Market Talk – August 5, 2019

ASIA:

The major Asian stock markets had a negative day today:

  • Shanghai decreased 46.34 points or -1.62% to 2,821.50
  • Kospi decreased 51.15 points or -2.56% to 1,946.98
  • ASX 200 decreased 128.30 points or -1.90% to 6,640.30
  • NIKKEI 225 decreased 366.87 points or -1.74% to 20,720.29
  • Hang Seng decreased 767.26 points or -2.85% to 26,151.32
  • SENSEX decreased 418.38 points or -1.13% to 36,699.84

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.0033 or 0.48% to 0.6766
  • NZDUSD decreased 0.0002 or 0.03% to 0.6538
  • USDJPY decreased 0.5080 or 0.48% to 106.0720
  • USDCNY increased 0.1238 or 1.77% to 7.0987

Precious Metals:

  • Gold increased 25.5 USD/t oz. or 1.77% to 1,468.94
  • Silver increased 0.2 USD/t. oz or 1.23% to 16.4307

Some economic news from last night:

South Korea:

  • FX Reserves – USD (Jul) increased from 403.07B to 403.11B

Australia:

  • AIG Services Index (Jul) decreased from 52.2 to 43.9
  • Services PMI decreased from 52.6 to 52.3
  • MI Inflation Gauge (MoM) increased from 0.0% to 0.3%

New Zealand:

  • ANZ Commodity Price Index (MoM) increased from -3.9% to -1.4%

Japan:

  • Services PMI (Jul) decreased from 51.9 to 51.8

Hong Kong:

  • Manufacturing PMI (Jul) decreased from 47.9 to 43.8

China:

  • Caixin Services PMI (Jul) decreased from 52.0 to 51.6

Some economic news from today:

India:

  • Nikkei Services PMI (Jul) increased from 49.6 to 53.8

Indonesia:

  • GDP (QoQ) (Q2) increased from -0.52% to 4.20%
  • GDP (YoY) (Q2) decreased from 5.07% to 5.05%

EUROPE/EMEA:

The major Europe stock markets had a negative day today:

  • CAC 40 decreased 117.44 points or -2.19% to 5,241.55
  • FTSE 100 decreased 183.21 points, or -2.47% to 7,223.85
  • DAX decreased 213.93 points or -1.80% to 11,658.51

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.0096 or 0.86% to 1.1203
  • GBPUSD decreased 0.0012 or 0.10% to 1.2142
  • USDCHF decreased 0.0084 or 0.86% to 0.9736

Some economic news from Europe:

Swiss:

  • SECO Consumer Climate (Q3) increased from -9 to -8
  • Retail Sales (YoY) (Jun) increased from -1.1% to 0.7%

Spain:

  • Spanish Services PMI (Jul) decreased from 53.6 to 52.9
  • Spanish Consumer Confidence decreased from 102.3 to 97.0

Italy:

  • Italian Composite PMI (Jul) increased from 50.1 to 51.0
  • Italian Services PMI (Jul) increased from 50.5 to 51.7

France:

  • French Markit Composite PMI (Jul) increased from 51.7 to 51.9
  • French Services PMI (Jul) increased from 52.2 to 52.6

Germany:

  • German Composite PMI (Jul) decreased from 51.4 to 50.9
  • German Services PMI (Jul) decreased from 55.4 to 54.5

Eurozone:

  • Markit Composite PMI (Jul) remain the same at 51.5
  • Services PMI (Jul) decreased from 53.3 to 53.2
  • Sentix Investor Confidence (Aug) decreased from -5.8 to -13.7

UK:

  • Composite PMI (Jul) increased from 49.7 to 50.7
  • Services PMI (Jul) increased from 50.2 to 51.4

Norway:

  • House Price Index (YoY) (Jul) decreased from 2.60% to 1.60%

U.S./AMERICAS:

China has retaliated against the U.S. for placing an additional 10% tariff on $300 billion worth of Chinese goods. First, China allowed the yuan to fall below seven to the dollar to counter the tariffs. The People’s Bank of China, however, denies artificially lowering the yuan and claims it was “driven and determined by the market.” Second, and possibly most damaging to the overall trade negotiations, China has announced that they will cease purchasing U.S. agricultural products. During the G20 summit and at the most recent face-to-face negotiations, China reaffirmed their promise to purchase more U.S. agricultural products. Trump responded this Monday by stating, “China dropped the price of their currency to an almost a historic low. It’s called “currency manipulation.” Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!”

China’s actions caused the largest equity sell-off of the year, and the Federal Reserve responded by stating that they are closely monitoring economic conditions. “I am certainly monitoring developments for their implications for the outlook and I will continue to be very attentive to them,” Federal Reserve Governor Lael Brainard stated this Monday. Brainard stated that the Fed is “committed to sustaining economic expansion” and many took that as a sign that further rate cuts are not completely off the table.

In the aftermath of two deadly mass shootings over the weekend, President Trump is appealing to lawmakers to make hate crimes and mass shootings punishable by death. Trump appealed for “capital punishment [to] be delivered quickly, decisively, and without years of needless delay.” In the past eight months, 251 mass shootings have occurred across the U.S. All federal government buildings will fly the flag at half-staff this week to honor the victims.

U.S. Market Closings:

  • The Dow declined 767.27 points or -2.90% to 25,717.74
  • S&P 500 declined 87.31 points or -2.98% to 2,844.74
  • Nasdaq declined 278.03 points or -3.47% to 7,726.04
  • Russell 2000 declined 46.25 points or -3.02% to 1,487.41

Canada Market Closings:

  • TSX Composite declined 105.38 points or -0.64% to 16,271.66
  • TSX 60 declined 7.30 points or -0.75% to 969.49

Brazil Market Closing:

  • Bovespa declined 2,575.93 points or -2.51% to 100,097.75

ENERGY:

The oil markets had a mixed day today:

  • Crude Oil decreased 0.96 USD/BBL or -1.72% to 54.8112
  • Brent decreased 2.07 USD/BBL or -3.34% to 59.8763
  • Natural gas decreased 0.044 USD/MMBtu or -2.07% to 2.0812
  • Gasoline decreased 0.0625 USD/GAL or -3.51% to 1.7211
  • Heating oil decreased 0.0508 USD/GAL or -2.69% to 1.8386
  • Top commodity gainers: Lean Hogs (2.16%), Gold (1.96%), Corn (1.56%), and Platinum (1.54%)
  • Top commodity losers: Lumber (-3.78 %), Gasoline (-3.59%), Brent (-3.39%), and Coffee (-2.75%)

The above data was collected around 15:05 EST on Monday.

BONDS:

Japan -0.19%(-3bp), US 2’s 1.58% (-14bps), US 10’s 1.74%(-12bps), US 30’s 2.30%(-10bps), Bunds -0.52% (-3bp), France -0.24% (-1bp), Italy 1.57% (+3bp), Turkey 15.12% (+10bp), Greece 2.06% (-49bp), Portugal 0.30% (-0bp), Spain 0.25% (-0bp) and UK Gilts 0.50% (-5bp).

  • US 3-Month Bill Auction decreased from 2.070% to 1.990%
  • US 6-Month Bill Auction decreased from 2.035% to 1.950%
  • French 3-Month BTF Auction decreased from -0.541% to -0.561%
  • French 6-Month BTF Auction decreased from -0.589% to -0.658%
  • French 12-Month BTF Auction increased from -0.650% to -0.645%
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