Market Talk – August 21, 2023

ASIA:

In India, retail inflation reached a 15-month peak in July due to higher prices of vegetables and cereals. The inflation rate rose to 7.44% in July from 4.87% in June, the highest since April 2022. Food inflation, accounting for about half of the consumer expenses, surged to 11.51% in July compared to 4.49% in June. Meanwhile, Japan’s GDP grew at a faster pace than expected in the second quarter, expanding by 1.5% compared to the predicted 0.8% from a Reuters poll. Additionally, Japan’s core consumer inflation, which excludes fresh food prices but includes oil products, eased to 3.1% year-on-year in July.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 114.88 points or 0.37% to 31,565.64
• Shanghai decreased 38.98 points or -1.24% to 3,092.98
• Hang Seng decreased 327.56 points or -1.82% to 17,623.29
• ASX 200 decreased 32.60 points or -0.46% to 7,115.50
• Kospi increased 4.30 points or 0.17% to 2,508.80
• SENSEX increased 267.43 points or 0.41% to 65,216.09
• Nifty50 increased 83.45 points or 0.43% to 19,393.60

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00078 or 0.12% to 0.64098
• NZDUSD decreased 0.00009 or -0.02% to 0.59201
• USDJPY increased 0.774 or 0.53% to 146.144
• USDCNY decreased 0.02164 or -0.30% to 7.28532

Precious Metals:

• Gold increased 6.43 USD/t oz. or 0.34% to 1,894.62
• Silver increased 0.600 USD/t. oz or 2.64% to 23.304

Some economic news from last night:

China:

PBoC Loan Prime Rate decreased from 3.55% to 3.45%

No economic news from today:

EUROPE/EMEA:

Global household wealth fell in 2022 for the first time since the 2008 financial crisis, according to Credit Suisse and UBS’s latest Global Wealth Report. Total net private wealth fell by $11.3 trillion in 2022, measured in current nominal US dollars, taking it down to $454.4 trillion, the report says. Much of this decline has come as a result of the appreciation of the US dollar against other currencies. The report also found that overall wealth inequality fell in 2022. The wealth share of the global top 1% dropped slightly to 44.5%.

The Russian rouble slipped in value to lower than 1 US cent last week, hitting its lowest level since immediately after the invasion of Ukraine. It comes as Russia is set to increase the export levy oil producers have to pay by more than 25% to $2.92 per barrel, in an attempt to boost the state’s finances.

The major Europe stock markets had a mixed day today:

• CAC 40 increased 33.95 points or 0.47% to 7,198.06
• FTSE 100 decreased 4.61 points or -0.06% to 7,257.82
• DAX 30 increased 29.02 points or 0.19% to 15,603.28

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00347 or 0.32% to 1.08997
• GBPUSD increased 0.00269 or 0.21% to 1.27569
• USDCHF decreased 0.00285 or -0.32% to 0.87865

Some economic news from Europe today:

Germany:

German PPI (MoM) (Jul) decreased from -0.3% to -1.1%

US/AMERICAS:

Mortgage rates in the US have hit their highest point since 2001, according to a recent report by Bankrate. The average interest rate on 30-year mortgages rose to 7.31% in Bankrate’s weekly survey for August 16, 2023. The increase in mortgage rates is attributed to the Federal Reserve’s decision to raise benchmark interest rates by a total of 500 basis points since they began raising rates in 2022. However, mortgage rates don’t take direct cues from the Fed and will instead respond to the outlook for the economy and inflation. The rise in mortgage rates could make it more difficult for homebuyers to afford homes and could lead to a slowdown in the housing market.

US Market Closings:

• Dow declined 36.97 points or -0.11% to 34,463.69
• S&P 500 advanced 30.07 points or 0.69% to 4,399.78
• Nasdaq advanced 206.81 points or 1.56% to 13,497.59
• Russell 2000 declined 3.41 points or -0.18% to 1,856.01

Canada Market Closings:

• TSX Composite declined 33.52 points or -0.17% to 19,784.87
• TSX 60 declined 1.95 points or -0.16% to 1,185.12

Brazil Market Closing:

• Bovespa declined 979.17 points or -0.85% to 114,429.35

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 0.615 USD/BBL or -0.76% to 80.635
• Brent decreased 0.529 USD/BBL or -0.62% to 84.271
• Natural gas increased 0.0649 USD/MMBtu or 2.54% to 2.6159
• Gasoline decreased 0.0473 USD/GAL or -1.68% to 2.7759
• Heating oil decreased 0.0405 USD/GAL or -1.28% to 3.1192

The above data was collected around 14:34 EST on Monday

• Top commodity gainers: Natural Gas (2.54%), Silver (2.64%), Cheese (1.53%) and Palm Oil (1.68%)
• Top commodity losers: Gasoline (-1.68%), Lean Hogs (-1.89%), Wheat (-2.23%) and Corn (-2.49%)

The above data was collected around 14:44 EST Monday.

BONDS:

Japan 0.652% (+2.2bp), US 2’s 4.99% (+0.054%), US 10’s 4.3399% (+8.89bps); US 30’s 4.45% (+0.075%), Bunds 2.692% (+7.2bp), France 3.235% (+6.6bp), Italy 4.408% (+8.4bp), Turkey 18.36% (-7bp), Greece 4.01% (+4.7bp), Portugal 3.450% (+8.8bp); Spain 3.743% (+6.6bp) and UK Gilts 4.731% (+5.5bp)