Market Talk – July 1, 2022

ASIA:

China’s huge manufacturing and service industries have just experienced their first month of growth since February, as many cities lifted Covid restrictions, according to surveys released Thursday. But the shadow of further lockdowns still hangs over the world’s second-largest economy as Beijing sends mixed messages about the best way out of the Covid pandemic. The Chinese government’s Purchasing Managers’ Index (PMI) for manufacturing, which mainly covers large enterprises and state-owned companies, rose to 50.2 in June, the first time it has surpassed the 50 mark since February, according to the National Bureau of Statistics. A value above 50 indicates an increase in activity.

On the main Asian stock markets today was a negative day:

  • The NIKKEI 225 was down 457.42 points, or -1.73%, at 25,935.62.
  • Shanghai fell 10.98 points or -0.32% to 3,387.64.
  • Hang Sen closed
  • The ASX 200 was down 28.20 points or -0.43% at 6,539.90.
  • Kospi fell 27.22 points or -1.17% to 2,305.42.
  • SENSEX was down 111.01 points or -0.21% to 52,907.93.
  • Nifty50 fell 28.20 points or -0.18% to 15,752.05.

Today was a mixed day for the major Asian currency markets:

  • AUDUSD fell 0.01033 or -1.50% to hit 0.67950.
  • NZDUSD fell 0.00482 or -0.77% to hit 0.61928.
  • USDJPY fell 0.541 or -0.40% to hit 135.287.
  • USDCNY rose 0.00863 or 0.13% to hit 6.70143.

Precious metals:

  • Gold fell by $3.5/t. or -0.19% to 1,803.39
  • Silver fell by $0.439/t. ounces or -2.17% to 19,808

Some economic news from last night:

China:

The index of business activity in the manufacturing sector Caixin (June) increased from 48.1 to 51.7.

Japan:

The index of business activity in the manufacturing sector (June) did not change and amounted to 52.7.

The job/application ratio (May) increased from 1.23 to 1.24.

Tokyo Core Consumer Price Index (YoY) (June) increased from 1.9% to 2.1%.

Tokyo CPI (YoY) (June) fell from 2.4% to 2.3%.

CPI Tokyo Ex Food and Energy (MoM) (June) fell from 0.2% to -0.1%.

Unemployment rate (May) increased from 2.5% to 2.6%

Tankan All Big Industry (Q2) capital expenditure increased from 2.2% to 18.6%.

Tankan All Small Industry (Q2) capital expenditure increased from -11.4% to -1.4%.

Tankan Large Production Outlook Index (Q2) up from 9 to 10

Tankan (Q2) Major Producers Index Down from 14 to 9

Tankan Large Non-Manufacturers Diffusion Index (Q2) increased from 7 to 13

Tankan Large Non-Manufacturers (Q2) index increased from 9 to 13

South Korea:

Exports (y/y) (June) decreased from 21.3% to 5.4%.

Imports (YoY) (June) decreased from 32.0% to 19.4%

The trade balance (June) decreased from -1.71 billion to -2.47 billion.

The Nikkei Manufacturing PMI (June) fell from 51.8 to 51.3.

Australia:

AIG manufacturing index (June) increased from 52.4 to 54.0

Manufacturing PMI increased from 55.7 to 56.2.

New Zealand:

Building permits (MoM) (May) increased from -8.6% to -0.5%

Some economic news for today:

Australia:

Commodity prices (yoy) fell from 34.7% to 24.3%.

India:

Nikkei S&P Global Manufacturing PMI (June) fell from 54.6 to 53.9.

Growth of bank loans increased from 13.1% to 13.2%

Deposit growth decreased from 9.3% to 8.3%

Foreign exchange reserves in US dollars increased from $590.59 billion to $593.32 billion.

EUROPE/EEA:

The UK economy grew 0.8% qoq in the first three months of 2022, its lowest performance in a year and in line with preliminary estimates. The largest contribution was made by information and communication, as well as transport and storage, while the volume of production was mainly due to the growth in the volume of production; construction has increased. In addition, household final consumption expenditure rose by 0.6%, while gross fixed capital formation rose by a revised 3.8%. However, real household disposable income fell 0.2%, marking the fourth consecutive quarter of negative real disposable income growth. GDP remains 0.7% above its pre-pandemic level.

Europe’s major stock markets had a mixed day:

  • The CAC 40 rose 8.20 points, or 0.14%, to 5,931.06.
  • The FTSE 100 fell 0.63 points, or -0.01%, to 7,168.65.
  • The DAX 30 rose 29.26 points or 0.23% to 12,813.03.

Today was a mixed day in the major currency markets in Europe:

  • EURUSD fell 0.0068 or -0.65% to hit 1.04079.
  • GBPUSD fell 0.01055 or -0.87% to hit 1.20541.
  • USDCHF rose 0.00746 or 0.78% to hit 0.96236.

Some economic news from Europe today:

Spain:

The index of business activity in the manufacturing sector of Spain (June) fell from 53.8 to 52.6.

Swiss:

PMI procure.ch (June) fell from 60.0 to 59.1.

Italy:

The index of business activity in the manufacturing industry in Italy (June) fell from 51.9 to 50.9.

Italian CPI (MoM) (June) up from 0.8% to 1.2%

Italian CPI (YoY) (June) increased from 6.8% to 8.0%

Italy HICP (YoY) (June) increased from 7.3% to 8.5%

Italian HICP (MoM) (June) up from 0.9% to 1.2%

France:

The index of business activity in the manufacturing industry of France (June) fell from 54.6 to 51.4.

The balance of the state budget of France (May) decreased from -67.3 billion to -82.3 billion.

Germany:

The index of business activity in the manufacturing sector in Germany (June) fell from 54.8 to 52.0.

euro area:

Manufacturing PMI (June) fell from 54.6 to 52.1.

Core CPI (yoy) fell from 3.8% to 3.7%

The core consumer price index (MoM) fell from 0.5% to 0.2%.

CPI (mom) flat at 0.8%

CPI (YoY) (June) up from 8.1% to 8.6%

CPI, ns (June) increased from 116.07 to 117.00

HICP excluding energy and food (YoY) (June) increased from 4.4% to 4.6%.

HICP ex Energy and Food (mom) decreased from 0.7% to 0.4%.

GREAT BRITAIN:

Bank of England consumer credit (May) fell from 1.377 billion to 0.844 billion.

M4 money supply (MoM) (May) increased from 0.0% to 0.5%

Manufacturing PMI (June) fell from 54.6 to 52.8.

The number of approved mortgage loans (May) increased from 66.06 thousand to 66.16 thousand.

Mortgage lending (May) increased from 4.16 billion to 7.43 billion.

Net lending to individuals increased from 5.5 billion to 8.3 billion.

USA/AMERICA:

A recession is brewing. At least that’s what the latest data from the Atlanta Federal Reserve suggests. The bank cut its second-quarter GDP forecast to a -1% contraction. This comes after the US economy contracted by -1.6% in the first quarter, and by most measurements, two consecutive quarters of negative growth means the country is in recession territory.

White House allocates additional money to Ukraine for an account of $820 million

US Market Closing:

  • The Dow advanced 321.83 points or 1.05% or 31, -97.26.
  • The S&P 500 rose 39.95 points, up 1.06%, to 3825.33.
  • The Nasdaq added 99.11 points, or 0.9%, to 11,127.85 points.
  • Russell 2000 advanced 19.77 points or 1.16% to 1727.76.

Closing the Canadian Market:

  • The TSX Composite was down 216.28 points, or -1.14%, at 18,861.36.
  • The TSX 60 was down 13.66 points, or -1.18%, at 1146.43.

Brazil Market Closing:

  • Bovespa is up 411.95 points, or 0.42%, to 98,953.9 points.

ENERGY:

It was a green day in the oil markets today:

  • Crude oil rose $2.32/bbl. or 2.19% to 108,080.
  • Brent rose by $2.15 per barrel. or 1.97% to 111.18.
  • Natural gas rose $0.297/MMBtu or 5.48% to 5.7210
  • Gasoline rose $0.1294/gal, or 3.66%, to $3.6657.
  • Heating oil rose $0.1111/gallon, or 2.90%, to $3.9416.

The above data was collected around 12:47 pm EST on Friday.

  • Commodity growth leaders: natural gas (5.48%), gasoline (3.66%), heating oil (2.90%) and cotton (3.81%).
  • The main losers were oats (-3.93%), wheat (-3.77%), palm oil (-4.11%) and sugar (-4.04%).

The above data was collected around 12:56 pm EST on Friday.

BONDS:

Japan 0.221% (-0.4 bp), USA 2 2.83% (-0.092%), USA 10 2.8968% (-7.72 bp); US 30s 3.13% (+0.008%), bonds 1.243% (-12.5 bp), France 1.8110% (-14.6 bp), Italy 3.225% (-16.7 bp), Turkey 18.56% (+2bp), Greece 3.517% (-10.3bp), Portugal 2.319% (-13.8bp); Spain 2.291% (-17.1 bp) and UK gilts 2.0970% (-14.4 bp).