Market Talk – August 1, 2023

ASIA:

In July, India’s manufacturing activity showed a slight easing for the second consecutive month, as per a private business survey by S&P Global. The Manufacturing Purchasing Managers’ Index (PMI) declined marginally to 57.7 from 57.8 in June but was slightly higher than expected (57.0). Despite the moderation, the pace of expansion remained healthy, with the index staying above the 50-mark for over two years, indicating growth. While output and new orders showed some moderation, they remained strong. New orders remained robust, and exports were boosted by foreign demand at the fastest rate since November. Companies expected the manufacturing activity to remain elevated in the future, as indicated by the high future output sub-index of 65.3. However, there are concerns about rising inflation. In June, the annual retail inflation rose to 4.81%, breaking four months of easing. This has led to market expectations that the Reserve Bank of India will maintain its key policy rate at a high level for an extended period to address inflationary pressures.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 304.36 points or 0.92% to 33,476.58
• Shanghai decreased 0.09 points or 0.00% to 3,290.95
• Hang Seng decreased 67.82 points or -0.34% to 20,011.12
• ASX 200 increased 40.30 points or 0.54% to 7,450.70
• Kospi increased 34.49 points or 1.31% to 2,667.07
• SENSEX decreased 68.36 points or -0.10% to 66,459.31
• Nifty50 decreased 20.25 points or -0.10% to 19,733.55

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.01129 or -1.68% to 0.66071
• NZDUSD decreased 0.00713 or -1.15% to 0.61367
• USDJPY increased 1.08 or 0.76% to 143.360
• USDCNY increased 0.04272 or 0.60% to 7.18742

Precious Metals:

• Gold decreased 20.17 USD/t oz. or -1.03% to 1,944.02
• Silver decreased 0.612 USD/t. oz or -2.47% to 24.158

Some economic news from last night:

China:

Caixin Manufacturing PMI (Jul) decreased from 50.5 to 49.2

Australia:

Building Approvals (MoM) (Jun) decreased from 20.5% to -7.7%

Home Loans (MoM) decreased from 5.1% to -2.8%

Some economic news from today:

Australia:

RBA Interest Rate Decision (Aug) remain the same at 4.10%

EUROPE/EMEA:

Traders have reduced their bets on the pound’s continuing rally ahead of a Bank of England rate decision. This comes after inflation in the UK slowed more than expected last month. Despite a 24% surge in the pound against the dollar since September, it reached a 15-month high in mid-July. The pound has been the best-performing G10 currency against the dollar this year, gaining 6.2%. However, data from the U.S. Commodity Futures Trading Commission revealed that net long positions on sterling in the futures market fell by 27% in the week leading to July 25, indicating a decrease in bullish sentiment.

The major Europe stock markets had a negative day today:

• CAC 40 decreased 91.70 points or -1.22% to 7,406.08
• FTSE 100 decreased 33.14 points or -0.43% to 7,666.27
• DAX 30 decreased 206.43 points or -1.26% to 16,240.40

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00232 or -0.21% to 1.09698
• GBPUSD decreased 0.00899 or -0.70% to 1.27471
• USDCHF increased 0.00436 or 0.50% to 0.87616

Some economic news from Europe today:

UK:

Nationwide HPI (YoY) (Jul) decreased from -3.5% to -3.8%

Nationwide HPI (MoM) (Jul) decreased from 0.1% to -0.2%

S&P Global/CIPS UK Manufacturing PMI (Jul) decreased from 46.5 to 45.3

Spain:

HCOB Spain Manufacturing PMI (Jul) decreased from 48.0 to 47.8

France:

HCOB France Manufacturing PMI (Jul) decreased from 46.0 to 45.1

Germany:

HCOB Germany Manufacturing PMI (Jul) decreased from 40.6 to 38.8

German Unemployment Change (Jul) decreased from 30K to -4K

German Unemployment Rate (Jul) decreased from 5.7% to 5.6%

Italy:

HCOB Italy Manufacturing PMI (Jul) increased from 43.8 to 44.5

Euro Zone:

HCOB Eurozone Manufacturing PMI (Jul) decreased from 43.4 to 42.7

Unemployment Rate (Jun) remain the same at 6.4%

US/AMERICAS:

The Job Openings and Labor Turnover Survey (JOLTS) report from the Labor Department shows that job openings and layoffs both declined in June 2023, which is a positive sign for the labor market. The number of job openings decreased to 10.4 million, down from 10.9 million in May. The number of layoffs and discharges also decreased to 1.3 million, down from 1.5 million in May. The report indicates that the labor market is stable, and the decline in layoffs suggests that employers are holding onto their workers. The number of hires and total separations also decreased to 5.9 million and 5.6 million, respectively.

US Market Closings:

• Dow advanced 71.15 points or 0.2% to 35,630.68
• S&P 500 declined 12.23 points or -0.27% to 4,576.73
• Nasdaq declined 62.11 points or -0.43% to 14,283.91
• Russell 2000 declined 9.01 points or -0.45% to 1,994.17

Canada Market Closings:

• TSX Composite declined 93.71 points or -0.45% to 20,532.93
• TSX 60 declined 5.55 points or -0.45% to 1,23162

Brazil Market Closing:

• Bovespa declined 694.59 points or -0.57% to 121,248.39

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 0.515 USD/BBL or -0.63% to 81.285
• Brent decreased 0.62 USD/BBL or -0.73% to 84.810
• Natural gas decreased 0.0902 USD/MMBtu or -3.42% to 2.5438
• Gasoline decreased 0.0117 USD/GAL or -0.40% to 2.8838
• Heating oil increased 0.0468 USD/GAL or 1.57% to 3.0323

The above data was collected around 12:11 EST on Tuesday

• Top commodity gainers: Heating Oil (1.57%), Methanol (4.04%), Rapeseed (9.67%) and Rice (1.94%)
• Top commodity losers: Palladium (-4.23%), Wheat (-2.73%), Natural Gas (-3.42%) and Silver (-2.47%)

The above data was collected around 12:21 EST Tuesday.

BONDS:

Japan 0.626% (+2.2bp), US 2’s 4.89% (+0.019%), US 10’s 4.0431% (+8.61bps); US 30’s 4.11% (+0.089%), Bunds 2.531% (+6.4bp), France 3.101% (+7.5bp), Italy 4.194% (+9bp), Turkey 18.01% (-40bp), Greece 3.868% (+8.9bp), Portugal 3.304% (+8.2bp); Spain 3.587% (+7.5bp) and UK Gilts 4.407% (+9.5bp).