Market Talk – September 15, 2022

ASIA:

India’s merchandise trade deficit in August widened to $27.98 billion from $11.71 billion a year earlier, revised data released by the government showed on Wednesday. India’s merchandise exports rose to $33.92 billion from $33.38 billion

Japan ran its largest trade deficit in a month on record in August as imports surged amid high energy prices and a slumping yen, exposing the economy’s vulnerability to external price pressures. Imports jumped 49.9% in the year to August, driven by the cost of oil, coal and liquefied natural gas (LNG), causing the trade deficit to widen to ¥2.8173 trillion ($19.71 billion), the largest deficit on record. The rise in imports was larger than the median market forecast for a 46.7% rise in a Reuters poll, according to Treasury data, and outpaced a 22.1% year-on-year rise in exports in the same month. It was the 13th consecutive month of year-on-year deficits and was larger than the 2.3982 trillion-yen deficit expected in a Reuters poll. The widening trade deficit underscores the fragile nature of Japan’s economic recovery, which has so far remained largely intact despite the high price tag firms pay for imports, compounded by the yen’s fall to a 24-year low and growing prospects of a global slowdown.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 57.29 points or 0.21% to 27,875.91
  • Shanghai decreased 37.62 points or -1.16% to 3,199.92
  • Hang Seng increased 83.28 points or 0.44% to 18.930.38
  • Kospi decreased 9.59 points or -0.40% to 2,401.83
  • ASX 200 increased 14.30 points or 0.21% to 6,842.90
  • SENSEX decreased 412.96 points or -0.68% to 59,934.01
  • Nifty50 decreased 126.35 points or -0.70% to 17,877.40
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The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00293 or -0.43% to 0.67242
  • NZDUSD decreased 0.00161 or -0.27% to 0.59849
  • USDJPY increased 0.611 or 0.43% to 143.467
  • USDCNY increased 0.03412 or 0.49% to 7.00742

Precious Metals:

l Gold decreased 27.91 USD/t oz. or -1.65% to 1,667.88

l Silver decreased 0.406 USD/t. oz or -2.06% to 19.284

Some economic news from last night:

Japan:

Adjusted Trade Balance decreased from -2.16T to -2.37T

Exports (YoY) (Aug) increased from 19.0% to 22.1%

Trade Balance (Aug) decreased from -1,433.9B to -2,817.3B

Australia:

Employment Change (Aug) increased from -41.0K to 33.5K

Full Employment Change (Aug) increased from -86.9K to 58.8K

Unemployment Rate (Aug) increased from 3.4% to 3.5%

New Zealand:

GDP (QoQ) (Q2) increased from -0.2% to 1.7%

Some economic news from today:

Japan:

Tertiary Industry Activity Index (MoM) decreased from -0.4% to -0.6%

EUROPE/EMEA:

Banque de France Governor François Villeroy de Galhau said the European Central Bank could raise interest rates to almost 2% by the end of the year. Monetary policy normalization is “fully justified,” Villeroy de Galhau said at the Michel Camdessus Central Banking Lecture at IMF headquarters in Washington, DC on September 14. Eurozone inflation rose by 9.1% year-on-year in August, a record high. On September 8, the Governing Council of the ECB raised interest rates by 75%.

While headline inflation reached 9.1 percent in August and is expected to rise further, most indicators of long-term inflation expectations are still hovering around the ECB’s 2 percent target. However, recent revisions of some indicators above the target have raised concerns among policymakers, who have pledged to monitor developments closely. The ECB has faced criticism for reacting too slowly to rising prices. ECB Vice President De Guindos warned that the central bank must not compromise its credibility.

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The major Europe stock markets had a mixed day:

l CAC 40 decreased 64.57 points or -1.04% to 6,157.84

l FTSE 100 increased 4.77 points or 0.07% to 7,282.07

l DAX 30 decreased 71.34 points or -0.55% to 12,956.66

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00278 or 0.28% to 1.00100
  • GBPUSD decreased 0.00469 or -0.41% to 1.14976
  • USDCHF decreased 0.0029 or -0.30% to 0.95930

Some economic news from Europe today:

Germany:

German WPI (YoY) (Aug) decreased from 19.5% to 18.9%

German WPI (MoM) (Aug) increased from -0.4% to 0.1%

France:

French CPI (MoM) (Aug) increased from 0.3% to 0.5%

French HICP (MoM) (Aug) increased from 0.3% to 0.5%

Euro Zone:

Wages in euro zone (YoY) (Q2) increased from 3.7% to 4.1%

Trade Balance (Jul) decreased from -25.4B to -34.0B

US/AMERICAS:

Union leaders and the railroad companies agreed to a deal one day before the national rail strike was set to begin. Failure to reach a deal would have cost an estimated $2 billion pet day as 40% of America’s goods move by rail. Employees will now receive a 24% pay increase, as well as an immediate pay out of around $11,000 for past wages lost.

Mortgages in the US surpassed the 6% level this week. This is the first time that the 30-year fixed mortgage has reached 6% since 2008 during the Great Recession. Unsurprisingly, refinances continue to decline and fell 4% for the week and 83% YoY. Mortgage applications plummeted 29% YoY, down 0.2% for the week.

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US Market Closings:

  • Dow declined 173.27 points or -0.56% to 30,961.82
  • S&P 500 declined 44.66 points or -1.13% to 3,901.35
  • Nasdaq declined 167.32 points or -1.43% to 11,552.36
  • Russell 2000 declined 13.23 points or -0.72% to 1,825.23

Canada Market Closings:

  • TSX Composite declined 165.98 points or -0.84% to 19,560.16
  • TSX 60 declined 8.88 points or -0.75% to 1,182.1

Brazil Market Closing:

  • Bovespa declined 593.02 points or -0.54% to 109,953.65

ENERGY:

The oil markets had a negative day today:

l Crude Oil decreased 2.937 USD/BBL or -3.32% to 85.543

l Brent decreased 2.612 USD/BBL or -2.78% to 91.488

l Natural gas decreased 0.6529 USD/MMBtu or -7.16% to 8.4611

l Gasoline decreased 0.0866 USD/GAL or -3.43% to 2.4379

l Heating oil decreased 0.1688 USD/GAL or -5.00% to 3.2101

The above data was collected around 13:37 EST on Thursday

l Top commodity gainers: Methanol (4.53%), Orange Juice (1.52%), Cocoa (2.77%) and Aluminum (1.83%)

l Top commodity losers: Lumber (-5.38%), Natural Gas (-7.16%), Heating Oil (-5.00%) and Gasoline (-3.43%)

The above data was collected around 13:47 EST on Thursday

BONDS:

Japan 0.256%(+0.6bp), US 2’s 3.85% (+0.070%), US 10’s 3.4451% (+3.31bps); US 30’s 3.47% (+0.002%), Bunds 1.753% (+5.5bp), France 2.299% (+3.5bp), Italy 4.03% (+5bp), Turkey 11.20% (+8bp), Greece 4.268% (-1.3bp), Portugal 2.836% (+7.9bp); Spain 2.905% (+5.3bp) and UK Gilts 3.1660% (+3.2bp).

Original Article

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