Market Talk – July 29, 2022

ASIA:

Japan’s central bank had forecast inflation this year in new forecasts on Thursday but kept interest rates ultra-low, signaling its determination to stay out of the wave of global central bank tightening. Bank of Japan Governor Haruhiko Kuroda shrugged off the possibility of policy tightening in the near future, saying he has “absolutely no plans” to raise interest rates or raise the implicit 0.25% ceiling set for the bank’s 10-year bond yield target. As expected, the Bank of Japan maintained its target of -0.1% for short-term rates and its target for 10-year yields near 0%.

Today was a mixed day for major Asian stock markets:

  • The NIKKEI 225 was down 13.84 points, or -0.05%, at 27,801.64.
  • Shanghai fell 29.34 points or -0.89% to 3253.24.
  • Hang Seng was down 466.17 points or -2.26% to 20,156.51.
  • The ASX 200 rose 55.50 points, or 0.81%, to 6,945.20.
  • Kospi rose 16.23 points or 0.67% to 2451.50.
  • SENSEX increased by 712.46 points or 1.25% to 57,570.25.
  • Nifty50 increased by 228.65 points or 1.35% to 17,158.25.

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

  • AUDUSD fell 0.00231 or -0.33% to hit 0.69745.
  • NZDUSD fell 0.00214 or -0.34% to hit 0.62676.
  • USDJPY fell 1.129 or -0.84% ​​to hit 133.324.
  • USDCNY rose 0.01283 or 0.19% to hit 6.75623.

Precious metals:

l Gold rose by $9.06/t. or 0.52% up to 1767.80

l Silver rose by $0.221/t. ounce or 1.10% to 20.186

Some economic news from last night:

China:

FDI (June) increased from 17.30% to 17.40%

Japan:

The job/application ratio (June) increased from 1.24 to 1.27.

Tokyo Core CPI (YoY) (July) increased from 2.1% to 2.3%

Tokyo Consumer Price Index (YoY) (July) increased from 2.3% to 2.5%.

Tokyo Ex Food and Energy Consumer Price Index (MoM) (July) increased from -0.1% to 0.3%.

Unemployment rate (June) remains the same at 2.6%

Industrial production (MoM) (June) increased from -7.5% to 8.9%

Industrial production forecast 1 month ahead (MoM) (July) decreased from 12.0% to 3.8%

Industrial production forecast 2 months ahead (MoM) (August) raised from 2.5% to 6.0%

Retail sales (YoY) (June) decreased from 3.7% to 1.5%

South Korea:

Industrial production (MoM) (June) rose from 0.2% to 1.9%

Industrial production (y/y) (June) decreased from 7.4% to 1.4%

Retail sales (MoM) fell from -0.2% to -0.9%

Australia:

Housing loan (June) remains the same at 0.6%

Producer price index (YoY) (Q2) increased from 4.9% to 5.6%

PPI (QoQ) (Q2) decreased from 1.6% to 1.4%

Credit to the private sector (MoM) (June) increased from 0.8% to 0.9%.

Some economic news for today:

India:

The federal budget deficit (June) increased from 2,039.21 billion to 3,518.71 billion.

The growth of bank loans decreased from 14.4% to 14.0%.

Deposit growth decreased from 9.8% to 8.4%

Foreign exchange reserves in US dollars decreased from $580.25 billion to $571.56 billion.

Infrastructure output (YoY) (June) decreased from 19.3% to 12.7%

Japan:

Construction orders (YoY) (June) fell from 19.5% to 15.5%

Family Confidence (July) reduced from 32.1 to 30.2.

The number of housing commissionings (y/y) (June) increased from -4.3% to -2.2%

Hong Kong:

M3 money supply (June) decreased from -0.1% to -2.8%

EUROPE/EMEA:

Last Thursday, the European Central Bank raised interest rates for the first time in 11 years to ease runaway inflation in the eurozone. The ECB, the central bank of 19 euro-using countries, surprised markets by raising its base rate by 50 basis points, bringing the deposit rate to zero. Traders were expecting a 25 basis point slower gain. The euro surged to a session high, trading at $1.0257 on news of a more aggressive rate hike. Italy’s 10-year bond yield also jumped on reports, boosting gains after responding to Prime Minister Mario Draghi’s resignation on Thursday.

Major European stock markets had a green day:

  • CAC 40 increased by 109.29 points or 1.72% to 6,448.50.
  • The FTSE 100 rose 78.18 points, or 1.06%, to 7,423.43.
  • The DAX 30 was up 201.94 points or 1.52% at 13,484.05.

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

  • EURUSD rose 0.00199 or 0.20% to hit 1.02104.
  • GBPUSD fell 0.00127 or -0.10% to hit 1.21579.
  • USDCHF shed 0.00235 or -0.25% to hit 0.95245.

Some economic news from Europe today:

France:

French consumer spending (MoM) (June) fell from 0.4% to 0.2%.

French GDP (QoQ) (Q2) increased from -0.2% to 0.5%

French GDP (y/y) fell from 4.8% to 4.2%.

French CPI (YoY) increased from 5.8% to 6.1%

French CPI (MoM) fell from 0.7% to 0.3%.

HICP in France (MoM) decreased from 0.9% to 0.3%.

HICP in France (YoY) increased from 6.5% to 6.8%.

Germany:

German Import Price Index (MoM) (June) Up From 0.9% To 1.0%

Import price index in Germany (y/y) (June) decreased from 30.6% to 29.9%.

The change in unemployment in Germany (July) decreased from 132 thousand to 48 thousand.

The unemployment rate in Germany (July) increased from 5.3% to 5.4%.

Unemployment in Germany (July) increased from 2.417 million to 2.463 million.

Unemployment in Germany (July) increased from 2.363 million to 2.470 million.

German GDP (QoQ) (Q2) decreased from 0.8% to 0.0%

German GDP YoY (Q2) down from 3.9% to 1.5%

Switzerland:

Leading indicators KOF (July) fell from 95.2 to 90.1.

Retail sales (YoY) (June) increased from -1.3% to 1.2%

Spain:

Spanish CPI (YoY) increased from 10.2% to 10.8%

Spanish CPI (MoM) fell from 1.9% to -0.2%.

Spanish GDP YoY (Q2) Flat at 6.3%

Spain’s GDP (QoQ) (Q2) increased from 0.2% to 1.1%

Spain’s HICP (YoY) (July) increased from 10.0% to 10.8%

Spain’s current account (May) increased from -0.48 billion to 2.85 billion.

Italy:

Italian CPI (MoM) (July) fell from 1.2% to 0.4%.

Italian CPI (YoY) (July) down from 8.0% to 7.9%

Italian HICP YoY (July) down from 8.5% to 8.4%

Italy’s HICP (MoM) (July) fell from 1.2% to -1.1%.

Italy Producer Price Index (MoM) (June) Up From 0.6% To 1.0%

Italian Producer Price Index (YoY) (June) fell from 34.6% to 34.1%.

GREAT BRITAIN:

Bank of England consumer credit (June) increased from 0.903 billion to 1.781 billion.

M4 money supply (MoM) (June) decreased from 0.6% to -0.3%.

The number of approved mortgage loans (June) decreased from 65.68 thousand to 63.73 thousand.

Mortgage lending (June) decreased from 8.04 billion to 5.27 billion.

Net lending to individuals decreased from 8.9 billion to 7.1 billion.

Euro area:

CPI (YoY) (July) increased from 8.6% to 8.9%

CPI (mom) fell from 0.8% to 0.1%

CPI, ns (July) increased from 117.01 to 117.14.

GDP (q/q) increased from 0.6% to 0.7%

GDP (y/y) decreased from 5.4% to 4.0%

HICP ex Energy & Food (YoY) (July) increased from 4.6% to 5.0%

HICP ex Energy and Food (mom) decreased from 0.4% to 0.1%.

USA/AMERICANS:

Today were published additional alarming data on the US economy. The personal consumption price index jumped 6.8% in June this year, the biggest increase since January 1982. Underlying PCE rose 4.8% year on year and 0.6% month on month. It is one of the main tools that the Federal Open Market Committee uses to make monetary policy decisions. At the beginning of the month, the consumer price index jumped 9.1%, and this PCE reading also indicates that prices have become volatile.

US personal consumption spending rose 1.1% last month, up 0.9% from estimates. Adjusted for inflation, real spending rose just 0.1% as US consumers struggled to keep up with rising prices. Personal income rose 0.6% MoM, but disposable income declined 0.3% on an inflation-adjusted basis.

US Market Closing:

  • The Dow rose 315.5 points, or 0.97%, to 32,845.13.
  • The S&P 500 rose 57.86 points, or 1.42%, to 4130.29.
  • The Nasdaq rose 228.1 points or 1.88% to 12,390.69.
  • Russell 2000

Closing the Canadian market:

Brazil Market Closing:

ENERGY:

Oil markets have had a mixed day today:

l Crude oil rose $2.09/bbl, or 2.17%, to $98.313.

l Brent crude rose $2.68/bbl, or 2.50%, to $110.017.

l Natural gas was down $0.076/mbtu, or -0.93%, to 8.0671.

l Gasoline rose $0.0609 per gallon, or 1.76%, to $3.5318.

l Heating oil fell $0.0374/gallon, or -1.01%, to 3.6545.

The above data was collected around 13:53 EST on Friday.

l Commodity growth leaders: steel (3.85%), palm oil (8.39%), rapeseed (2.99%) and zinc (4.44%).

l The main losers were wheat (-1.74%), rhodium (-1.37%), lumber (-2.20%) and oats (-1.45%).

The above data was collected around 2:00 PM EST on Friday.

CONNECTION:

Japan 0.175% (-2.9 bp), 2-s. US 2.89% (+0.014%), 10s USA 2.6379% (-4.31 bp); US 30s 2.99% (-0.051%), Bunds 0.8250% (+2.4 bp), France 1.3790% (+0.5 bp), Italy 3.148% (-10.2 bp), Turkey 17.15% (-3 bp), Greece 2.973% (+2.9 bp), Portugal 1.879% (-2.6 bp); Spain 1.945% (-2.7 bp) and UK gilts 1.8620% (-0.4 bp).