Market Talk – September 14, 2022

ASIA:

China’s central bank carried out 2-billion-yuan (about $289 million) worth of reverse repos on Wednesday to maintain liquidity in the banking system. The interest rate for the seven-day reverse repo was set at 2 percent, according to the People’s Bank of China. The aim of this step is to maintain stable liquidity in the banking system, the central bank said. A reverse repo is a process in which a central bank purchases securities from commercial banks through a tender process with an agreement to resell them in the future.

The Reserve Bank of India may raise interest rates by another 50 basis points this month after data showed inflation rose further above the central bank’s tolerance limit in August, analysts said. India’s retail inflation rose to 7.0% in August from 6.71% in the previous month, data released on Monday showed. The August data was slightly higher than the 6.9% expected by economists polled by Reuters. Higher food inflation contributed to the overall rate increase. Core CPI rose 6.17% in August, according to Barclays calculations.

The major Asian stock markets had a negative day today:

  • NIKKEI 225 decreased 796.01 points or -2.78% to 27,818.62
  • Shanghai decreased 26.26 points or -0.80% to 3,237.54
  • Hang Seng decreased 479.76 points or -2.48% to 18.847.10
  • Kospi decreased 38.12 points or -1.56% to 2,411.42
  • ASX 200 decreased 181.10 points or -2.58% to 6,828.60
  • SENSEX decreased 224.11 points or -0.37% to 60,346.97
  • Nifty50 decreased 66.30 points or -0.37% to 18,003.75

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00132 or 0.20% to 0.67533
  • NZDUSD increased 0.00195 or 0.33% to 0.60155
  • USDJPY decreased 1.501 or -1.04% to 142.889
  • USDCNY decreased 0.0119 or -0.17% to 6.96970
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Precious Metals:

Gold increased 1.07 USD/t oz. or 0.06% to 1,702.62

Silver increased 0.34 USD/t. oz or 1.76% to 19.660

Some economic news from last night:

Japan:

Reuters Tankan Index (Sep) decreased from 13 to 10

Core Machinery Orders (MoM) (Jul) increased from 0.9% to 5.3%

Core Machinery Orders (YoY) (Jul) increased from 6.5% to 12.8%

New Zealand:

Current Account (YoY) (Q2) decreased from -23.27B to -27.82B

Current Account (QoQ) (Q2) increased from -6.50B to -5.22B

Current Account % of GDP (Q2) decreased from -6.50% to -7.70%

Some economic news from today:

Japan:

Capacity Utilization (MoM) (Jul) decreased from 9.6% to 2.4%

Industrial Production (MoM) (Jul) decreased from 9.2% to 0.8%

India:

WPI Food (YoY) (Aug) increased from 10.77% to 12.37%

WPI Fuel (YoY) (Aug) decreased from 43.75% to 33.67%

WPI Inflation (YoY) (Aug) decreased from 13.93% to 12.41%

WPI Manufacturing Inflation (YoY) (Aug) decreased from 8.16% to 7.51%

Exports (USD) (Aug) increased from 33.00B to 33.92B

Imports (USD) (Aug) increased from 61.68B to 61.90B

Trade Balance (Aug) increased from -28.68B to -27.98B

Australia:

HIA New Home Sales (MoM) decreased from -13.1% to -16.0%

EUROPE/EMEA:

The Bank of England is preparing to clash with Liz Truss over EU-era banking regulations, as differences between Westminster and Threadneedle Street widen. The Prudential Regulation Authority (PRA) opposes any significant weakening of the so-called Basel rulebook, which was introduced in the wake of the 2008 financial crisis and dictates capital requirements for banks, The Telegraph reported. The PRA is due to launch a consultation on the final package of post-crisis banking reforms, known as Basel 3.1, by the end of the year and is likely to insist on a thorough implementation of the rules. The move is likely to face criticism from city bosses and the finance ministry, which is embarking on a deregulatory drive under Chancellor Kwasi Kwarteng. The European Union is determined to relax its own Basel set of rules and diverge in certain key areas, meaning British banks could be forced to implement stricter standards than continental rivals.

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The major Europe stock markets had a negative day:

  • CAC 40 decreased 23.28 points or -0.37% to 6,222.41
  • FTSE 100 decreased 108.56 points or -1.47% to 7,277.30
  • DAX 30 decreased 160.95 points or -1.22% to 13,028.00

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00206 or 0.21% to 0.99987
  • GBPUSD increased 0.0069 or 0.60% to 1.15708
  • USDCHF decreased 0.00064 or -0.07% to 0.96066

Some economic news from Europe today:

UK:

Nationwide HPI (YoY) increased from 7.8% to 15.5%

CPI (YoY) (Aug) decreased from 10.1% to 9.9%

CPI (MoM) (Aug) decreased from 0.6% to 0.5%

PPI Input (MoM) (Aug) decreased from 0.0% to -1.2%

Euro Zone:

Industrial Production (MoM) (Jul) decreased from 1.1% to -2.3%

Industrial Production (YoY) (Jul) decreased from 2.2% to -2.4%

US/AMERICAS:

The producer price index in the US fell this August by 0.1%, according to the Bureau of Labor Statistics. This figure was in line with analysts’ expectations. Removing volatile food, energy, and trade, PPO rose 0.2%. On an annual basis, headline PPI advanced 8.7%, marking the lowest rise recorded since August 2021. Core PPI rose 5.6& YoY, a figure not seen since June of last year. Energy was primarily responsible for the monthly decline after falling 6% for the month, and the gas index fell 12.7%. Wholesale services rose 0.4% last month, as did final demand service prices.

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US Market Closings:

  • Dow advanced 30.12 points or 0.1% to 31,135.09
  • S&P 500 advanced 13.32 points or 0.34% to 3,946.01
  • Nasdaq advanced 86.1 points or 0.74% to 11,719.68
  • Russell 2000 advanced 6.89 points or 0.38% to 1,838.46

Canada Market Closings:

  • TSX Composite advanced 80.74 points or 0.41% to 19,726.14
  • TSX 60 advanced 3.77 points or 0.32% to 1,190.98

Brazil Market Closing:

  • Bovespa declined 247.29 points or -0.2% to 110,546.67

ENERGY:

The oil markets had a mixed day today:

Crude Oil increased 2.629 USD/BBL or 3.01% to 89.939

Brent increased 2.565 USD/BBL or 2.75% to 95.735

Natural gas increased 0.5256 USD/MMBtu or 6.34% to 8.8096

Gasoline increased 0.0696 USD/GAL or 2.81% to 2.5500

Heating oil decreased 0.1217 USD/GAL or -3.44% to 3.4196

The above data was collected around 12:27 EST on Wednesday

Top commodity gainers: Natural Gas (6.34%), Crude Oil (3.01%), Platinum (3.33%) and Palladium (2.92%)

Top commodity losers: Lumber (-5.02%), Oat (-14.61%), Heating Oil (-3.44%) and Soybeans (-3.70%)

The above data was collected around 12:34 EST on Wednesday

BONDS:

Japan 0.25%(+0.5bp), US 2’s 3.79% (+0.034%), US 10’s 3.412% (-1.1bps); US 30’s 3.49% (-0.018%), Bunds 1.715% (-0.9bp), France 2.275% (-1.5bp), Italy 3.994% (+0.4bp), Turkey 11.12% (+1bp), Greece 4.254% (+2.8bp), Portugal 2.798% (+2.5bp); Spain 2.87% (+0.6bp) and UK Gilts 3.1430% (-2.8bp).

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