Market Talk – July 5, 2022

ASIA:

India’s gold imports nearly tripled year-over-year in June due to price adjustments and jeweler restocking after strong sales during a key festival, Reuters reported. An increase in imports by the world’s second largest consumer of bullion could support underlying gold prices, but the rise could widen India’s trade deficit and put pressure on the weakened rupee. Local gold futures in June fell to almost the lowest level in three months. In May, India’s gold imports jumped 677% year-over-year to the highest level in a year, helping widen the country’s trade deficit and put pressure on the rupiah.

Today was a mixed day for major Asian stock markets:

  • The NIKKEI 225 was up 269.66 points or 1.03% at 26,423.47.
  • Shanghai fell 1.40 points or -0.04% to 3404.03.
  • Hang Seng rose 22.72 points or 0.10% to 21,853.07.
  • The ASX 200 rose 16.70 points, or 0.25%, to 6,629.30.
  • Kospi rose 41.44 points, or 1.80%, to 2,341.78.
  • SENSEX was down 100.42 points or -0.19% to 53,134.35.
  • Nifty50 fell 24.50 points or -0.15% to 15,810.85.

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

  • AUDUSD fell 0.01068 or -1.55% to hit 0.67697.
  • NZDUSD fell 0.00648 or -1.04% to hit 0.61402.
  • USDJPY shed 0.18 or -0.13% to hit 135,745.
  • USDCNY rose 0.02342 or 0.35% to hit 6.71732.

Precious metals:

l Gold fell by $44.53/t. or -2.46% to 1764.59

l Silver fell by $0.800/t. ounces or -4.01% to 19,154

Some economic news from last night:

China:

The Caixin Services PMI (June) increased from 41.4 to 54.5.

Japan:

Average cash income (yoy) decreased from 1.3% to 1.0%

Total employee wage income (May) fell from 1.3% to 1.0%

Overtime pay (YoY) (May) decreased from 5.90% to 5.50%.

The index of business activity in the service sector (June) fell from 54.2 to 54.0.

South Korea:

Foreign exchange reserves in US dollars (June) decreased from 447.71 billion to 438.28 billion dollars.

CPI (YoY) (June) increased from 5.4% to 6.0%

CPI (MoM) (June) down from 0.7% to 0.6%

Australia:

Construction index AIG (June) fell from 50.4 to 46.2.

Services PMI fell from 53.2 to 52.6.

Retail sales (MoM) flat at 0.9%

New Zealand:

ANZ Commodity Price Index (MoM) up from -4.3% to -0.4%

NZIER business confidence (Q2) declined from -40% to -65%.

NZIER QSBO’s second quarter capacity utilization decreased from 97.1% to 93.4%.

Some economic news for today:

Australia:

RBA interest rate decision (July) increased from 0.85% to 1.35%

India:

Nikkei Services PMI (June) rose from 58.9 to 59.2.

Singapore:

Retail sales (MoM) (May) increased from 1.1% to 1.8%

Retail sales (YoY) (May) increased from 12.1% to 17.8%

New Zealand:

The GlobalDairyTrade price index fell from -1.3% to -4.1%.

EUROPE/EEA:

The dollar stampede amid growing risks of a global recession has left other currencies hurt and hurt, with the euro trampled on more than most as rising gas prices in Europe heighten fears about economic growth. The euro is seen as particularly vulnerable given the heavy dependence of Germany, Italy and other countries on Russian gas, as well as fears that a significant increase in European Central Bank rates could trigger another debt crisis in the eurozone. The euro has lost 10% against the dollar this year and at $1.0238 is close to the psychologically important parity point it last saw in mid-2002 when it was just three years old. Rising gas prices and warnings of a significant cut in supplies from Russia are raising fears of a major energy crisis in Europe this winter.

The main stock markets in Europe had a negative day:

  • CAC 40 fell 159.69 points or -2.68% to 5794.96.
  • The FTSE 100 fell 207.18 points or -2.86% to 7,025.47.
  • The DAX 30 was down 372.18 points, or -2.91%, at 12,401.20.

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

  • EURUSD fell 0.01827, or -1.75%, to hit 1.02486.
  • GBPUSD fell 0.01886 or -1.56% to hit 1.19280.
  • USDCHF rose 0.00821 or 0.85% to hit 0.96931.

Some economic news from Europe today:

France:

French Industrial Production (MoM) (May) Up From -0.3% To 0.0%

The French index of business activity S&P Global Compopo (June) fell from 56.1 to 52.5.

PMI in the French services sector (June) fell from 58.3 to 53.9.

Spain:

PMI in the Spanish services sector (June) fell from 56.5 to 54.0.

The consumer confidence index in Spain fell from 76.0 to 65.8.

Italy:

Composite PMI of Italy (June) fell from 52.4 to 51.3.

PMI in the Italian services sector (June) fell from 53.7 to 51.6.

Government deficit in Italy (Q1) increased from 3.0% to 9.0%.

Germany:

Composite PMI of Germany (June) fell from 53.7 to 51.3.

The index of business activity in the service sector in Germany (June) fell from 55.0 to 52.4.

euro area:

S&P Global Composite PMI (June) fell from 54.8 to 52.0.

Services business activity index (June) fell from 56.1 to 53.0

GREAT BRITAIN:

Composite PMI (June) increased from 53.1 to 53.7.

The index of business activity in the services sector (June) increased from 53.4 to 54.3.

USA/AMERICA:

US Treasury Secretary Janet Yellen admitted that removing tariffs from China will not help fight inflation. “I think some cuts can be justified and could help bring down the prices of burdensome things people are buying,” Yellen said. “I want to make it clear that, frankly, I don’t see tariff policy as a panacea for inflation.” Yesterday, Yellen spoke with Chinese Vice Premier Liu He to discuss the potential removal of some tariffs, although Yellen has criticized China for what she sees as an “unfair, non-market” economy.

US Market Closing:

  • The Dow was down 129.44 points, or -0.42%, at 30,967.82.
  • The S&P 500 rose 6.06 points, or 0.16%, to 3831.39.
  • The Nasdaq rose 194.39 points, or 1.75%, to 11,322.24.
  • Russell 2000 rose 13.57 points or 0.79% to 1741.33.

Closing the Canadian market:

  • The TSX Composite was down 194.7 points, or -1.02%, at 18,834.16.
  • The TSX 60 edged down 8.21 points or -0.71% to hit 1147.46.

Brazil Market Closing:

  • Bovespa was down 314.12 points or -0.32% to 98,294..64.

ENERGY:

The oil markets had a negative day today:

  • Crude oil fell by 10.21 dollars per barrel. or -9.42% to 98,220
  • Brent fell by 11.83 dollars per barrel. or -10.42% to 101.67.
  • Natural gas fell $0.402/mbtu, or -6.87%, to 5.4490.
  • Gasoline fell by 0.3591 USD/GAL or -9.81% to 3.3022.
  • Fuel oil fell $0.314/gal, or -7.98%, to $3.6230.

The above data was collected around 13:48 EST on Tuesday.

l Leaders of commodity positions growth: bitumen (0.54%), palladium (0.63%), lean pigs (2.44%).

The biggest losers in commodities: Brent (-10.42%), gasoline (-9.81%), crude oil (-9.42%) and fuel oil (-7.98%).

The above data was collected around 13:58 EST on Tuesday.

BONDS:

Japan 0.220% (+0.1 bp), 2.82% (-0.106%), US 10 2.8000% (-13.72 bp); US 30s 3.01% (-0.150%), bonds 1.186% (-15.1 bp), France 1.7970% (-13.9 bp), Italy 3.271% (-7.6 bp), Turkey 18.25% (-31 bp), Greece 3.386% (-15.3 bp), Portugal 2.334% (-8.6 bp); Spain 2.325% (-8.9 bp) and UK gilts 2.0530% (-14.4 bp).