Market Talk – June 28, 2022

ASIA:

China’s Premier Li Keqiang said that China’s economy has recovered to some extent, but its foundation is not solid. Speaking to state media he further added that China will strive to drive the economy back onto a normal track and bring down the jobless rate as soon as possible. China’s nationwide survey-based jobless rate fell to 5.9% in May from 6.1% in April, still above the government’s 2022 target of below 5.5%. In particular, the surveyed jobless rate in 31 major cities picked up to 6.9%, the highest on record. Some economists expect employment to worsen before it gets better, with a record number of graduates entering the workforce in summer.

Fears of a global recession have gripped all markets alike, but the analysts have opined that recessions in advanced economies may benefit the Indian economy. “India being a net importer of commodities should benefit on the inflation front,” Samiran Chakraborty, managing director and chief economist for India at Citigroup, said in an interview with Bloomberg Television on Monday. He added that India would still face pressures from a global slowdown as it will crimp exports and economic growth. Worries around a recession have emerged as prominent central banks around the world like the US Federal Reserve, ECB are hiking interest rates aggressively to curb the surging inflationary pressures amid the ongoing war in Russia-Ukraine and the roll-back of pandemic-era measures.

The major Asian stock markets had a green day today:

  • NIKKEI 225 increased 178.20 points or 0.66% to 27,049.47
  • Shanghai increased 30.03 points or 0.89% to 3,409.21
  • Hang Seng increased 189.45 points or 0.85% to 22,418.97
  • ASX 200 increased 57.60 points or 0.86% to 6,763.60
  • Kospi increased 20.17 points or 0.84% to 2,422.09
  • SENSEX increased 16.17 points or 0.03% to 53,177.45
  • Nifty50 increased 18.15 points or 0.11% to 15,850.20
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The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00019 or 0.03% to 0.69220
  • NZDUSD decreased 0.00429 or -0.68% to 0.62571
  • USDJPY increased 0.74 or 0.55% to 136.133
  • USDCNY increased 0.01386 or 0.21% to 6.70526

Precious Metals:

l Gold decreased 1.02 USD/t oz. or -0.06% to 1,821.71

l Silver decreased 0.232 USD/t. oz or -1.10% to 20.910

No economic news from last night:

Some economic news from today:

Japan:

BoJ Core CPI (YoY) increased from 1.4% to 1.5%

EUROPE/EMEA:

The dollar climbed on Tuesday and the euro held below $1.06 as European Central Bank (ECB) President Christine Lagarde offered no fresh insight into the central bank’s policy outlook. The ECB is widely expected to follow its global peers by raising interest rates in July to try to check soaring inflation though economists are divided on the magnitude of any rate hike. The euro held below $1.06 after Lagarde said the central bank would move gradually but with the option to act decisively on any deterioration in medium-term inflation, especially if there were signs of a de-anchoring of inflation expectations.

The Gfk German consumer confidence survey showed on Tuesday that consumer sentiment in Europe’s largest economy is forecast to slide to a record low next month as the war in Ukraine and supply chain disruptions continue to drive food and energy prices higher. The index predicted confidence would decline to -27.4 in July from a revised figure of -26.2 in June. July’s figure is the lowest that has ever been measured by the index since it was created in 1991. German business morale also slumped in June amid worries that rising prices and gas shortages will continue to take a toll on the economy for the rest of the year. Based on a survey of around 9,000 firms, the Ifo business climate index released last week fell to 92.3 points in June from 93.0 points in May amid a gloomy outlook for the remainder of 2022.

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The major Europe stock markets had a green day:

l CAC 40 increased 38.71 points or 0.64% to 6,086.02

l FTSE 100 increased 65.09 points or 0.90% to 7,323.41

l DAX 30 increased 45.75 points or 0.35% to 13,231.82

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00411 or -0.39% to 1.05378
  • GBPUSD decreased 0.00537 or -0.44% to 1.22125
  • USDCHF increased 0.00035 or 0.04% to 0.95615

Some economic news from Europe today:

Germany:

GfK German Consumer Climate (Jul) decreased from -26.2 to -27.4

France:

French Consumer Confidence (Jun) decreased from 85 to 82

Italy:

Italian Industrial Sales (YoY) (Apr) increased from 21.60% to 22.00%

Italian Industrial Sales (MoM) (Apr) increased from 2.50% to 2.70%

US/AMERICAS:

Consumer confidence is falling in the US – no real explanation needed there. The consumer confidence index dropped to 98.7 in June from May’s revised reading of 103.2 (originally reported as 106.2), as reported by the Conference Board. The six-month outlook for income, labor, and business conditions fell to 66.4 in June, marking the lowest level on record since 2013.

Democratic Gov. Newsom of California is handling inflation by spending more federal funds. Around 23 million residents of California are slated to receive between $200 and $1,050 within the next year. This is part of Newsom’s $17 billion relief package, with $9.5 billion going directly to residents. Similar to the stimulus checks of the American Relief Package, those eligible must earn under $75,000 annually and the amount allotted will depend on income and dependents.

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US Market Closings:

  • Dow declined 491.27 points or -1.56% to 30,946.99
  • S&P 500 declined 78.54 points or -2.01% to 3,821.57
  • Nasdaq declined 343.01 points or -2.98% to 11,181.54
  • Russell 2000 declined 32.9 points or -1.86% to 1,738.84

Canada Market Closings:

  • TSX Composite declined 35.58 points or -0.18% to 19,222.74
  • TSX 60 declined 3.13 points or -0.27% to 1,166.4

Brazil Market Closing:

  • Bovespa declined 172.19 points or -0.17% to 100,591.41

ENERGY:

The oil markets had a mixed day today:

l Crude Oil increased 2.52 USD/BBL or 2.30% to 112.090

l Brent increased 2.93 USD/BBL or 2.55% to 118.02

l Natural gas increased 0.131 USD/MMBtu or 2.02% to 6.6320

l Gasoline increased 0.0812 USD/GAL or 2.12% to 3.9184

l Heating oil decreased 0.0529 USD/GAL or -1.25% to 4.1773

The above data was collected around 12:40 EST on Tuesday

l Top commodity gainers: Brent (2.55%), Crude Oil (2.30%), Orange Juice (5.47%) and Bitumen (2.36%)

l Top commodity losers: Coffee (-1.84%), Canola (-1.23%), Feeder Cattle (-1.23%) and Heating Oil (-1.25%)

The above data was collected around 12:51 EST on Tuesday.

BONDS:

Japan 0.235%(+0bp), US 2’s 3.12% (-0.007%), US 10’s 3.1923% (-0.17bps); US 30’s 3.30% (-0.002%), Bunds 1.630% (+8.6bp), France 2.1780% (+9.7bp), Italy 3.669% (+3.2bp), Turkey 18.46% (-5bp), Greece 3.889% (+3.2bp), Portugal 2.718% (+7.9bp); Spain 2.735% (+7.2bp) and UK Gilts 2.4720% (+7.7bp).

Original Article

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