Market Talk – February 9, 2023

ASIA:

India’s unemployment rate fell to 7.14% in January, the lowest in four months, from 8.30% in the previous month, data from the Centre for Monitoring Indian Economy (CMIE) showed. The urban unemployment rate declined to 8.55% in January from 10.09% in the previous month, while the rural unemployment rate slipped to 6.48% from 7.44%, the data showed. It is safe to say that employment has improved over the last few quarters, however, there still have a long way to go given each year in absolute terms we have added nearly 20 million to the workforce making the gap wider day by day.

India’s central bank raised its key interest rate by 25 basis points and indicated that it is open to the possibility of further rate increases, as core inflation stays elevated. The increase in the key repo rate by 25 basis points to 6.5 per cent on Wednesday was in line with expectations. The RBI forecast inflation at 6.5 per cent in the April 2022 to March 2023 financial year, coming down to 5.3 per cent in the next financial year. The RBI is projecting gross domestic product growth of 6.4 per cent in the current financial year.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 decreased 22.11 points or -0.08% to 27,584.35
• Shanghai increased 38.28 points or 1.18% to 3,270.38
• Hang Seng increased 340.84 points or 1.60% to 21,624.36
• ASX 200 decreased 39.80 points or -0.53% to 7,490.30
• Kospi decreased 2.12 points or -0.09% to 2,481.52
• SENSEX increased 142.43 points or 0.23% to 60,806.22
• Nifty50 increased 21.75 points or 0.12% to 17,893.45

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00278 or 0.40% to 0.69518
• NZDUSD increased 0.0037 or 0.59% to 0.63420
• USDJPY decreased 0.186 or -0.14% to 131.184
• USDCNY decreased 0.00385 or -0.06% to 6.79115

Precious Metals:

• Gold decreased 8.14 USD/t oz. or -0.43% to 1,867.45
• Silver decreased 0.165 USD/t. oz or -0.74% to 22.144

Some economic news from last night:

Australia:

Building Approvals (MoM) remain the same at 18.5%

Some economic news from today:

Japan:

Machine Tool Orders (YoY) decreased from 1.0% to -9.7%

EUROPE/EMEA:

Bank of England Governor Andrew Bailey has urged workers and employers to consider the expected sharp fall in inflation this year when negotiating pay settlements. U.K. inflation came in at an annual 10.5% in December, marking a second consecutive month of declines. The soaring cost of living in the country has led to widespread industrial action among public sector workers, whose average pay increases drastically lag those of the private sector. The Bank last week hiked interest rates by 50 basis points, taking the main Bank rate to 4%, as it looks to drag inflation back towards its 2% target.

The major Europe stock markets had a green day:

• CAC 40 increased 68.53 points or 0.96% to 7,188.36
• FTSE 100 increased 25.98 points or 0.33% to 7,911.15
• DAX 30 increased 111.37 points or 0.72% to 15,523.42

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00359 or 0.34% to 1.07449
• GBPUSD increased 0.00674 or 0.56% to 1.21384
• USDCHF decreased 0.00014 or -0.02% to 0.92066

Some economic news from Europe today:

Germany:

German CPI (YoY) (Jan) increased from 8.6% to 8.7%

German CPI (MoM) (Jan) increased from -0.8% to 1.0%

US/AMERICAS:

The Bank of Canada is maintaining interest rates, according to the latest minutes. Some officials felt it would have been appropriate to hold rates in January. Additionally, five policymakers debating on whether reaffirming to the public that data-driven hikes were appropriate, and ultimately decided to announce that postponing future hikes would be appropriate.  “Members were in broad agreement that, going forward, it would be appropriate to pause any additional tightening to allow economic developments to unfold,” the report said. The central bank believes that holding rates will give them time to assess the risk of over-versus under-tightening.

US Market Closings:

• Dow declined 248.47 points or -0.73% to 33,700.54
• S&P 500 declined 36.26 points or -0.88% to 4,081.6
• Nasdaq declined 120.94 points or -1.02% to 11,789.58
• Russell 2000 declined 27.26 points or -1.4% to 1,915.34

Canada Market Closings:

• TSX Composite declined 81.79 points or -0.4% to 20,597.75
• TSX 60 declined 3.97 points or -0.32% to 1,241.69

Brazil Market Closing:

• Bovespa declined 1,943.44 points or -1.77% to 108,008.05

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 0.615 USD/BBL or -0.78% to 77.855
• Brent decreased 0.717 USD/BBL or -0.84% to 84.373
• Natural gas increased 0.1156 USD/MMBtu or 4.82% to 2.5116
• Gasoline decreased 0.0247 USD/GAL or -1.00% to 2.4381
• Heating oil decreased 0.0686 USD/GAL or -2.37% to 2.8247

The above data was collected around 13:11 EST on Thursday

• Top commodity gainers: Rice (1.40%), Orange Juice (1.67%), Natural Gas (4.82%) and Steel (1.38%)
• Top commodity losers: HRC Steel (-5.53%), Coal (-6.00%), Heating Oil (-2.37%) and Lumber (-3.72%)

The above data was collected around 13:22 EST Thursday.

BONDS:

Japan 0.496% (+0.5bp), US 2’s 4.48% (+0.030%), US 10’s 3.6390% (-1.4bps); US 30’s 3.69% (-0.018%), Bunds 2.325% (-4.2bp), France 2.777% (-3.9bp), Italy 4.137% (-9.7bp), Turkey 11.08% (-4bp), Greece 4.198% (-4.6bp), Portugal 3.169% (-6.9bp); Spain 3.349% (-4.2bp) and UK Gilts 3.294% (-2bp).

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