Market Talk – August 5, 2022

ASIA:

China continued military exercises near Taiwan and launched drones near Japan on Friday, escalating cross-strait tensions that threatened to escalate after Taipei hosted US House Speaker Nancy Pelosi on a historic visit. Taiwan’s defense ministry said Chinese warships and aircraft were continuing to exercise in the waters around the island, adding that Chinese People’s Liberation Army (PLA) forces crossed the median line – halfway between the island and mainland China – in a move called “a highly provocative act “. “. On Thursday, two Chinese drones flew over Japan’s Okinawa Prefecture, prompting the country’s air defense self-defense to respond with fighter jets, Tokyo’s defense ministry said in a statement on Friday.

Major Asian stock markets had a green day today:

  • The NIKKEI 225 rose 243.67 points, or 0.87%, to trade at 28,175.87.
  • Shanghai added 37.99 points or 1.19% to 3227.03.
  • The Hang Seng rose 27.90 points, or 0.14%, to 20,201.94.
  • The ASX 200 rose 40.70 points or 0.58% to hit 7015.60.
  • Kospi rose 17.69 points or 0.72% to 2490.80.
  • SENSEX increased by 89.13 points or 0.15% to 58,387.93.
  • Nifty50 advanced 15.50 points or 0.09% to 17,397.50.

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

  • AUDUSD fell 0.00583 or -0.84% ​​to hit 0.69034.
  • NZDUSD dropped 0.0063 or -1.00% to hit 0.62390.
  • USDJPY rose 2,523 or 1.90% to hit 135,269.
  • USDCNY rose 0.01743 or 0.26% to hit 6.76783.

Precious metals:

l Gold fell by $18.31/t. or -1.02% to 1772.77

l Silver fell by $0.310/t. ounce or -1.54% to 19.841

Some economic news from last night:

Japan:

Average cash income (yoy) increased from 1.0% to 2.2%.

Household spending (MoM) (June) increased from -1.9% to 1.5%

Household spending (YoY) (June) increased from -0.5% to 3.5%

Total employee payroll income (June) increased from 1.0% to 2.2%

Overtime pay (Y/Y) (June) increased from 5.50% to 5.80%

Foreign exchange reserves (USD) (July) increased from 1,311.3 billion to 1,323.0 billion.

South Korea:

The current account (June) increased from 3.86 billion to 5.61 billion.

Australia:

The AIG Services Index (July) increased from 48.8 to 51.7.

Some economic news for today:

India:

The cash reserve ratio remains unchanged at 4.50%.

Interest rate decision increased from 4.90% to 5.40%

Reverse REPO rate remains unchanged at 3.35%

Foreign exchange reserves in US dollars increased from $571.56 billion to $573.88 billion.

Japan:

Concurrence indicator (MoM) (June) increased from -1.9% to 4.1%

The leading index fell from 101.2 to 100.6.

Leading index (MoM) (June) increased from -1.7% to -0.6%

Hong Kong:

Foreign exchange reserves (USD) (July) decreased from 447.20 billion to 441.70 billion.

Singapore:

Retail sales (MoM) (June) decreased from 1.8% to -1.4%.

Retail sales (YoY) (June) decreased from 17.8% to 14.8%

EUROPE/EMEA:

The Bank of England has warned that the UK will fall into recession as interest rates have been raised the most in 27 years. The economy is expected to contract in the last three months of this year and continue to contract until the end of 2023. Interest rates have risen to 1.75% as the bank struggles to contain price increases and inflation is now above 13%. Bank Governor Andrew Bailey said he has “great sympathy and great understanding for those who struggle the most” with the cost of living. Now rates have risen to 1.75%, homeowners with a typical mortgage will have to pay £52 more per month. Those with standard floating rate mortgages will see an increase of £59.

There was a negative day on the main European stock markets:

l CAC 40 decreased by 41.04 points or -0.63% to 6,472.35.

l The FTSE 100 was down 8.32 points, or -0.11%, at 7,439.74.

l DAX 30 fell 88.75 points or -0.65% to 13,573.93.

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

  • EURUSD fell 0.0068 or -0.66% to hit 1.01797.
  • GBPUSD fell 0.00803 or -0.66% to hit 1.20768.
  • USDCHF rose 0.00749 or 0.78% to hit 0.96239.

Some economic news from Europe today:

GREAT BRITAIN:

The Halifax House Price Index (YoY) fell from 12.5% ​​to 11.8%.

Halifax House Price Index (MoM) (July) fell from 1.4% to -0.1%.

Germany:

German Industrial Production (MoM) (June) increased from -0.1% to 0.4%.

France:

France’s current account (June) increased from -3.70 billion to -1.60 billion.

French exports (June) increased from 48.2 to 49.7 billion tons.

Imports to France (June) increased from 61.1 billion to 62.8 billion.

French Industrial Production (MoM) (June) Up From 0.2% To 1.4%

Non-farm wages in France (QoQ) (Q2) increased from 0.3% to 0.5%

France’s total reserve assets (July) increased from 240,187.0 million to 241,892.0 million.

France’s trade balance (June) fell from -12.9 billion to -13.1 billion.

Spain:

Spain’s industrial production (YoY) (June) rose from 4.5% to 7.0%.

Italy:

Italian industrial production (MoM) (June) fell from -1.1% to -2.1%.

Industrial production in Italy (y/y) (June) decreased from 3.4% to -1.2%.

USA/AMERICANS:

The US Bureau of Labor Statistics (BLS) released an upbeat employment report on Friday. Non-farm payrolls increased by 528,000 in July, beating expectations of 258,000, lowering the unemployment rate from 3.6% to 3.5%. Wage growth was up 0.5% MoM and 5.2% YoY. Leisure and hospitality showed the most notable growth after adding 96,000 jobs, followed by business services with 89,000. Health services grew by 70,000 positions, government grew by 57,000, and construction increased by 32,000. This is the strongest report on wages since February of this year.

US Market Closing:

  • The Dow rose 74.69 points or 0.23% to 32,801.51.
  • The S&P 500 was down 6.87 points, or -0.17%, at 4,145.07.
  • The Nasdaq fell 63.02 points or -0.5% to 12,657.56.
  • Russell 2000 advanced 15.37 points or 0.81% to 1921.82.

Closing the Canadian market:

  • The TSX Composite advanced 43.09 points, or 0.22%, to 19,620.13.
  • The TSX 60 edged up 2.19 points or 0.18% to hit 1186.24.

Brazil Market Closing:

  • Bovespa climbed 579.7 points, or 0.55%, to 106,471.92 points.

ENERGY:

Oil markets have had a mixed day today:

l Crude oil rose $1.25/bbl. or 1.41% to 89.703.

l The price of Brent crude rose $1.5/bbl, or 1.59%, to $95.436.

l Natural gas rose $0.066/MMBtu, or 0.81%, to 8.1923.

l Gasoline rose $0.0782/gallon, or 2.80%, to 2.8677.

l Heating oil was down $0.0627/gal or -1.88% to 3.2688.

The above data was collected around 12:52 pm EST on Friday.

l The largest increases in commodity prices: gasoline (2.80%), sugar (2.22%), palladium (3.15%) and oats (2.16%).

l The main losers were cocoa (-1.62%), coffee (-4.13%), lumber (-4.06%) and heating oil (-1.88%).

The above data was collected around 13:00 EST on Friday.

CONNECTION:

Japan 0.165% (+0 bp), 2-s. USA 3.24% (+0.201%), 10-str. USA 2.8360% (+16 bp); US 30s 3.07% (+0.113%), Bunds 0.9440% (+13.5 bp), France 1.4950% (+13.3 bp), Italy 3.03% (+8.4 bp) , Turkey 16.45% (-27 bp), Greece 3.052% (+ 7.5 bp), Portugal 1.970% (+13.2 bp); Spain 2.046% (+13.6 bp) and UK gilts 2.0350% (+14.8 bp).