Market Talk – August 22, 2023

ASIA:

Beijing’s efforts to attract the Middle East’s capital are proving successful, with a Dubai-based chamber of commerce expressing eagerness for business collaboration and positioning itself as a key partner in China’s Belt and Road Initiative. China has become a significant global trade partner for the UAE, with over $72 billion worth of non-oil trade recorded in 2022, marking an 18% increase from the previous year. China is also actively seeking business partnerships, particularly in the energy sector, with Saudi Arabia and other Gulf nations. To strengthen its trade initiative and counter a decline in Western investments, China is preparing to host the third Belt and Road Forum for International Cooperation in October. This event aims to boost the initiative’s growth and enhance China’s global business presence, given the recent drop in foreign direct investment (FDI) as reported by China’s Ministry of Commerce.

The major Asian stock markets had a green day today:

• NIKKEI 225 increased 291.07 points or 0.92% to 31,856.71
• Shanghai increased 27.36 points or 0.88% to 3,120.33
• Hang Seng increased 167.72 points or 0.95% to 17,791.01
• ASX 200 increased 6.10 points or 0.09% to 7,121.60
• Kospi increased 6.94 points or 0.28% to 2,515.74
• SENSEX increased 3.94 points or 0.01% to 65,220.03
• Nifty50 increased 2.85 points or 0.01% to 19,396.45

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00081 or 0.13% to 0.64201
• NZDUSD increased 0.00183 or 0.31% to 0.59443
• USDJPY decreased 0.385 or -0.26% to 145.785
• USDCNY increased 0.01924 or 0.26% to 7.30511

Precious Metals:

• Gold increased 3.60 USD/t oz. or 0.19% to 1,897.54
• Silver increased 0.062 USD/t. oz or 0.26% to 23.409

No economic news from last night:

Some economic news from today:

Japan:

BoJ Core CPI (YoY) increased from 3.0% to 3.3%

EUROPE/EMEA:

The European Central Bank’s chief economist, Philip Lane, stated that the euro zone economy will continue to grow in the upcoming years and is unlikely to face a significant or prolonged recession. While the economy of the 20-nation euro bloc has experienced stagnation over the past three quarters due to a recession in manufacturing, experts predict a minimal GDP growth for 2023 without a substantial rebound. One argument is that the euro zone economy has not yet caught up to its pre-pandemic trajectory, which could drive growth. Despite raising interest rates aggressively to moderate demand and inflation, Lane clarified that the goal is not to drastically reduce demand but to ensure that it grows at a slower pace than supply.

The major Europe stock markets had a green day today:

• CAC 40 increased 42.82 points or 0.59% to 7,240.88
• FTSE 100 increased 12.94 points or 0.18% to 7,270.76
• DAX 30 increased 102.34 points or 0.66% to 15,705.62

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00366 or -0.34% to 1.08544
• GBPUSD decreased 0.00138 or -0.11% to 1.27402
• USDCHF increased 0.00152 or 0.17% to 0.87982

US/AMERICAS:

Existing home sales in the US continued to decline in July 2023, with limited options for homebuyers due to a worsening supply shortage. Owned home sales fell nearly 6% in July compared to June, and about 20% from the same month a year ago. Sales declined to a seasonally adjusted annualized rate of 4.81 million units, the slowest sales pace since November 2015. The supply of homes for sale remains tight, with just 1.08 million homes available at the end of June, 13.6% less than June of 2022. The sluggish housing market is attributed to high interest rates, inflated prices, and tight supply. The median price of an existing home sold in May was $396,100, which is 3.1% lower than May 2022. The largest price drop in just over a decade is a median measure, which skews the price toward the type of home that is selling the most.

US Market Closings:

• Dow declined 174.86 points or -0.51% to 34,288.83
• S&P 500 declined 12.22 points or -0.28% to 4,387.55
• Nasdaq advanced 8.28 points or 0.06% to 13,505.87
• Russell 2000 declined 5.18% to -0.28% to 1,850.84

Canada Market Closings:

• TSX Composite declined 93.66 points or -0.47% to 19,691.21
• TSX 60 declined 7.04 points or -0.59% to 1,178.08

Brazil Market Closing:

• Bovespa advanced 1,726.66 points or 1.51% to 116,156.01

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 0.468 USD/BBL or -0.58% to 79.652
• Brent decreased 0.478 USD/BBL or -0.57% to 83.982
• Natural gas decreased 0.0834 USD/MMBtu or -3.17% to 2.5486
• Gasoline increased 0.0159 USD/GAL or 0.57% to 2.7885
• Heating oil increased 0.0268 USD/GAL or 0.86% to 3.1430

The above data was collected around 14:16 EST on Tuesday

• Top commodity gainers: Methanol (1.57%), Coffee (1.90%), Aluminum (1.73%) and Soda Ash (1.84%)
• Top commodity losers: Soybeans (-1.53%), Palm Oil (-1.78%), Cheese (-1.70%) and Natural Gas (-3.17%)

The above data was collected around 14:27 EST Tuesday.

BONDS:

Japan 0.67% (+1.8bp), US 2’s 5.04% (+0.045%), US 10’s 4.3281% (-1.39bps); US 30’s 4.41% (-0.045%), Bunds 2.646% (-6bp), France 3.183% (-6.6bp), Italy 4.305% (-10.3bp), Turkey 18.13% (-23bp), Greece 3.974% (-4.1bp), Portugal 3.380% (-7bp); Spain 3.685% (-7.2bp) and UK Gilts 4.647% (-8.4bp)