Market Talk – September 7, 2023

ASIA:

In August, inflation in India is expected to have eased from a 15-month high in July, mainly due to a decrease in vegetable prices. However, it is projected to remain above the upper limit of the Reserve Bank of India’s target range of 2%-6% for the second consecutive month. This easing is attributed to government measures such as subsidies on vegetable prices and export bans on certain cereals in response to crop damage caused by erratic monsoon rains. Food prices, which make up a significant portion of overall inflation, played a crucial role in reducing headline inflation. Nonetheless, the rise in energy prices is expected to offset some of this decline.

According to a Reuters poll of 45 economists conducted from September 4-7, it is predicted that the consumer price index in August will show a 7.00% increase compared to the previous year, down from the July figure of 7.44%. The forecasted range for inflation varied from 6.50% to 7.65%, with the majority of respondents anticipating inflation to be at or above 7.00%. The survey also indicated that wholesale price inflation, which reflects changes in producer prices, is likely to be -0.60% year-on-year in August, following a 1.36% decline in the previous month. The official data will be released on Tuesday.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 decreased 249.94 points or -0.75% to 32,991.08
• Shanghai decreased 35.72 points or -1.13% to 3,122.35
• Hang Seng decreased 247.91 points or -1.34% to 18,202.07
• ASX 200 decreased 86.10 points or -1.19% to 7,171.00
• Kospi decreased 15.08 points or -0.59% to 2,548.26
• SENSEX increased 385.04 points or 0.58% to 66,265.56
• Nifty50 increased 116.00 points or 0.59% to 19,727.05

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00024 or -0.04% to 0.63796
• NZDUSD increased 0.0011 or 0.19% to 0.58820
• USDJPY decreased 0.424 or -0.29% to 147.226
• USDCNY increased 0.01941 or 0.27% to 7.34051

The above data was collected around 13.55 EST.

Precious Metals:

• Gold increased 3.97 USD/t oz. or 0.21% to 1,920.25
• Silver decreased 0.203 USD/t. oz or -0.87% to 22.983

The above data was collected around 14.47 EST.

Some economic news from last night:

China:

Exports (YoY) (Aug) increased from -14.5% to -8.8%

Imports (YoY) (Aug) increased from -12.4% to -7.3%

Trade Balance (USD) (Aug) decreased from 80.60B to 68.36B

Australia：

Building Approvals (MoM) decreased from -7.9% to -8.1%

Trade Balance (Jul) decreased from 10.268B to 8.039B

EUROPE/EMEA:

French inflation is expected to decrease more than previously anticipated due to a reduction in food price pressures, according to the national statistics agency. The country’s economic growth is projected to be modest, with a 0.1% increase in the third quarter and a 0.2% rise in the fourth quarter. INSEE, the statistics agency, raised its 2023 growth estimate to 0.9% from 0.6% after stronger-than-expected quarterly growth in the second quarter.

However, this 2023 forecast still falls short of the government’s budgeted 1% growth rate for the year. Inflation is predicted to decrease from 4.8% in August to 4.2% in December, primarily due to a decline in food price inflation from 11.1% to 7.2%. Surging food prices have been a significant concern for French consumers, with many households altering their behavior to cope with the increase. The government has intervened by pressuring retailers and food producers to reduce prices and expedite annual price negotiations.

The major Europe stock markets had a mixed day today:

• CAC 40 increased 2.01 points or 0.03% to 7,196.10
• FTSE 100 increased 15.58 points or 0.21% to 7,441.72
• DAX 30 decreased 22.71 points or -0.14% to 15,718.66

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00277 or -0.26% to 1.06993
• GBPUSD decreased 0.00298 or -0.24% to 1.24752
• USDCHF increased 0.00175 or 0.20% to 0.89265

The above data was collected around 14:55 PM EST.

Some economic news from Europe today:

Germany:

German Industrial Production (MoM) (Jul) increased from -1.4% to -0.8%

UK:

Halifax House Price Index (YoY) (Aug) decreased from -2.5% to -4.6%

Halifax House Price Index (MoM) (Aug) decreased from -0.4% to -1.9%

Euro Zone:

GDP (QoQ) (Q2) remain the same at 0.1%

GDP (YoY) decreased from 1.1% to 0.5%

US/AMERICAS:

Apple shares fell over 3% during midday trading on Thursday, September 7th, following a 4% decline on Wednesday, September 6th, after several reports suggesting that Chinese government workers could be banned from using Apple iPhones. The reported restrictions, which have not been publicly announced by the Chinese government, raise concerns that Apple’s products could get caught up in international tensions between the U.S. and China. China is Apple’s third-largest market, accounting for 18% of Apple’s revenue in 2022. While a ban on all government employees could reduce iPhone unit sales in China by as much as 5%, the impact on Apple’s overall business is likely to be limited.

US Market Closings:

• Dow advanced 57.54 points or 0.17% to 34,500.73
• S&P 500 declined 14.34 points or -0.32% to 4,451.14
• Nasdaq declined 123.64 points or -0.89% to 13,748.83
• Russell 2000 declined 18.52 points or -0.99% to 1,855.76

Canada Market Closings:

• TSX Composite declined declined 94.88 points or -0.47% to 1,206.55

• TSX 60 declined 5.24 points or -0.43% to 1,206.55

Brazil Market Closing:

• Bovespa declined 1,345.96 points or -1.15% to 115,985.34

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 0.416 USD/BBL or -0.48% to 87.124
• Brent decreased 0.761 USD/BBL or -0.84% to 89.839
• Natural gas increased 0.0677 USD/MMBtu or 2.70% to 2.5777
• Gasoline increased 0.019 USD/GAL or 0.73% to 2.6204
• Heating oil increased 0.0241 USD/GAL or 0.75% to 3.2168

The above data was collected around 15:00 EST.

• Top commodity gainers: HRC Steel (2.61%), Natural Gas (2.70%), Rubber (1.75%) and Lean Hogs (1.50%)
• Top commodity losers: Cotton (-1.51%), Rice (-2.39%), Canola (-1.60%) and Rapeseed (-1.41%)

The above data was collected around 15:06 EST.

BONDS:

Japan 0.657% (+0.1bp), US 2’s 4.97% (-0.053%), US 10’s 4.2619% (-2.81bps); US 30’s 4.36% (+0.004%), Bunds 2.607% (-4.9bp), France 3.132% (-5.6bp), Italy 4.355% (-5.5bp), Turkey 21.62% (+317bp), Greece 3.985% (-1.4bp), Portugal 3.382% (-3.2bp); Spain 3.644% (-6.1bp) and UK Gilts 4.466% (-7bp)

The above data was collected around 15:11 EST.