Market Talk – July 27, 2022

ASIA:

Singapore’s sovereign wealth fund GIC reported steady returns for the year but warned of “deep uncertainties” as investors face concerns over inflation, pandemic risks and geopolitical challenges. The fund’s portfolio posted an annualized nominal dollar return of 7% over the 20-year period ending March 31, 2022, GIC said in its annual report released on Wednesday. GIC – a private firm wholly owned by the Singapore government – manages Singapore’s reserves together with the Monetary Authority of Singapore and state investor Temasek Holdings. The fund said the shift to a higher inflation environment will have significant investment implications.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 60.54 points or 0.22% to 27,715.75
  • Shanghai decreased 1.68 points or -0.05% to 3,275.76
  • Hang Seng decreased 235.84 points or -1.13% to 20,670.04
  • ASX 200 increased 15.90 points or 0.23% to 6,823.20
  • Kospi increased 2.57 points or 0.11% to 2,415.53
  • SENSEX increased 547.83 points or 0.99% to 55,816.32
  • Nifty50 increased 157.95 points or 0.96% to 16,641.80

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00225 or -0.32% to 0.69275
  • NZDUSD decreased 0.00288 or -0.46% to 0.62042
  • USDJPY increased 0.319 or 0.23% to 137.284
  • USDCNY decreased 0.00509 or -0.08% to 6.76101

Precious Metals:

l Gold increased 3.90 USD/t oz. or 0.23% to 1,717.54

l Silver increased 0.066 USD/t. oz or 0.35% to 18.659

Some economic news from last night:

China:

Chinese Industrial profit (YoY) (Jun) increased from -6.50% to 0.80%

Chinese Industrial profit YTD (Jun) remain the same at 1.0%

South Korea:

Consumer Confidence (Jul) decreased from 96.4 to 86.0

Australia:

CPI (QoQ) (Q2) decreased from 2.1% to 1.8%

CPI (YoY) (Q2) increased from 5.1% to 6.1%

CPI Index Number (Q2) increased from 123.90 to 126.10

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Trimmed Mean CPI (QoQ) (Q2) increased from 1.4% to 1.5%

Trimmed Mean CPI (YoY) (Q2) increased from 3.7% to 4.9%

Weighted mean CPI (YoY) (Q2) increased from 3.2% to 4.2%

Weighted mean CPI (QoQ) (Q2) increased from 1.0% to 1.4%

Some economic news from today:

Japan:

Coincident Indicator (MoM) decreased from 0.0% to -1.9%

Leading Index (MoM) decreased from 2.1% to -1.7%

Leading Index decreased from 102.9 to 101.2

EUROPE/EMEA:

The International Monetary Fund has warned that Britain has the slowest growth of the richest G7 economies next year. It predicts UK growth will fall to just 0.5% in 2023, much lower than the 1.2% forecast in April. The IMF cut its global growth forecast for 2022 to just 3.2% and warned that the slowdown could be even more severe. It said fast-rising prices are to blame for much of the slowdown, with households and businesses squeezed by a combination of higher prices and higher borrowing costs as policymakers raise interest rates to try to counter inflation. The probability of a recession in the G7 economies – Canada, France, Germany, Italy, Japan, the US, and the UK – is now around 15% – almost four times higher than usual.

Spain has raised its inflation forecasts for 2022 and 2023 and lowered its economic growth target for 2023, Economy Minister Nadia Calvino said on Tuesday, citing the war in Ukraine for its continued negative impact on European economies. The inflation target was raised to 7.8% in 2022 from the previous 6.1% planned in April, while for 2023 it was revised upwards to 2.9% from 2.2%. Annual inflation in Spain topped 10% for the first time in 37 years in June, driven by rising energy and food prices, prompting the government to raise its expectations for consumer prices. The country’s statistics office is due to release second-quarter GDP growth later this week. The International Monetary Fund also revised its growth forecast for Spain to 4% in 2022 from 4.8%. The IMF expects two percent growth in 2023.

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The major Europe stock markets had a green day:

  • CAC 40 increased 46.49 points or 0.75% to 6,257.94
  • FTSE 100 increased 41.95 points or 0.57% to 7,348.23
  • DAX 30 increased 69.45 points or 0.53% to 13,166.38

The major Europe currency markets had a green day today:

  • EURUSD increased 0.00031 or 0.03% to 1.01333
  • GBPUSD increased 0.00201 or 0.17% to 1.20565
  • USDCHF increased 0.00157 or 0.16% to 0.96417

Some economic news from Europe today:

Germany:

GfK German Consumer Climate (Aug) decreased from -27.7 to -30.6

France:

French Consumer Confidence (Jul) decreased from 82 to 80

Italy:

Italian Business Confidence (Jul) decreased from 109.5 to 106.7

Italian Consumer Confidence (Jul) decreased from 98.3 to 94.8

Swiss:

ZEW Expectations (Jul) increased from -72.7 to -57.2

Euro Zone:

M3 Money Supply (YoY) (Jun) increased from 5.6% to 5.7%

Loans to Non Financial Corporations (Jun) increased from 5.8% to 6.8%

Private Sector Loans (YoY) remain the same at 4.6%

US/AMERICAS:

The Federal Reserve has raised rated by 75 bps (2.25%-2.5%) for the consecutive meeting in an effort to fight inflation. Recent indicators of spending and production have softened,” the statement began, changed from last month’s statement opener of an optimistic tone stating economic activity was picking up. The central bank noted in this month report that there is a dramatic increase in food prices, whereas only energy was mentioned previously. All members unanimously approved the rate hike.

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The Fed’s balance sheet continues to lighten at a moderate pace. The total has declined $16 billion since it began reducing holdings of its $9 trillion balance sheet. The current cap stands at $47.5 billion but is expected to rise to $95 billion per month by September. The Federal Open Market Committee will not meet again until September. However, they will gather at the annual retreat this August in Jackson Hole.

US Market Closings:

  • Dow advanced by 434.46 points or 1.37% to 32,196.00
  • S&P 500 advanced 102.27 points or 2.61% to 4,023.32
  • Nasdaq advanced 469.85 points or 4.06% to 12,032.42
  • Russell 2000 advanced 43.09 points or 2.39% to 1,848.34

Canada Market Closings:

  • TSX Composite advanced 281.88 points or 1.49% to 19,254.56
  • TSX 60 advanced 16.83 points or 1.47% to 1,165.43

Brazil Market Closing:

  • Bovespa advanced 1,666.27 points or 1.67% to 101,437.96

ENERGY:

The oil markets had a mixed day today:

  • Crude Oil increased 2.78 USD/BBL or 2.93% to 97.715
  • Brent increased 2.35 USD/BBL or 2.25% to 106.887
  • Natural gas decreased 0.299 USD/MMBtu or -3.32% to 8.7068
  • Gasoline increased 0.0538 USD/GAL or 1.60% to 3.4040
  • Heating oil increased 0.1185 USD/GAL or 3.31% to 3.6991

The above data was collected around 13:55 EST on Wednesday

  • Top commodity gainers: Soybeans (2.98%), Heating Oil(3.31%), Crude Oil (2.93%) and Orange Juice (5.65%)
  • Top commodity losers: Cocoa (-2.12%), Wheat (-1.90%), Lumber (-1.98%) and Natural Gas (-3.32%)

The above data was collected around 14:02 EST on Wednesday.

BONDS:

Japan 0.203%(-0.1bp), US 2’s 3.06% (+0.020%), US 10’s 2.7685% (-1.85bps); US 30’s 3.01% (+0.0001%), Bunds 0.9430% (+1.5bp), France 1.5370% (+1.2bp), Italy 3.426% (+8.5bp), Turkey 17.37% (+64bp), Greece 3.036% (+6.2bp), Portugal 2.107% (+6.1bp); Spain 2.185% (+6.7bp) and UK Gilts 1.9600% (+4.2bp).

Original Article

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