Market Talk – June 7, 2023

ASIA:

Singapore’s retail sales exceeded expectations, increasing by 3.6% year-on-year (YoY) and surpassing the projected contraction of 1.9% YoY. On a monthly basis, retail sales rose by 4.2%, with a similar increase seen when excluding motor vehicle sales. Despite elevated inflation, retail sales have remained strong, potentially due to the return of visitors to Singapore. If the influx of foreign visitors continues, retail sales are expected to continue growing. While domestic household spending may be impacted by high inflation, the gradual return of visitor arrivals could offset this. Additionally, once price pressures subside, retail sales are expected to further accelerate, possibly towards the end of 2023.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 decreased 593.04 points or -1.82% to 31,913.74
• Shanghai increased 2.42 points or 0.08% to 3,197.76
• Hang Seng increased 152.72 points or 0.80% to 19,252.00
• ASX 200 decreased 11.60 points or -0.16% to 7,118.00
• Kospi increased 0.19 points or 0.01% to 2,615.60
• SENSEX increased 350.08 points or 0.56% to 63,142.96
• Nifty50 increased 127.40 points or 0.68% to 18,726.40

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00078 or -0.12% to 0.66612
• NZDUSD decreased 0.00296 or -0.49% to 0.60464
• USDJPY increased 0.357 or 0.26% to 139.987
• USDCNY increased 0.014 or 0.20% to 7.14220

Precious Metals:

• Gold decreased 18.17 USD/t oz. or -0.93% to 1,944.68
• Silver decreased 0.094 USD/t. oz or -0.40% to 23.486

Some economic news from last night:

China:

Exports (YoY) (May) decreased from 8.5% to -7.5%

Imports (YoY) (May) increased from -7.9% to -4.5%

Trade Balance (USD) (May) decreased from 90.21B to 65.81B

Australia:

AIG Manufacturing Index (May) increased from -20.2 to -5.1

GDP (QoQ) (Q1) decreased from 0.6% to 0.2%

GDP (YoY) (Q1) decreased from 2.6% to 2.3%

Some economic news from today:

China:

FX Reserves (USD) (May) decreased from 3.205T to 3.177T

Hong Kong:

Foreign Reserves (USD) (May) decreased from 427.40B to 421.00B

EUROPE/EMEA:

Germany, the fourth largest economy globally, is currently experiencing a recession caused by a weakened Euro and an unexpected economic contraction in the first quarter of 2023. The decline in GDP by 0.3% between January and March marks the second consecutive quarter of contraction, meeting the definition of a recession. Despite employment growth and easing inflation, the anticipation of higher interest rates will continue to impact spending and investment. Germany has been the weakest performer among major eurozone economies in the past two quarters, with consumer spending declining due to high inflation, which saw prices rise by 7.2% compared to the previous year in April.

The major Europe stock markets had a negative day today:

• CAC 40 decreased 6.21 points or -0.09% to 7,202.79
• FTSE 100 decreased 3.76 points or -0.05% to 7,624.34
• DAX 30 decreased 31.88 points or -0.20% to 15,960.56

The major Europe currency markets had a green day today:

• EURUSD increased 0.00111 or 0.10% to 1.07021
• GBPUSD increased 0.00189 or 0.15% to 1.24429
• USDCHF increased 0.0015 or 0.17% to 0.90890

Some economic news from Europe today:

Germany:

German Industrial Production (MoM) (Apr) increased from -2.1% to 0.3%

Swiss:

Unemployment Rate n.s.a. (May) decreased from 2.0% to 1.9%

Unemployment Rate s.a. (May) increased from 1.9% to 2.0%

UK:

Halifax House Price Index (YoY) (May) decreased from 0.1% to -1.0%

Halifax House Price Index (MoM) (May) increased from -0.4% to 0.0%

Mortgage Rate (GBP) (May) increased from 7.35% to 7.44%

US/AMERICAS:

Smoke from wildfires burning in Canada has caused New York City to have some of the worst air quality in the country this week, with air quality levels reaching into the 150s on Tuesday, considered unhealthy for all people and significantly above exposure recommendations from the World Health Organization. The smoke contains fine particulate matter, or PM2.5, which is the tiniest yet most dangerous pollutant. Millions of people in parts of 18 states from South Carolina to New Hampshire were under air quality alerts on Wednesday morning for both wildfire smoke and ozone. The smoke is expected to continue to impact air quality in the eastern US. Meanwhile, the Canadian economy grew by 0.1% in October, meeting expectations, with another 0.1% increase in GDP seen likely in November.

US Market Closings:

• Dow advanced 91.74 points or 0.27% to 33,665.02
• S&P 500 declined 16.33 points or -0.38% to 4,267.52
• Nasdaq declined 171.52 points or -1.29% to 13,104.9
• Russell 2000 advanced 33.05 points or 1.78% to 1,888.45

Canada Market Closings:

• TSX Composite declined 71.91 points or -0.36% to 19,983.69
• TSX 60 declined 4.47 points or -0.37% to 1,200.41

Brazil Market Closing:

• Bovespa advanced 878.06 points or 0.77% to 115,488.16

ENERGY:

The oil markets had a green day today:

• Crude Oil increased 0.951 USD/BBL or 1.33% to 72.691
• Brent increased 1.093 USD/BBL or 1.43% to 77.383
• Natural gas increased 0.0556 USD/MMBtu or 2.46% to 2.3176
• Gasoline increased 0.0676 USD/GAL or 2.64% to 2.6319
• Heating oil increased 0.044 USD/GAL or 1.86% to 2.4118

The above data was collected around 12:25 EST on Wednesday

• Top commodity gainers: Natural Gas (2.46%), Gasoline (2.64%), Cheese (2.03%) and Zinc (3.00%)
• Top commodity losers: Palladium (-1.85%), Methanol (-2.16%), Wheat (-1.95%) and Orange Juice (-2.28%)

The above data was collected around 12:32 EST Wednesday.

BONDS:

Japan 0.43% (+0.5bp), US 2’s 4.59% (+0.063%), US 10’s 3.7817% (+8.17bps); US 30’s 3.93% (+0.053%), Bunds 2.453% (+8.3bp), France 3.013% (+9.4bp), Italy 4.285% (+12bp), Turkey 14.57% (+58bp), Greece 3.825% (+6.1bp), Portugal 3.193% (+11.7bp); Spain 3.473% (+10.5bp) and UK Gilts 4.251% (+4.3bp).

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