Market Talk – July 3, 2023

ASIA:

A private sector survey in China revealed that factory activity growth slowed in June due to concerns about sluggish market conditions. The Caixin/S&P Global manufacturing purchasing managers’ index (PMI) dropped from 50.9 in May to 50.5 in June, indicating a marginal expansion. The index mark of 50 separates growth from contraction. The survey focuses on around 650 private and state-owned manufacturers, with a particular emphasis on export-oriented firms in coastal regions. This data, along with a separate official survey showing a decline in factory activity, suggests that China’s economy lost momentum in the second quarter as demand weakened. The survey also indicated a softening in manufacturing output and new orders during June.

The major Asian stock markets had a green day today:

• NIKKEI 225 increased 564.29 points or 1.70% to 33,753.33
• Shanghai increased 41.91 points or 1.31% to 3,243.97
• Hang Seng increased 390.16 points or 2.06% to 19,306.59
• ASX 200 increased 42.80 points or 0.59% to 7,246.10
• Kospi increased 38.19 points or 1.49% to 2,602.47
• SENSEX increased 486.49 points or 0.75% to 65,205.05
• Nifty50 increased 133.50 points or 0.70% to 19,322.55

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00117 or 0.18% to 0.66777
• NZDUSD increased 0.00276 or 0.45% to 0.61516
• USDJPY increased 0.265 or 0.18% to 144.585
• USDCNY decreased 0.01559 or -0.21% to 7.25201

Precious Metals:

• Gold increased 7.42 USD/t oz. or 0.39% to 1,926.99
• Silver increased 0.190 USD/t. oz or 0.83% to 22.942

Some economic news from last night:

China:

Caixin Manufacturing PMI (Jun) decreased from 50.9 to 50.5

Japan:

Tankan All Big Industry CAPEX (Q2) increased from 3.2% to 13.4%

Tankan Big Manufacturing Outlook Index (Q2) increased from 3 to 9

Tankan Large Manufacturers Index (Q2) increased from 1 to 5

Tankan Large Non-Manufacturers Index (Q2) increased from 20 to 23

Australia:

Building Approvals (MoM) (May) increased from -6.8% to 20.6%

Home Loans (MoM) increased from -3.0% to 4.0%

New Zealand:

Building Consents (MoM) (May) increased from -2.6% to -2.2%

Some economic news from today:

India:

Nikkei S&P Global Manufacturing PMI (Jun) decreased from 58.7 to 57.8

Hong Kong:

Retail Sales (YoY) (May) increased from 15.0% to 18.4%

EUROPE/EMEA:

The British government is addressing concerns that banks are discriminating against customers based on their political views. This comes after individuals, including prominent Brexit supporter Nigel Farage, reported their access to financial services being restricted. The government has recently passed legislation that requires the Financial Conduct Authority to review how banks handle “politically exposed persons” to strike a balance between free speech and managing commercial risk. The government has previously expressed concerns about “cancel culture” and is considering implementing stricter notice periods for account closures and requiring finance firms to provide more information about their reasons for such actions.

The major Europe stock markets had a green day today:

• CAC 40 increased 87.33 points or 1.19% to 7,400.06
• FTSE 100 increased 59.84 points or 0.80% to 7,531.53
• DAX 30 increased 201.18 points or 1.26% to 16,147.90

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00053 or 0.05% to 1.09153
• GBPUSD decreased 0.00128 or -0.10% to 1.26912
• USDCHF increased 0.00091 or 0.10% to 0.89621

Some economic news from Europe today:

UK:

Manufacturing PMI (Jun) decreased from 47.1 to 46.5

Spain:

Spanish Manufacturing PMI (Jun) decreased from 48.4 to 48.0

Italy:

Italian Manufacturing PMI (Jun) decreased from 45.9 to 43.8

France:

French Manufacturing PMI (Jun) increased from 45.7 to 46.0

Germany:

German Manufacturing PMI (Jun) decreased from 43.2 to 40.6

Swiss:

CPI (MoM) (Jun) decreased from 0.3% to 0.1%

procure.ch PMI (Jun) increased from 43.2 to 44.9

Euro Zone:

Manufacturing PMI (Jun) decreased from 44.8 to 43.4

US/AMERICAS:

Tesla’s Q2 2023 vehicle production and delivery numbers have been released, beating analysts’ expectations and indicating that deliveries rose 83% YoY for Tesla after adding manufacturing capacity and ramping up production at its vehicle assembly plant in Austin, Texas. The company delivered a record 466,140 vehicles in Q2 2023, which is a 36% increase YoY and a quarterly record. Tesla does not report individual model or region-specific numbers. The increase in deliveries is attributed to the company’s increased discounts and other incentives to boost sales in the face of economic uncertainty and rising competition. The news caused Tesla’s shares to rise over 7%

US Market Closings:

• Dow advanced 10.87 points or 0.03% to 34,418.47
• S&P 500 advanced 5.21 points or 0.12% to 4,455.59
• Nasdaq advanced 28.85 points or 0.21% to 13,816.77
• Russell 2000 advanced 8.05 points or 0.43% to 1,896.78

Canada Market Closings:

• TSX Composite advanced 242.12 points or 1.22% to 20,155.29
• TSX 60 advanced 14.56 points or 1.21% to 1,214.5

Brazil Market Closing:

• Bovespa advanced 1,585.78 points or 1.34% to 119,672.78

ENERGY:

The oil markets had a mixed day today:

• Crude Oil increased 0.684 USD/BBL or 0.97% to 71.324
• Brent increased 0.663 USD/BBL or 0.88% to 76.073
• Natural gas decreased 0.0927 USD/MMBtu or -3.31% to 2.7053
• Gasoline decreased 0.0139 USD/GAL or -0.55% to 2.5310
• Heating oil decreased 0.0187 USD/GAL or -0.76% to 2.4289

The above data was collected around 11:45 EST on Monday

• Top commodity gainers: Coal (13.24%), Palm Oil (5.17%), Sugar (2.36%) and Rapeseed (2.89%)
• Top commodity losers: Lumber (-1.59%), HRC Steel (-2.83%), Rhodium (-10.87%) and Natural Gas (-3.31%)

The above data was collected around 11:52 EST Monday.

BONDS:

Japan 0.401% (+0.5bp), US 2’s 4.92% (+0.040%), US 10’s 3.8427% (+2.37bps); US 30’s 3.86% (+0.008%), Bunds 2.438% (+4.4bp), France 2.978% (+4.1bp), Italy 4.146% (+7.1bp), Turkey 16.08% (-26bp), Greece 3.732% (+1.1bp), Portugal 3.208% (+7.5bp); Spain 3.444% (+5.8bp) and UK Gilts 4.442% (+5.5bp).