Market Talk – June 20, 2023

ASIA:

The People’s Bank of China has taken steps to stimulate economic growth by cutting two key lending rates for the first time in 10 months. The one-year loan prime rate was reduced by 10 basis points from 3.65% to 3.55%, and the five-year loan prime rate was lowered from 4.3% to 4.2%. These rate cuts follow previous monetary easing moves by the central bank. Major investment banks such as Goldman Sachs and JPMorgan have revised down their GDP forecasts for China and expressed concerns about future challenges. The PBOC’s lending rates have a significant impact on household and corporate loans, as well as mortgage rates in China.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 18.49 points or 0.06% to 33,388.91
• Shanghai decreased 15.44 points or -0.47% to 3,240.36
• Hang Seng decreased 305.81 points or -1.54% to 19,607.08
• ASX 200 increased 62.90 points or 0.86% to 7,357.80
• Kospi decreased 4.59 points or -0.18% to 2,604.91
• SENSEX increased 159.40 points or 0.25% to 63,327.70
• Nifty50 increased 61.25 points or 0.33% to 18,816.70

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00740 or -1.08% to 0.67749
• NZDUSD decreased 0.00440 or -0.70% to 0.61544
• USDJPY decreased 0.622 or -0.44% to 141.358
• USDCNY increased 0.02300 or 0.32% to 7.18602

Precious Metals:

• Gold decreased 13.35 USD/t oz. or -0.68% to 1,936.77
• Silver decreased 0.751 USD/t. oz or -3.14% to 23.189

Some economic news from last night:

China:

PBoC Loan Prime Rate decreased from 3.65% to 3.55%

New Zealand:

Westpac Consumer Sentiment (Q2) increased from 77.7 to 83.1

Some economic news from today:

Japan:

Industrial Production (MoM) (Apr) increased from 0.3% to 0.7%

EUROPE/EMEA:

The European Commission asked EU governments on Tuesday to come up with an extra 10 billion euros for 2024-27 to leverage a total of 160 billion euros worth of investment in key technologies, including renewable energy. The call comes as the European Union executive is reviewing the bloc’s long-term budget that totals around 1% of the EU’s GDP and pays for various joint European policies. The new scheme is to be called Strategic Technologies for Europe Platform (STEP) and help develop in the EU microelectronics and quantum computing, as well as renewable energy and electricity storage, among others.

The major Europe stock markets had a negative day today:

• CAC 40 decreased 19.88 points or -0.27% to 7,294.17
• FTSE 100 decreased 19.17 points or -0.25% to 7,569.31
• DAX 30 decreased 89.88 points or -0.55% to 16,111.32

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.001 or -0.09% to 1.09120
• GBPUSD decreased 0.00437 or -0.34% to 1.27463
• USDCHF increased 0.00307 or 0.34% to 0.89857

Some economic news from Europe today:

Germany:

German PPI (MoM) (May) decreased from 0.3% to -1.4%

US/AMERICAS:

The Department of Education has announced that federal student loan borrowers will have to restart their payments in October 2023, after a pause of more than three years due to the pandemic. The interest-free payment pause, known as forbearance, began as an emergency pandemic measure in March 2020 under President Trump and was extended eight times under both the Biden and Trump administrations. The Biden administration had previously said that the pause would end either 60 days after June 30th or 60 days after the Supreme Court rules on the separate student loan forgiveness program, whichever comes first. The repayment date has been extended a total of eight times under both the Biden and Trump administrations. The interest on federal student loans will resume starting on September 1st, 2023, and payments will be due starting in October.

US Market Closings:

• Dow declined 245.25 points or -0.72% to 34,053.87
• S&P 500 declined 20.88 points or -0.47% to 4,388.71
• Nasdaq declined 22.28 points or -0.16% to 13,667.29
• Russell 2000 declined 8.77 points or -0.47% to 1,866.7

Canada Market Closings:

• TSX Composite declined 180.07 points or -0.9% to 19,754.14
• TSX 60 declined 10.93 points or -0.91% to 1,188.46

Brazil Market Closing:

• Bovespa declined 235.35 points or -0.2% to 119,622.4

ENERGY:

The oil markets had a negative day today:

• Crude Oil decreased 1.76 USD/BBL or -2.45% to 70.170
• Brent decreased 1.138 USD/BBL or -1.50% to 74.952
• Natural gas decreased 0.1029 USD/MMBtu or -3.89% to 2.5443
• Gasoline decreased 0.0704 USD/GAL or -2.66% to 2.5811
• Heating oil decreased 0.079 USD/GAL or -3.13% to 2.4425

The above data was collected around 12:45 EST on Tuesday

• Top commodity gainers: Copper (2.16%), Lumber (1.82%), HRC Steel (2.68%) and Lean Hogs (2.04%)
• Top commodity losers: Coffee (-3.60%), Natural Gas (-3.89%), Heating Oil (-3.13%) and Silver (-3.14%)

The above data was collected around 12:52 EST Tuesday.

BONDS:

Japan 0.390% (-0.6bp), US 2’s 4.68% (-0.076%), US 10’s 3.7111% (-10.86bps); US 30’s 3.81% (-0.097%), Bunds 2.396% (-12.1bp), France 2.917% (-11.5bp), Italy 4.019% (-11.1bp), Turkey 16.74% (-42bp), Greece 3.672% (-14.7bp), Portugal 3.085% (-8.1bp); Spain 3.341% (-10.1bp) and UK Gilts 4.323% (-16.8bp).

The post Market Talk – June 20, 2023 first appeared on Armstrong Economics.