99,033.17

ENERGY:

The oil markets had a negative day today:

l Crude Oil decreased 3.37 USD/BBL or -3.37% to 96.510

l Brent decreased 2.79 USD/BBL or -2.61% to 104.13

l Natural gas decreased 0.02 USD/MMBtu or -0.25% to 7.9850

l Gasoline decreased 0.114 USD/GAL or -3.48% to 3.1614

l Heating oil decreased 0.0632 USD/GAL or -1.75% to 3.5411

The above data was collected around 14:13 EST on Thursday

  • Top commodity gainers: Methanol (1.91%), Platinum(1.37%), Palladium (1.37%) and Rhodium (2.35%)
  • Top commodity losers: Palm Oil (-5.46%), Gasoline (-3.48%), Lumber (-3.83%) and Crude Oil (-3.37%)

The above data was collected around 14:18 EST on Thursday.

BONDS:

Japan 0.237%(-0.6bp), US 2’s 3.12% (-0.129%), US 10’s 2.9300% (-10.6bps); US 30’s 3.08% (-0.087%), Bunds 1.2200% (-4bp), France 1.8090% (-2.6bp), Italy 3.6220% (+12.4bp), Turkey 16.82% (-11bp), Greece 3.583% (+12.5bp), Portugal 2.409% (+0.7bp); Spain 2.502% (+1.6bp) and UK Gilts 2.0470% (-9.4bp).

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