Market Talk – May 9, 2023

ASIA:

The Agricultural Bank of China, one of the country’s largest commercial lenders, has scaled up support for the manufacturing sector. As of the end of March, the bank’s outstanding loans to the manufacturing sector exceeded 2.69 trillion yuan ($388.42 billion), according to the bank. Newly-added loans to the manufacturing industry stood at over 390 billion yuan at the end of the first quarter (Q1), data from the lender showed. As of the end of Q1, loans issued to emerging industries of strategic importance increased more than 430 billion yuan. Meanwhile, outstanding loans to specialized and innovative firms topped 200 billion yuan for the first time. The lender has also ratcheted up support for low-carbon development, with its green loans reaching over 3 trillion yuan by the end of March.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 292.94 points or 1.01% to 29,242.82
• Shanghai decreased 37.33 points or -1.10% to 3,357.67
• Hang Seng decreased 429.45 points or -2.12% to 19,867.58
• ASX 200 decreased 12.40 points or -0.17% to 7,264.10
• Kospi decreased 3.15 points or -0.13% to 2,510.06
• SENSEX decreased 2.92 points or -0.01% to 61,761.33
• Nifty50 increased 1.55 points or 0.01% to 18,265.95

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00283 or -0.42% to 0.67537
• NZDUSD decreased 0.00181 or -0.29% to 0.63239
• USDJPY increased 0.179 or 0.13% to 135.259
• USDCNY increased 0.00624 or 0.09% to 6.92664

Precious Metals:

• Gold increased 11.05 USD/t oz. or 0.55% to 2,032.44
• Silver increased 0.038 USD/t. oz or 0.15% to 25.608

Some economic news from last night:

China:

Exports (YoY) (Apr) decreased from 14.8% to 8.5%

Imports (YoY) (Apr) decreased from -1.4% to -7.9%

Trade Balance (USD) (Apr) increased from 88.19B to 90.21B

Japan:

Household Spending (MoM) (Mar) increased from -2.4% to -0.8%

Household Spending (YoY) (Mar) decreased from 1.6% to -1.9%

Australia:

Retail Sales (MoM) increased from 0.2% to 0.4%

New Zealand:

Electronic Card Retail Sales (MoM) (Apr) remain the same at 0.7%

EUROPE/EMEA:

An ECB policymaker has said that the bank’s interest rates may be close to the level needed to contain inflation, and that the market’s expected interest rate peak is an important reference point. The ECB raised its key deposit rate by 25 basis points, with investors expecting another increase next month. The terminal rate, or peak interest rate, is currently priced in at 3.65%, with most investors expecting the ECB to raise the deposit rate to 3.75%. However, some investors see the peak at 3.50%, and the ECB is expected to start cutting rates in early 2022.

The major Europe stock markets had a mixed day today:

• CAC 40 decreased 43.74 points or -0.59% to 7,397.17
• FTSE 100 decreased 14.29 points or -0.18% to 7,764.09
• DAX 30 increased 2.65 points or 0.02% to 15,955.48

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00461 or -0.42% to 1.09579
• GBPUSD decreased 0.00026 or -0.02% to 1.26144
• USDCHF increased 0.0021 or 0.24% to 0.89130

Some economic news from Europe today:

UK:

Halifax House Price Index (YoY) (Apr) decreased from 1.6% to 0.1%

Halifax House Price Index (MoM) (Apr) decreased from 0.8% to -0.3%

Mortgage Rate (GBP) (Apr) increased from 7.22% to 7.41%

US/AMERICAS:

President Biden is set to meet with congressional leaders, including Speaker of the House Kevin McCarthy, Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell, and House Minority Leader Hakeem Jeffries, to discuss the debt ceiling and government spending. The meeting comes as both sides disagree on how to deal with the looming debt limit. Democrats have pushed for a “clean” debt ceiling increase, while Republicans on Capitol Hill are pushing for spending cuts to be tied to any raises. The United States hit its debt limit on August 1, 2021, and the Treasury Department will soon run out of cash and other resources to stay below it, risking a default on obligations. Treasury Secretary Yellen continues to warn of dire consequences, including default, if Congress cannot reach an agreement on the ceiling.

US Market Closings:

• Dow declined 56.88 points or -0.17% to 33,561.81
• S&P 500 declined 18.95 points or -0.46% to 4,119.17
• Nasdaq declined 77.36 points or -0.63% to 12,179.55
• Russell 2000 declined 4.79 points or -0.27% to 1,749.68

Canada Market Closings:

• TSX Composite increased 0.58 of a point or 0% to 20,585.73
• TSX 60 declined 1.4 points or -0.11% to 1,241.64

Brazil Market Closing:

• Bovespa advanced 1,071.51 points or 1.01% to 107,113.66

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 0.589 USD/BBL or -0.81% to 72.571
• Brent decreased 0.84 USD/BBL or -1.09% to 76.170
• Natural gas increased 0.031 USD/MMBtu or 1.39% to 2.2690
• Gasoline decreased 0.0141 USD/GAL or -0.57% to 2.4475
• Heating oil decreased 0.0258 USD/GAL or -1.09% to 2.3519

The above data was collected around 13:09 EST on Tuesday

• Top commodity gainers: Natural Gas (1.39%), Steel (1.71%), Cocoa (1.92%) and Platinum (3.18%)
• Top commodity losers: Orange Juice (-5.36%), Wheat (-2.31%), Corn (-2.11%) and Lumber (-5.31%)

The above data was collected around 13:28 EST Tuesday.

BONDS:

Japan 0.425% (+1.4bp), US 2’s 4.03% (+0.021%), US 10’s 3.5224% (+0.34bps); US 30’s 3.84% (+0.009%), Bunds 2.351% (+3.2bp), France 2.944% (+3.4bp), Italy 4.273% (+3.3bp), Turkey 14.79% (+208bp), Greece 4.125% (+4.2bp), Portugal 3.204% (+2.3bp); Spain 3.446% (+4.2bp) and UK Gilts 3.859% (+7.8bp).

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