Market Talk – July 29, 2022

ASIA:

Japan’s central bank forecast inflation would exceed its target this year in new forecasts on Thursday but kept interest rates ultra-low, signaling its determination to remain an outlier in a wave of global central bank policy tightening. BOJ Governor Haruhiko Kuroda brushed off the chance of policy tightening in the near future, saying he had “absolutely no plan” to raise interest rates or raise the implicit 0.25% ceiling set for the bank’s 10-year bond yield target. As widely expected, the BOJ kept its -0.1% target for short-term rates, and its target for 10-year bond yields around 0%.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 13.84 points or -0.05% to 27,801.64
  • Shanghai decreased 29.34 points or -0.89% to 3,253.24
  • Hang Seng decreased 466.17 points or -2.26% to 20,156.51
  • ASX 200 increased 55.50 points or 0.81% to 6,945.20
  • Kospi increased 16.23 points or 0.67% to 2,451.50
  • SENSEX increased 712.46 points or 1.25% to 57,570.25
  • Nifty50 increased 228.65 points or 1.35% to 17,158.25

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00231 or -0.33% to 0.69745
  • NZDUSD decreased 0.00214 or -0.34% to 0.62676
  • USDJPY decreased 1.129 or -0.84% to 133.324
  • USDCNY increased 0.01283 or 0.19% to 6.75623

Precious Metals:

l Gold increased 9.06 USD/t oz. or 0.52% to 1,767.80

l Silver increased 0.221 USD/t. oz or 1.10% to 20.186

Some economic news from last night:

China:

FDI (Jun) increased from 17.30% to 17.40%

Japan:

Jobs/applications ratio (Jun) increased from 1.24 to 1.27

Tokyo Core CPI (YoY) (Jul) increased from 2.1% to 2.3%

Tokyo CPI (YoY) (Jul) increased from 2.3% to 2.5%

CPI Tokyo Ex Food and Energy (MoM) (Jul) increased from -0.1% to 0.3%

Unemployment Rate (Jun) remain the same at 2.6%

Industrial Production (MoM) (Jun) increased from -7.5% to 8.9%

Industrial Production forecast 1m ahead (MoM) (Jul) decreased from 12.0% to 3.8%

Industrial Production forecast 2m ahead (MoM) (Aug) increased from 2.5% to 6.0%

Retail Sales (YoY) (Jun) decreased from 3.7% to 1.5%

South Korea:

Industrial Production (MoM) (Jun) increased from 0.2% to 1.9%

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Industrial Production (YoY) (Jun) decreased from 7.4% to 1.4%

Retail Sales (MoM) decreased from -0.2% to -0.9%

Australia:

Housing Credit (Jun) remain the same at 0.6%

PPI (YoY) (Q2) increased from 4.9% to 5.6%

PPI (QoQ) (Q2) decreased from 1.6% to 1.4%

Private Sector Credit (MoM) (Jun) increased from 0.8% to 0.9%

Some economic news from today:

India:

Federal Fiscal Deficit (Jun) increased from 2,039.21B to 3,518.71B

Bank Loan Growth decreased from 14.4% to 14.0%

Deposit Growth decreased from 9.8% to 8.4%

FX Reserves, USD decreased from 580.25B to 571.56B

Infrastructure Output (YoY) (Jun) decreased from 19.3% to 12.7%

Japan:

Construction Orders (YoY) (Jun) decreased from 19.5% to 15.5%

Household Confidence (Jul) decreased from 32.1 to 30.2

Housing Starts (YoY) (Jun) increased from -4.3% to -2.2%

Hong Kong:

M3 Money Supply (Jun) decreased from -0.1% to -2.8%

EUROPE/EMEA:

Last Thursday, the European Central Bank raised interest rates for the first time in 11 years to cool down rampant inflation in the eurozone. The ECB, the central bank of the 19 countries that share the euro currency, surprised markets by raising its benchmark rate by 50 basis points, bringing its deposit rate to zero. Traders had expected a smaller increase of 25 basis points. The euro rose to a session high, trading at $1.0257 on news of more aggressive rate hikes. The yield on Italy’s 10-year bond also jumped on reports, extending gains after reacting to Prime Minister Mario Draghi’s resignation on Thursday.

The major Europe stock markets had a green day:

  • CAC 40 increased 109.29 points or 1.72% to 6,448.50
  • FTSE 100 increased 78.18 points or 1.06% to 7,423.43
  • DAX 30 increased 201.94 points or 1.52% to 13,484.05

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00199 or 0.20% to 1.02104
  • GBPUSD decreased 0.00127 or -0.10% to 1.21579
  • USDCHF decreased 0.00235 or -0.25% to 0.95245

Some economic news from Europe today:

France:

French Consumer Spending (MoM) (Jun) decreased from 0.4% to 0.2%

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French GDP (QoQ) (Q2) increased from -0.2% to 0.5%

French GDP (YoY) decreased from 4.8% to 4.2%

French CPI (YoY) increased from 5.8% to 6.1%

French CPI (MoM) decreased from 0.7% to 0.3%

French HICP (MoM) decreased from 0.9% to 0.3%

French HICP (YoY) increased from 6.5% to 6.8%

Germany:

German Import Price Index (MoM) (Jun) increased from 0.9% to 1.0%

German Import Price Index (YoY) (Jun) decreased from 30.6% to 29.9%

German Unemployment Change (Jul) decreased from 132K to 48K

German Unemployment Rate (Jul) increased from 5.3% to 5.4%

German Unemployment (Jul) increased from 2.417M to 2.463M

German Unemployment n.s.a. (Jul) increased from 2.363M to 2.470M

German GDP (QoQ) (Q2) decreased from 0.8% to 0.0%

German GDP (YoY) (Q2) decreased from 3.9% to 1.5%

Swiss:

KOF Leading Indicators (Jul) decreased from 95.2 to 90.1

Retail Sales (YoY) (Jun) increased from -1.3% to 1.2%

Spain:

Spanish CPI (YoY) increased from 10.2% to 10.8%

Spanish CPI (MoM) decreased from 1.9% to -0.2%

Spanish GDP (YoY) (Q2) remain the same at 6.3%

Spanish GDP (QoQ) (Q2) increased from 0.2% to 1.1%

Spanish HICP (YoY) (Jul) increased from 10.0% to 10.8%

Spanish Current account (May) increased from -0.48B to 2.85B

Italy:

Italian CPI (MoM) (Jul) decreased from 1.2% to 0.4%

Italian CPI (YoY) (Jul) decreased from 8.0% to 7.9%

Italian HICP (YoY) (Jul) decreased from 8.5% to 8.4%

Italian HICP (MoM) (Jul) decreased from 1.2% to -1.1%

Italian PPI (MoM) (Jun) increased from 0.6% to 1.0%

Italian PPI (YoY) (Jun) decreased from 34.6% to 34.1%

UK:

BoE Consumer Credit (Jun) increased from 0.903B to 1.781B

M4 Money Supply (MoM) (Jun) decreased from 0.6% to -0.3%

Mortgage Approvals (Jun) decreased from 65.68K to 63.73K

Mortgage Lending (Jun) decreased from 8.04B to 5.27B

Net Lending to Individuals decreased from 8.9Bto 7.1B

Euro Zone:

CPI (YoY) (Jul) increased from 8.6% to 8.9%

CPI (MoM) decreased from 0.8% to 0.1%

CPI, n.s.a (Jul) increased from 117.01 to 117.14

GDP (QoQ) increased from 0.6% to 0.7%

GDP (YoY) decreased from 5.4% to 4.0%

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HICP ex Energy & Food (YoY) (Jul) increased from 4.6% to 5.0%

HICP ex Energy and Food (MoM) decreased from 0.4% to 0.1%

US/AMERICAS:

Additional alarming data was released today regarding the US economy. The personal consumption expenditures price index spiked 6.8% this June, marking the largest rise since January 1982. Core PCE rose 4.8% YoY and 0.6% MoM. This is one of the main tools the Federal Open Market Committee uses to make monetary policy decision. At the beginning of month, the consumer price index jumped 9.1%, and this PCE reading further indicates that prices have become unsustainable.

Personal consumption expenditures in the US rose 1.1% last month, surpassing estimates by 0.9%. Adjusted for inflation, real spending rose only 0.1% as the American consumers struggles to keep up with rising prices. Personal income rose 0.6% for the month, but disposable income declined -0.3% when adjusted for inflation.

US Market Closings:

  • Dow advanced 315.5 points or 0.97% to 32,845.13
  • S&P 500 advanced 57.86 points or 1.42% to 4,130.29
  • Nasdaq advanced 228.1 points or 1.88% to 12,390.69
  • Russell 2000

Canada Market Closings:

  • TSX Composite
  • TSX 60

Brazil Market Closing:

  • Bovespa

ENERGY:

The oil markets had a mixed day today:

l Crude Oil increased 2.09 USD/BBL or 2.17% to 98.313

l Brent increased 2.68 USD/BBL or 2.50% to 110.017

l Natural gas decreased 0.076 USD/MMBtu or -0.93% to 8.0671

l Gasoline increased 0.0609 USD/GAL or 1.76% to 3.5318

l Heating oil decreased 0.0374 USD/GAL or -1.01% to 3.6545

The above data was collected around 13:53 EST on Friday

l Top commodity gainers: Steel (3.85%), Palm Oil(8.39%), Canola (2.99%) and Zinc (4.44%)

l Top commodity losers: Wheat (-1.74%), Rhodium (-1.37%), Lumber (-2.20%) and Oat (-1.45%)

The above data was collected around 14:00 EST on Friday.

BONDS:

Japan 0.175%(-2.9bp), US 2’s 2.89% (+0.014%), US 10’s 2.6379% (-4.31bps); US 30’s 2.99% (-0.051%), Bunds 0.8250% (+2.4bp), France 1.3790% (+0.5bp), Italy 3.148% (-10.2bp), Turkey 17.15% (-3bp), Greece 2.973% (+2.9bp), Portugal 1.879% (-2.6bp); Spain 1.945% (-2.7bp) and UK Gilts 1.8620% (-0.4bp).

Original Article

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