Market Talk – November 29, 2019

ASIA:

The US signed the Human Rights and Democracy Act into law, which requires the US to continue to monitor Chinese actions regarding Hong Kong citizen’s rights and freedoms. China issued the US a stern warning that if it continues to support a pro-democracy movement in Hong Kong, they will take “firm counter-measures.” The Chinese foreign ministry stated yesterday that the US was distorting the truth and disregarding the facts.

Hong Kong leader Carrie Lam is currently in Thailand in an attempt to bolster the ties between the two nations. She was iterating that the city is functioning well under the one country, two system rule of law.

Indian Prime Minister Modi has set a target for the country to be a 5 trillion USD GDP economy by 2024.

The major Asian stock markets had a negative day today:

• Shanghai decreased 17.71 points or -0.61% to 2,871.98
• Kospi decreased 30.64 points or -1.45% to 2,087.96
• ASX 200 decreased 18.00 points or -0.26% to 6,846.00
• NIKKEI 225 decreased 115.23 points or -0.49% to 23,293.91
• Hang Seng decreased 547.24 points or -2.03% to 26,346.49
• SENSEX decreased 336.36 points or -0.82% to 40,793.81

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.0006 or -0.09% to 0.67619
• NZDUSD decreased 0.0003 or -0.05% to 0.64160
• USDJPY decreased 0.0840 or -0.08% to 109.43
• USDCNY increased 0.0005 or 0.01% to 7.0308

Precious Metals:

Gold increased 7.76 USD/t oz. or 0.53% to 1,465.04

Silver increased 0.10 USD/t. oz or 0.58%% to 17.0259

Some economic news from last night:

Japan:

Jobs/applications ratio (Oct) remain the same at 1.57

Tokyo Core CPI (YoY) (Nov) increased from 0.5% to 0.6%

Tokyo CPI (YoY) (Nov) increased from 0.4% to 0.8%

CPI Tokyo Ex Food and Energy (MoM) (Nov) decreased from 0.3% to 0.0%

Unemployment Rate (Oct) remain the same at 2.4%

Industrial Production (MoM) (Oct) decreased from 1.7% to -4.2%

Industrial Production forecast 1m ahead (MoM) (Nov) decreased from 0.6% to -1.5%

Industrial Production forecast 2m ahead (MoM) (Dec) increased from -1.2% to 1.1%

South Korea:

Interest Rate Decision (Nov) remain the same at 1.25%

Industrial Production (MoM) (Oct) decreased from 2.0% to -1.7%

Industrial Production (YoY) (Oct) decreased from 0.4% to -2.5%

Retail Sales (MoM) increased from -2.2% to -0.5%

Service Sector Output (MoM) (Oct) increased from -1.3% to 0.3%

Indonesia:

M2 Money Supply (YoY) (Oct) decreased from 7.10% to 6.30%

Loans (YoY) (Sep) decreased from 8.59% to 6.53%

SIngapore:

Bank Lending (Oct) increased from 684.5B to 689.4B

Australia:

Housing Credit (Oct) increased from 0.2% to 0.3%

Private Sector Credit (MoM) (Oct) decreased from 0.2% to 0.1%

HIA New Home Sales (MoM) decreased from 5.7% to -0.5%

New Zealand:

Building Consents (MoM) (Oct) decreased from 7.4% to -1.1%

Some economic news from today:

Hong Kong:

M3 Money Supply (Oct) increased from 1.8% to 2.7%

Japan:

Construction Orders (YoY) (Oct) increased from -6.8% to 6.4%

Household Confidence (Nov) increased from 36.2 to 38.7

Housing Starts (YoY) (Oct) decreased from -4.9% to -7.4%

India:

Federal Fiscal Deficit (Oct) increased from 6,515.54B to 7,204.45B

FX Reserves, USD increased from 448.25B to 448.60B

Infrastructure Output (YoY) (Oct) decreased from -5.2% to -5.8%

GDP Quarterly (YoY) (Q2) decreased from 5.0% to 4.5%

EUROPE/EMEA:

Newly elected President of the European Council Charles Michel said that this next phase of Brexit will likely cause some divisions over trade talks with the UK. They stressed that the overall Brexit experience has played a role in bringing the continent together. Charles Michel will be hosting the first EU summit on the 12-13 of December.

China and Russia have now completed a first highway bridge that connects the two neighboring counties. The opening ceremony showed marked the end of a 24-year project. The bridge is 1,080 meters long, with the total highway being around 20 km in length and crosses the Amur River.

Germany took a step in validating the cryptocurrency markets by passing a bill that allows banks to sell and store cryptocurrencies from 1st of January 2020. This could push Germany as a leader in the crypto space by relaxing regulations.

There are some planned environmental protests in Paris and other regions in France, in which Green groups plan to block one of the cities major shopping centers in Paris on Black Friday. Their argument is the fact that consumer capitalism is destroying the ecology and exploiting the weakest which in turn widens social inequalities.

The major Europe stock markets had a negative day today:

• CAC 40 decreased 7.54 points or -0.13% to 5,905.17
• FTSE 100 decreased 69.90 points, or -0.94% to 7,346.53
• DAX 30 decreased 9.20 points or -0.07% to 13,236.38

The major Europe currency markets had a green day today:

• EURUSD increased 0.0010 or 0.09% to 1.10223
• GBPUSD increased 0.0028 or 0.22% to 1.29392
• USDCHF increased 0.0011 or 0.11% to 0.99970

Some economic news from Europe today:

Germany:

German Retail Sales (MoM) (Oct) decreased from 0.1% to -1.9%

German Retail Sales (YoY) (Oct) decreased from 3.4% to 0.8%

German Unemployment Change (Nov) decreased from 5K to -16K

German Unemployment Rate (Nov) remain the same at 5.0%

German Unemployment (Nov) decreased from 2.287M to 2.266M

German Unemployment n.s.a. (Nov) decreased from 2.204M to 2.180M

France:

French Consumer Spending (MoM) (Oct) increased from -0.3% to 0.2%

French CPI (YoY) increased from 0.8% to 1.0%

French CPI (MoM) decreased from 0.0% to -0.1%

French GDP (QoQ) (Q3) remain the same at 0.3%

French HICP (MoM) increased from -0.1% to 0.1%

French HICP (YoY) increased from 0.9% to 1.2%

French PPI (MoM) (Oct) decreased from 0.1% to -0.1%

Swiss:

KOF Leading Indicators (Nov) decreased from 94.8 to 93.0

Spain:

Spanish Current account (Sep) decreased from 3.32B to 0.74B

Norway:

Core Retail Sales (MoM) (Oct) decreased from -0.1% to -0.8%

Central Bank Currency Purchase (Dec) remain the same at -700.0M

Unemployment Change (Nov) increased from 76.62K to 76.67K

Unemployment Rate n.s.a. (Nov) remain the same at 2.10%

UK:

BoE Consumer Credit (Oct) increased from 0.785B to 1.326B

M4 Money Supply (MoM) (Oct) decreased from 0.7% to 0.0%

Mortgage Approvals (Oct) decreased from 65.80K to 64.60K

Mortgage Lending (Oct) increased from 3.93B to 4.32B

Net Lending to Individuals increased from 4.7B to 5.6B

Italy:

Italian Monthly Unemployment Rate (Oct) decreased from 9.9% to 9.7%

Italian CPI (YoY) (Nov) increased from 0.2% to 0.4%

Italian CPI (MoM) (Nov) increased from -0.1% to 0.0%

Italian HICP (MoM) (Nov) decreased from 0.2% to -0.1%

Italian HICP (YoY) (Nov) increased from 0.2% to 0.4%

Italian GDP (QoQ) (Q3) remain the same at 0.1%

Italian GDP (YoY) (Q3) remain the same at 0.3%

Euro Zone:

Core CPI (YoY) increased from 1.1% to 1.3%

Core CPI (MoM) increased from -0.1% to 0.0%

CPI (YoY) (Nov) increased from 0.7% to 1.0%

CPI, n.s.a (Nov) decreased from 105.44 to 105.14

HICP ex Energy & Food (YoY) (Nov) increased from 1.2% to 1.5%

Unemployment Rate (Oct) decreased from 7.6% to 7.5%

US/AMERICAS:

Canadian Prime Minister Justin Trudeau met with Mexico’s Undersecretary Jesus Seade to discuss the ratified NAFTA deal this Friday. Seade is also is set to discuss matters with Canada’s Deputy Prime Minister Chrystia Freeland. Canada and Mexico are working on finalizing an addendum to the USMCA, which has been an uphill battle for all countries involved. Seade told reporters, “It really has been a long, complicated journey. Many of the issues raised by democrats are very valid. Good things in terms of what they raised.  At the same time after one extra year of reviewing the text, a lot of things are coming out. I think we are going to have instead of a very good agreement, an excellent one.” PM Trudeau spoke favorably of Mexico’s labor reform efforts and seemed optimistic that a deal could be reached.

The European Union has agreed to import more US beef imports. Despite tensions over the US potentially imposing new auto tariffs on the EU, the European Parliament voted on Thursday to purchase 45,000 tons of beef in 2020. Additionally, the EU will only purchase hormone-free beef from the US as the issue has been a past pain point.

Next week is the 70th NATO anniversary meeting in London. World leaders will meet on a one-on-one platform to discuss everything from trade to war. A White House official stated that the issue of national cyber security, such as the alleged threat posed by Chinese companies ZTE and Huawei, are set to be discussed.

US Market Closings (Early Close):

• Dow declined 112.59 points or -0.40% to 2,8051.41
• S&P 500 declined 12.65 points or -0.40% to 3,140.98
• Nasdaq declined 39.70 points or -0.46% to 8,665.47
• Russell 2000 declined 9.60 points or -0.59% to 1,624.50

Canada Market Closings:

• TSX Composite declined 74.32 points or -043% to 17,040.20
• TSX 60 declined 5.05 points or -0.49% to 1,018.62

Brazil Market Closing:

• Bovespa declined 56.81 points or -0.05% to 108,233.28

ENERGY:

Crude took a hit today over the expected outcome of the US-China trade deal, as the new bill which was passed in the US has angered the Chinese government.

The oil markets had a negative day today:

• Crude Oil decreased 2.5336 USD/BBL or -4.36% to 55.5050
• Brent decreased 2.364 USD/BBL or  -3.75% to 60.8537
• Natural gas decreased 0.1276 USD/MMBtu or -5.20% to 2.3274
• Gasoline decreased 0.0826USD/GAL or -4.90% to 1.6049
• Heating oil decreased 0.0701 USD/GAL or -3.59% to 1.8835
• Top commodity gainers: Wheat (3.28%),Bitumen(2.82%),Lean Hogs(1.77%), and Sugar(1.49%)
• Top commodity losers: Gasoline(-4.90%), Crude Oil(-4.36%), Brent (-3.75%), and Natural Gas(-5.20%)

The above data was collected around 12:45 pm EST on Friday.

BONDS:

Japan -0.08%(+1bp), US 2’s 1.623% (+0bps), US 10’s 1.77%(+1bps), US 30’s 2.22%(+3bps), Bunds -0.37% (-0bp), France -0.04% (+1bp), Italy 1.34% (-1bp), Turkey 12.18% (+1bp), Greece 1.49% (-53bp), Portugal 0.41% (+1bp), Spain 0.43% (+1bp) and UK Gilts 0.70% (+2bp).