Market Talk – August 15, 2023

ASIA:

China’s July data fell short of expectations, with retail sales only rising 2.5% from a year ago, industrial production increasing by 3.7%, and fixed asset investment growing by 3.4% for the first seven months of the year. The urban unemployment rate edged up to 5.3%. Notably, the report didn’t include the youth unemployment figure, which has hit record highs recently. Real estate investment also saw a steeper decline of 8.5% year-to-date as of July. The National Bureau of Statistics cited economic and social changes as reasons for suspending the release of youth unemployment data while they reassess their methodology.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 178.98 points or 0.56% to 32,238.89
• Shanghai decreased 2.25 points or -0.07% to 3,176.18
• Hang Seng decreased 192.44 points or -1.03% to 18,581.11
• ASX 200 increased 28.00 points or 0.38% to 7,305.00
• Kospi closed
• SENSEX closed
• Nifty50 closed

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00173 or -0.27% to 0.64667
• NZDUSD decreased 0.00093 or -0.16% to 0.59637
• USDJPY decreased 0.016 or -0.01% to 145.524
• USDCNY increased 0.04193 or 0.58% to 7.32040

Precious Metals:

• Gold decreased 4.37 USD/t oz. or -0.23% to 1,903.53
• Silver decreased 0.048 USD/t. oz or -0.21% to 22.562

Some economic news from last night:

China：

Fixed Asset Investment (YoY) (Jul) decreased from 3.8% to 3.4%

Industrial Production (YoY) (Jul) decreased from 4.4% to 3.7%

Chinese Industrial Production YTD (YoY) (Jul) remain the same at 3.8%

Chinese Unemployment Rate (Jul) increased from 5.2% to 5.3%

Japan:

GDP (QoQ) (Q2) increased from 0.9% to 1.5%

GDP (YoY) (Q2) increased from 3.7% to 6.0%

Australia:

Wage Price Index (QoQ) (Q2) remain the same at 0.8%

Some economic news from today:

Japan:

Industrial Production (MoM) increased from -2.2% to 2.4%

EUROPE/EMEA:

Norway’s $1.4 trillion wealth fund, the world’s largest stock market investor, is advising the companies it invests in to adopt artificial intelligence (AI) for profit generation while emphasizing responsible usage. The fund’s CEO, Nicolai Tangen, believes that AI is crucial for boosting productivity and efficiency and should be treated as a fundamental business tool. The fund, which invests in around 9,200 global companies, is focusing on encouraging responsible AI adoption in sectors like healthcare, finance, and large tech, due to their significant consumer impact. The fund outlines the need for companies to transparently explain the development, design, training, and testing of their AI systems, along with ensuring effective human oversight and control.

The major Europe stock markets had a negative day today:

• CAC 40 decreased 81.14 points or -1.10% to 7,267.70
• FTSE 100 decreased 117.51 points or -1.57% to 7,389.64
• DAX 30 decreased 136.97 points or -0.86% to 15,767.28

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00136 or 0.12% to 1.09176
• GBPUSD increased 0.00396 or 0.31% to 1.27196
• USDCHF decreased 0.00038 or -0.04% to 0.87772

Some economic news from Europe today:

UK:

Average Earnings Index +Bonus (Jun) increased from 7.2% to 8.2%

Claimant Count Change (Jul) increased from 16.2K to 29.0K

Employment Change 3M/3M (MoM) (Jun) decreased from 102K to -66K

Labour Productivity increased from -1.4% to 0.7%

Unemployment Rate (Jun) increased from 4.0% to 4.2%

Swiss:

PPI (MoM) (Jul) decreased from 0.0% to -0.1%

Germany:

German ZEW Current Conditions (Aug) decreased from -59.5 to -71.3

German ZEW Economic Sentiment (Aug) increased from -14.7 to -12.3

Euro Zone:

ZEW Economic Sentiment (Aug) increased from -12.2 to -5.5

US/AMERICAS:

Regional banks’ stocks fell after Federal Reserve Bank of Minneapolis President Neel Kashkari advocated for significantly further capital regulation. Kashkari argued that lifting bank capital requirements significantly would help backstop the financial system and prevent future crises. He has previously supported a plan to boost capital requirements for big banks. Kashkari’s comments reflect ongoing concerns about the stability of the banking system and the need for greater regulation to prevent future crises.

US Market Closings:

• Dow declined 361.24 points or -1.02% to 34,946.39
• S&P 500 declined 51.86 points or -1.16% to 4,437.86
• Nasdaq declined 157.28 points or -1.14% to 13,631.05
• Russell 2000 declined 24.74 points or -1.29% to 1,895.75

Canada Market Closings:

• TSX Composite declined 390.75 points or -1.93% to 19,899.79
• TSX 60 declined 24.29 points or -2% to 1,191.67

Brazil Market Closing:

• Bovespa declined 638.13 points or -0.55% to 116,171.42

ENERGY:

The oil markets had a negative day today:

• Crude Oil decreased 1.98 USD/BBL or -2.40% to 80.530
• Brent decreased 1.766 USD/BBL or -2.05% to 84.444
• Natural gas decreased 0.1122 USD/MMBtu or -4.01% to 2.6828
• Gasoline decreased 0.0612 USD/GAL or -2.11% to 2.8450
• Heating oil decreased 0.0661 USD/GAL or -2.14% to 3.0222

The above data was collected around 13:47 EST on Tuesday

• Top commodity gainers: Orange Juice (3.32%), Cheese (1.59%), Palm Oil (2.41%) and Lumber (2.68%)
• Top commodity losers: Palladium (-2.84%), Wheat (-2.52%), Natural Gas (-4.01%) and Crude Oil (-2.40%)

The above data was collected around 13:56 EST Tuesday.

BONDS:

Japan 0.626% (+0.5bp), US 2’s 4.94% (-0.028%), US 10’s 4.1953% (+1.33bps); US 30’s 4.30% (+0.023%), Bunds 2.682% (+4.5bp), France 3.226% (+4.9bp), Italy 4.36% (+7.3bp), Turkey 18.59% (+32bp), Greece 3.992% (+6.3bp), Portugal 3.404% (+5.6bp); Spain 3.718% (+6.5bp) and UK Gilts 4.589% (+2.3bp).