Market Talk – August 10, 2023

ASIA:

President Joe Biden has signed an executive order to limit new U.S. investments in China’s sensitive technology areas such as computer chips. The order also mandates government notification for investments in other tech sectors. It permits the U.S. Treasury secretary to control American investments in Chinese entities related to semiconductors, quantum tech, and certain AI systems. The goal is to prevent U.S. capital and knowledge from aiding China’s military advancement and compromising U.S. security. This order covers various investment types, including private equity, venture capital, joint ventures, and greenfield investments.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 269.32 points or 0.84% to 32,473.65
• Shanghai increased 10.07 points or 0.31% to 3,254.56
• Hang Seng increased 2.23 points or 0.01% to 19,248.26
• ASX 200 increased 19.40 points or 0.26% to 7,357.40
• Kospi decreased 3.56 points or -0.14% to 2,601.56
• SENSEX decreased 307.63 points or -0.47% to 65,688.18
• Nifty50 decreased 89.45 points or -0.46% to 19,543.10

The major Asian currency markets had a green day today:

• AUDUSD increased 0.00322 or 0.49% to 0.65582
• NZDUSD increased 0.00103 or 0.17% to 0.60613
• USDJPY increased 0.707 or 0.49% to 144.427
• USDCNY increased 0.00929 or 0.13% to 7.23509

Precious Metals:

• Gold increased 6.03 USD/t oz. or 0.32% to 1,920.62
• Silver increased 0.185 USD/t. oz or 0.82% to 22.855

No economic news from last night:

Some economic news from today:

India:

Interest Rate Decision remain the same at 6.50%

EUROPE/EMEA:

Germany, the largest and typically stronger member of the European Central Bank, is facing challenges that are negatively impacting the Eurozone. These challenges include poor trade relations with China, declines in its significant manufacturing and construction sectors, and uncertainties about its reliance on affordable Russian fuel. These issues are not only affecting Germany’s growth but are also posing a threat to the entire Eurozone, potentially pushing it into a recession. This situation contrasts with the ECB’s earlier expectations of moderate growth and inflation. The United States, in contrast, still aims for its own positive economic outcomes.

The major Europe stock markets had a green day today:

• CAC 40 increased 111.58 points or 1.52% to 7,433.62
• FTSE 100 increased 31.30 points or 0.41% to 7,618.60
• DAX 30 increased 143.94 points or 0.91% to 15,996.52

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00421 or 0.38% to 1.10151
• GBPUSD increased 0.00012 or 0.01% to 1.27192
• USDCHF decreased 0.0034 or -0.39% to 0.87370

US/AMERICAS:

The Consumer Price Index (CPI) rose 3.2% from a year ago in July 2023, slightly below expectations. The core CPI, which excludes volatile food and energy prices, ran at a 12-month rate of 4.7%, also below estimates. The increase in inflation was primarily driven by rising shelter costs, which were up 0.4% and 7.7% from a year ago. Real wages adjusted for inflation increased 0.3% on the month and 1.1% from a year ago. While inflation remains above the Federal Reserve’s 2% target, it has come down from its highs in mid-2022. The report suggests that inflation may be losing some of its grip on the U.S. economy.

US Market Closings:

• Dow advanced by 52.79 points or 0.15% to 35,176.15
• S&P 500 advanced by 1.12 points or 0.03% to 4,468.83
• Nasdaq advanced by 15.97 points or 0.12% to 13,737.99
• Russell 2000 declined by 8.15 points or -0.42% to 1,922.62

Canada Market Closings:

• TSX Composite advanced 67.61 points or 0.33% to 20,342.88
• TSX 60 advanced by 5.23 points or 0.43% to 1,220.36

Brazil Market Closing:

• Bovespa declined 59.17 points or -0.05% to 118,349.6

ENERGY:

The oil markets had a negative day today:

• Crude Oil decreased 1.158 USD/BBL or -1.37% to 83.242
• Brent decreased 1.134 USD/BBL or -1.30% to 86.416
• Natural gas decreased 0.1925 USD/MMBtu or -6.51% to 2.7665
• Gasoline decreased 0.0613 USD/GAL or -2.09% to 2.8671
• Heating oil decreased 0.0825 USD/GAL or -2.57% to 3.1245

The above data was collected around 12:58 EST on Thursday

• Top commodity gainers: Platinum (2.47%), Cotton (2.63%), Oat (1.98%) and Palladium (5.08%)
• Top commodity losers: Natural Gas (-6.51%), Cocoa (-1.51%), Heating Oil (-2.57%) and Gasoline (-2.09%)

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

BONDS:

Japan 0.59% (+1.8bp), US 2’s 4.78% (-0.023%), US 10’s 4.0223% (+1.03bps); US 30’s 4.20% (+0.018%), Bunds 2.506% (+4bp), France 3.065% (+3.4bp), Italy 4.144% (-0.8bp), Turkey 17.81% (+8bp), Greece 3.831% (-1.3bp), Portugal 3.262% (+4.2bp); Spain 3.55% (+2bp) and UK Gilts 4.37% (+0.1bp).