Market Talk – May 31, 2023

ASIA:

India’s economic growth in the March quarter reached 6.1%, according to government data. This growth was driven by increased government and private capital spending, although private consumption remained sluggish. India continues to be one of the fastest growing emerging economies, particularly as China’s recovery falters. Despite the risks posed by a global slowdown, the government anticipates growth to remain around 6.5% in the current fiscal year. The economy outperformed economists’ expectations, with a growth rate of 5.0% forecasted in a Reuters poll for the last quarter of the 2022/23 fiscal year. The full-year growth estimate was revised from 7% to 7.2%. In the previous fiscal year, India’s economy grew by 9.1%.

The major Asian stock markets had a negative day today:

• NIKKEI 225 decreased 440.28 points or -1.41% to 30,887.88
• Shanghai decreased 19.65 points or -0.61% to 3,204.56
• Hang Seng decreased 361.51 points or -1.94% to 18,234.27
• ASX 200 decreased 118.00 points or -1.64% to 7,091.30
• Kospi decreased 8.40 points or -0.32% to 2,577.12
• SENSEX decreased 346.89 points or -0.55% to 62,622.24
• Nifty50 decreased 99.45 points or -0.53% to 18,534.40

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00552 or -0.85% to 0.64618
• NZDUSD decreased 0.00455 or -0.75% to 0.59905
• USDJPY decreased 0.04 or -0.03% to 139.750
• USDCNY increased 0.03877 or 0.55% to 7.12947

Precious Metals:

• Gold increased 5.81 USD/t oz. or 0.30% to 1,964.95
• Silver increased 0.265 USD/t. oz or 1.14% to 23.480

Some economic news from last night:

China:

Chinese Composite PMI (May) decreased from 54.4 to 52.9

Manufacturing PMI (May) decreased from 49.2 to 48.8

Non-Manufacturing PMI (May) decreased from 56.4 to 54.5

Japan:

Industrial Production (MoM) (Apr) decreased from 1.1% to -0.4%

Retail Sales (YoY) (Apr) decreased from 6.9% to 5.0%

Australia:

Construction Work Done (QoQ) (Q1) increased from 1.0% to 1.8%

CPI (YoY) decreased from 7.0% to 6.8%

Private Sector Credit (MoM) (Apr) increased from 0.2% to 0.6%

New Zealand:

ANZ Business Confidence (May) increased from -43.8 to -31.1

Some economic news from today:

India:

GDP Quarterly (YoY) (Q4) increased from 4.4% to 6.1%

EUROPE/EMEA:

Swiss National Bank Chairman Thomas Jordan defended recent interest rate hikes aimed at addressing inflation, stating that they did not harm Swiss financial stability and were not responsible for Credit Suisse’s decline. The central bank has raised interest rates four times in the past year to combat inflation, which has remained above the target range of 0%-2%. Market expectations suggest a 25-basis point increase from the current rate of 1.5% in the next assessment in June. Jordan expressed ongoing concern about Swiss inflation, which, although easing in April to 2.6%, has remained above the central bank’s target range for 14 consecutive months. He emphasized that the longer inflation persists above the target, the more challenging it becomes to reduce as it becomes deeply entrenched in the perception of businesses and households.

The major Europe stock markets had a negative day today:

• CAC 40 decreased 111.05 points or -1.54% to 7,098.70
• FTSE 100 decreased 75.93 points or -1.01% to 7,446.14
• DAX 30 decreased 244.89 points or -1.54% to 15,664.02

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.0096 or -0.89% to 1.06370
• GBPUSD decreased 0.00302 or -0.24% to 1.23828
• USDCHF increased 0.00883 or 0.98% to 0.91433

Some economic news from Europe today:

Swiss:

Retail Sales (YoY) (Apr) decreased from -1.9% to -3.7%

France:

French Consumer Spending (MoM) (Apr) decreased from -0.8% to -1.0%

French CPI (MoM) (May) decreased from 0.6% to -0.1%

French GDP (QoQ) (Q1) increased from 0.1% to 0.2%

French GDP (YoY) increased from 0.5% to 0.8%

French HICP (MoM) decreased from 0.7% to -0.1%

Germany:

German Unemployment Change (May) decreased from 23K to 9K

German Unemployment Rate (May) remain the same at 5.6%

German CPI (YoY) (May) decreased from 7.2% to 6.1%

German CPI (MoM) (May) decreased from 0.4% to -0.1%

Italy:

Italian CPI (MoM) (May) decreased from 0.4% to 0.3%

US/AMERICAS:

The US House of Representatives has passed a bill to temporarily suspend the debt limit through December 31, 2024. This comes after President Joe Biden and Republican House Speaker Kevin McCarthy agreed to temporarily suspend the debt ceiling and cap some federal spending in order to prevent a default. The deal would suspend the $31.4 trillion debt ceiling until Jan. 1, 2025. The GOP has agreed that non-defense discretionary spending would be “roughly flat” in 2024. The debt limit extension lasts past 2024, meaning Congress would not need to address the issue again until after the November 2024 presidential election

US Market Closings:

• Dow declined 134.51 points or -0.41% to 32,908.27
• S&P 500 declined 25.69 points or -0.61% to 4,179.83
• Nasdaq declined 81.14 points or -0.63% to 12,935.29
• Russell 2000 declined 17.64 points or -1% to 1,749.65

Canada Market Closings:

• TSX Composite declined 167.46 points or -0.85% to 19,572.24
• TSX 60 declined 10.43 points or -0.88% to 1,176.94

Brazil Market Closing:

• Bovespa declined 631.96 points or -0.58% to 108,335.07

ENERGY:

The oil markets had a negative day today:

• Crude Oil decreased 0.687 USD/BBL or -0.99% to 68.773
• Brent decreased 0.48 USD/BBL or -0.65% to 73.230
• Natural gas decreased 0.0286 USD/MMBtu or -1.23% to 2.2984
• Gasoline decreased 0.0289 USD/GAL or -1.17% to 2.4503
• Heating oil decreased 0.0097 USD/GAL or -0.43% to 2.2593

The above data was collected around 13:02 EST on Wednesday

• Top commodity gainers: Silver (1.14%), Coal (2.15%), Rapeseed (2.66%) and Lean Hogs (1.55%)
• Top commodity losers: Palm Oil (-5.94%), Platinum (-2.45%), Palladium (-2.52%) and HRC Steel (-14.09 %)

The above data was collected around 13:08 EST Wednesday.

BONDS:

Japan 0.432% (-0.4bp), US 2’s 4.42% (-0.050%), US 10’s 3.6483% (-4.77bps); US 30’s 3.86% (-0.036%), Bunds 2.274% (-6.6bp), France 2.846% (-7.1bp), Italy 4.083% (-7.7bp), Turkey 10.23% (+0bp), Greece 3.779% (-4.4bp), Portugal 3.018% (-6bp); Spain 3.329% (-6.6bp) and UK Gilts 4.179% (-6.5bp).

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