Market Talk – August 29, 2023

ASIA:

Chinese state-owned banks are planning to lower interest rates on existing mortgages, marking the first such move since the global financial crisis. The goal is to support the struggling property sector and boost the economy, which has been facing challenges due to the debt crisis in the property market. The rate reduction will vary based on the type of clients and the city, with potential cuts of up to 20 basis points in certain cases. The property sector constitutes around 25% of the economy, but it has been experiencing multiple crises since 2021, and concerns have grown recently due to liquidity problems in a major developer. The People’s Bank of China has not yet commented on the matter.

The major Asian stock markets had a green day today:

• NIKKEI 225 increased 56.98 points or 0.18% to 32,226.97
• Shanghai increased 37.25 points or 1.20% to 3,135.89
• Hang Seng increased 353.29 points or 1.95% to 18,484.03
• ASX 200 increased 50.70 points or 0.71% to 7,210.50
• Kospi increased 8.75 points or 0.34% to 2,552.16
• SENSEX increased 79.22 points or 0.12% to 65,075.82
• Nifty50 increased 36.60 points or 0.19% to 19,342.65

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00288 or 0.45% to 0.64578
• NZDUSD increased 0.00378 or 0.64% to 0.59468
• USDJPY decreased 0.581 or -0.40% to 145.959
• USDCNY decreased 0.00478 or -0.07% to 7.28705

Precious Metals:

• Gold increased 16.29 USD/t oz. or 0.85% to 1,935.95
• Silver increased 0.452 USD/t. oz or 1.86% to 24.707

No economic news from last night:

No economic news from today:

EUROPE/EMEA:

The CEO of Carrefour, a French retailer, has expressed concern over high prices leading to significant reductions in consumer spending on essential items. The CEO has called on the government to postpone a law that would limit the promotional offers retailers can provide. This has triggered a dispute between the French government and retailers over the rising cost of living. Unlike other European countries where inflation is decreasing, France is still experiencing relatively high prices, especially in food, which has contributed to ongoing inflation. The government aims to address this issue to prevent it from negatively impacting consumer confidence, as reflected in stable but below-average household confidence in August according to an INSEE survey. The CEO’s comments caused Carrefour’s shares to drop by over 4%.

The major Europe stock markets had a green day today:

• CAC 40 increased 48.72 points or 0.67% to 7,373.43
• FTSE 100 increased 126.41 points or 1.72% to 7,464.99
• DAX 30 increased 138.27 points or 0.88% to 15,930.88

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00503 or 0.47% to 1.08673
• GBPUSD increased 0.00218 or 0.17% to 1.26248
• USDCHF decreased 0.00486 or -0.55% to 0.87874

Some economic news from Europe today:

Germany:

GfK German Consumer Climate (Sep) decreased from -24.6 to -25.5

 US/AMERICAS:

Regional banks will be required to raise more long-term debt in case of failure, according to recent developments. The aim is to improve the ability of banks to be resolved upon failure by converting the long-term debt into equity. This measure is part of the efforts to strengthen capital requirements for large banks and ensure that they have sufficient capital cushions to absorb potential losses during stress events. The changes come in response to concerns raised during the Trump administration, which weakened certain capital requirements for regional banks. The goal is to incorporate some of the requirements that already apply to the largest banks and expand long-term debt requirements to a broader range of banks. These measures are intended to reduce the risk of bank failures and protect against potential losses on deposits.

US Market Closings:

• Dow advanced 292.96 points or 0.85% to 34,852.94
• S&P 500 advanced 64.33 points or 1.45% to 4,497.64
• Nasdaq advanced 238.76 points or 1.74% to 13,943.76
• Russell 2000 advanced 26.53 points or 1.42% to 1,895.54

Canada Market Closings:

• TSX Composite advanced 265.27 points or 1.32% to 20,290.41
• TSX 60 advanced 16.38 points or 1.37% to 1,214.77

Brazil Market Closing:

• Bovespa advanced 1,282.63 points or 1.1% to 118,403.61

ENERGY:

The oil markets had a mixed day today:

• Crude Oil increased 0.661 USD/BBL or 0.83% to 80.761
• Brent increased 0.299 USD/BBL or 0.35% to 84.719
• Natural gas decreased 0.0315 USD/MMBtu or -1.18% to 2.6335
• Gasoline decreased 0.0101 USD/GAL or -0.36% to 2.7856
• Heating oil decreased 0.0224 USD/GAL or -0.70% to 3.1813

The above data was collected around 13:04 EST on Tuesday

• Top commodity gainers: Cocoa (2.72%), Soda Ash (2.93%), Rice (2.21%) and Zinc (2.58%)
• Top commodity losers: Rapeseed (-2.00%), Wheat (-2.40%), Coffee (-1.74%) and Natural Gas (-1.18%)

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

BONDS:

Japan 0.651% (-1.5bp), US 2’s 4.88% (-0.174%), US 10’s 4.1119% (-10.01bps); US 30’s 4.21% (-0.078%), Bunds 2.513% (-5.3bp), France 3.035% (-4.7bp), Italy 4.161% (-6.5bp), Turkey 18.45% (-23bp), Greece 3.829% (-6.2bp), Portugal 3.232% (-5bp); Spain 3.528% (-5.4bp) and UK Gilts 4.416% (-2.7bp)