Market Talk – September 23, 2022

ASIA:

The Reserve Bank of India is set to raise interest rates again next week with a slim majority of economists in a Reuters poll expecting a half-point hike and some others expecting a smaller 35 basis point rise. The RBI has lagged many of its global peers, despite inflation sticking above the top end of its target range of 2-6% all year. It has raised rates in three separate moves since May, one of them unscheduled, totaling 140 basis points and taking the key repo rate to 5.40%. The U.S. Federal Reserve just delivered its third straight 75 basis point hike and has shown no signs of slowing down, sending the dollar index to a new two-decade high and more downward pressure on the rupee.

The major Asian stock markets had a negative day today:

  • NIKKEI 225 closed
  • Shanghai decreased 20.54 points or -0.66% to 3,088.37
  • Hang Seng decreased 214.68 points or -1.18% to 17.933.27
  • Kospi decreased 42.31 points or -1.81% to 2,290.00
  • ASX 200 decreased 125.50 points or -1.87% to 6,574.70
  • SENSEX decreased 1,020.80 points or -1.73% to 58,098.92
  • Nifty50 decreased 302.45 points or -1.72% to 17,327.35

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.01025 or -1.54% to 0.65424
  • NZDUSD decreased 0.0085 or -1.45% to 0.57620
  • USDJPY increased 0.798 or 0.56% to 143.147
  • USDCNY increased 0.04926 or 0.70% to 7.12886

Precious Metals:

  • Gold decreased 24.28 USD/t oz. or -1.45% to 1,646.25
  • Silver decreased 0.738 USD/t. oz or -3.76% to 18.912
Related:  Market Talk - July 7, 2022

Some economic news from last night:

South Korea:

PPI (MoM) (Aug) decreased from 0.3% to -0.3%

PPI (YoY) (Aug) decreased from 9.2% to 8.4%

Australia:

Manufacturing PMI increased from 53.8 to 53.9

Services PMI increased from 50.2 to 50.4

New Zealand:

Westpac Consumer Sentiment (Q3) increased from 78.7 to 87.6

Some economic news from today:

India:

Bank Loan Growth increased from 15.5% to 16.2%

Deposit Growth remain the same at 9.5%

FX Reserves, USD decreased from 550.87B to 545.65B

Singapore:

Core CPI (YoY) (Aug) increased from 4.80% to 5.10%

CPI (YoY) (Aug) increased from 7.0% to 7.5%

EUROPE/EMEA:

A day after the Bank of England said the UK was likely already in recession, the newly formed government announced a sweeping round of tax cuts and investment incentives aimed at taking Britain out of a cycle of stagnation and into a new era of higher economic growth. In a mini-budget on Friday, new finance minister Kwasi Kwarteng revealed tax cuts for more than 31 million people in just a few months, saying the current 45 percent income tax rate is “currently higher than the main top rate in G7 countries such as the US and Italy.” Meanwhile, the British pound fell 1.94 percent to a new low of $1.1044 for the first time since 1985 – from $1.22 last month and $1.40 last year – as traders continued to move to buy the US dollar.

The major Europe stock markets had a negative day:

  • CAC 40 decreased 135.09 points or -2.28% to 5,783.41
  • FTSE 100 decreased 140.92 points or -1.97% to 7,018.60
  • DAX 30 decreased 247.44 points or -1.97% to 12,284.19
Related:  Market Talk - May 26, 2022

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.01303 or -1.32% to 0.97082
  • GBPUSD decreased 0.03719 or -3.30% to 1.08892
  • USDCHF increased 0.00426 or 0.44% to 0.98096

Some economic news from Europe today:

Spain:

Spanish GDP (YoY) (Q2) increased from 6.7% to 6.8%

Spanish GDP (QoQ) (Q2) increased from -0.2% to 1.5%

France:

French Manufacturing PMI (Sep) decreased from 50.6 to 47.8

French S&P Global Composite PMI (Sep) increased from 50.4 to 51.2

French Services PMI (Sep) increased from 51.2 to 53.0

Germany:

German Composite PMI (Sep) decreased from 46.9 to 45.9

German Manufacturing PMI (Sep) decreased from 49.1 to 48.3

German Services PMI (Sep) decreased from 47.7 to 45.4

UK:

Composite PMI decreased from 49.6 to 48.4

Manufacturing PMI increased from 47.3 to 48.5

Services PMI decreased from 50.9 to 49.2

CBI Distributive Trades Survey (Sep) decreased from 37 to -20

Euro Zone:

Manufacturing PMI (Sep) decreased from 49.6 to 48.5

S&P Global Composite PMI (Sep) decreased from 48.9 to 48.2

Services PMI (Sep) decreased from 49.8 to 48.9

US/AMERICAS:

Wall Street closed in the red; the Dow reached a new 52-week low after dipping under 30,000. The sell-off continued this Friday after the Fed’s midweek rate hike coupled with numerous central banks following suit due to global inflation. In addition to the 75 bps raise, the Federal Reserve’s announcement that rates could reach 4.6% in 2023 spooked the markets. Additionally, unemployment in the US is expected to rise 0.7% to 4.4% next year. Recessionary fears are not limited to America at this time.

Related:  Market Talk - September 29, 2022

US Market Closings:

  • Dow declined 486.27 points or -1.62% to 29,590.41
  • S&P 500 declined 64.76 points or -1.72% to 3,693.23
  • Nasdaq declined 198.88 points or -1.8% to 10,867.93
  • Russell 2000 declined 42.72 points or -2.48% to 1,679.59

Canada Market Closings:

  • TSX Composite declined 521.7 points or -2.75% to 18,480.98
  • TSX 60 declined 30.21 points or -2.62% to 1,122.61

Brazil Market Closing:

  • Bovespa declined 2,354.48 points or -2.06% to 111,716.00

ENERGY:

The oil markets had a negative day today:

  • Crude Oil decreased 4.53 USD/BBL or -5.43% to 78.960
  • Brent decreased 4.367 USD/BBL or -4.83% to 86.093
  • Natural gas decreased 0.2091 USD/MMBtu or -2.95% to 6.8799
  • Gasoline decreased 0.1276 USD/GAL or -5.07% to 2.3881
  • Heating oil decreased 0.1707 USD/GAL or -5.00% to 3.2408

The above data was collected around 13:15 EST on Friday

  • Top commodity gainers: Orange Juice (1.68%) and Steel (1.02%)
  • Top commodity losers: Oat (-5.36%), Heating Oil (-5.00%), Gasoline (-5.07%) and Crude Oil (-5.43%)

The above data was collected around 13:23 EST on Friday.

BONDS:

Japan 0.235%(-2bp), US 2’s 4.17% (+0.046%), US 10’s 3.6707% (-3.73bps); US 30’s 3.59% (-0.051%), Bunds 2.031% (+5.3bp), France 2.603% (+7.2bp), Italy 4.360% (+18.3bp), Turkey 11.32% (+0p), Greece 4.540% (+6.3bp), Portugal 3.09% (+8bp); Spain 3.199% (+7.8bp) and UK Gilts 3.8290% (+33.4bp).

Original Article

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