Market Talk – September 15, 2023

ASIA:

Influential ruling party lawmaker Hiroshige Seko expressed strong support for maintaining an ultra-loose monetary policy in Japan. This comes in response to recent comments from Japan’s central bank chief, which led to an increase in the yen’s value and bond yields. Seko emphasized that while inflation is rising due to higher raw material costs, Japan has not yet achieved the sustained 2% inflation target set by the central bank. His remarks underscore the opposition faced by the Bank of Japan (BOJ) in exiting its ultra-loose monetary policy, as Seko is a prominent advocate of aggressive monetary easing. As a result of these developments, the yen remained stable at a one-week high, and Japanese government bond yields reached a near-decade high, reflecting market expectations of a potential earlier interest rate hike.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 364.99 points or 1.10% to 33,533.09
• Shanghai decreased 8.81 points or -0.28% to 3,117.74
• Hang Seng increased 134.97 points or 0.75% to 18,182.89
• ASX 200 increased 92.50 points or 1.29% to 7,279.00
• Kospi increased 28.39 points or 1.10% to 2,601.28
• SENSEX increased 319.63 points or 0.47% to 67,838.63
• Nifty50 increased 89.25 points or 0.44% to 20,192.35

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00005 or -0.01% to 0.64385
• NZDUSD decreased 0.00048 or -0.08% to 0.59042
• USDJPY increased 0.413 or 0.28% to 147.883
• USDCNY decreased 0.01225 or -0.17% to 7.27865

The above data was collected around 12.40 EST.

Precious Metals:

• Gold increased 16.35 USD/t oz. or 0.86% to 1,926.67
• Silver increased 0.525 USD/t. oz or 2.32% to 23.155

The above data was collected around 12:44 EST.

Some economic news from last night:

China:

Fixed Asset Investment (YoY) (Aug) decreased from 3.4% to 3.2%

Industrial Production (YoY) (Aug) increased from 3.7% to 4.5%

Chinese Industrial Production YTD (YoY) (Aug) increased from 3.8% to 3.9%

Chinese Unemployment Rate (Aug) decreased from 5.3% to 5.2%

New Zealand:

Business NZ PMI (Aug) decreased from 46.3 to 46.1

No economic news from today:

EUROPE/EMEA:

The Bank of England’s survey indicates that the British public’s expectations for future inflation remained relatively stable in August. Inflation predictions for the next year increased slightly from 3.5% in May to 3.6% in August. However, there is growing concern among respondents about the rising interest rates, which have gone from 0.1% to 5.25% since December 2021. A significant percentage of Britons (40%) believe it would be best for the economy if interest rates decreased, and 34% think it would be best for them personally. These figures are the highest since November 2008, during the global financial crisis. This survey suggests that the Bank of England can find reassurance in the fact that public inflation expectations are not escalating uncontrollably.

The major Europe stock markets had a green day today:

• CAC 40 increased 70.15 points or 0.96% to 7,378.82
• FTSE 100 increased 38.30 points or 0.50% to 7,711.38
• DAX 30 increased 88.24 points or 0.56% to 15,893.53

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00303 or 0.28% to 1.06713
• GBPUSD decreased 0.00096 or -0.08% to 1.23994
• USDCHF increased 0.00085 or 0.09% to 0.89635

The above data was collected around 12:51 EST.

Some economic news from Europe today:

France:

French CPI (MoM) (Aug) increased from 0.1% to 1.0%

French HICP (MoM) (Aug) increased from 1.0% to 1.1%

Euro Zone:

Wages in euro zone (YoY) (Q2) decreased from 4.90% to 4.60%

Trade Balance (Jul) decreased from 18.5B to 6.5B

US/AMERICAS:

The United Auto Workers (UAW) has gone on strike against the “Big Three” Detroit automakers (General Motors, Ford, and Stellantis), potentially impacting the already-fragile U.S. economy. The strike began after the UAW made ambitious demands in wages, benefits, and job protections for its members. This is the first time in the UAW’s 88-year history that it has simultaneously walked out on all three automakersThe economic consequences of the strike could extend beyond the city of Detroit, with estimated losses of $989 million for manufacturers and $859 million in lost direct wages. These figures do not include strike pay, unemployment benefits, unemployment taxes, income taxes, government spending, or settlement bonuses. The strikes are currently limited in scope, but experts warn of potential far-reaching economic consequences for businesses and consumers, including higher car prices and lower inventory. The UAW’s demands include a 36% pay increase across a four-year contract, pension benefits for all employees, and limited use of temporary workers.

US Market Closings:

• Dow declined 288.87 points or 0-.83% to 34,618.24
• S&P 500 declined 54.78 points or 1.22% to 4,450.32
• Nasdaq declined 217.72 points or 1.56% to 13,708.33
• Russell 2000 declined 19.6 points or 1.05% to 1,847.03

Canada Market Closings:

• TSX Composite advanced 54.5 points or 0.26% to 20,622.34
• TSX 60 advanced 3.35 points or 0.27% to 1,238.36

Brazil Market Closing:

• Bovespa declined 634.02 points or -0.53% to 118,757.53

ENERGY:

The oil markets had a mixed day today:

• Crude Oil increased 0.558 USD/BBL or 0.62% to 90.718
• Brent decreased 0.06 USD/BBL or -0.06% to 93.640
• Natural gas decreased 0.0388 USD/MMBtu or -1.43% to 2.6692
• Gasoline decreased 0.0369 USD/GAL or -1.35% to 2.7058
• Heating oil decreased 0.1054 USD/GAL or -3.03% to 3.3761

The above data was collected around 12:57 EST.

• Top commodity gainers: Silver (2.32%), Platinum (2.19%), Bitumen (3.29%) and Methanol (1.71%)
• Top commodity losers: Zinc (-2.00%), Heating Oil (-3.03%), Cheese (-1.56%) and Cocoa (-2.62%)

The above data was collected around 13:03 EST.

BONDS:

Japan 0.716% (+0.5bp), US 2’s 5.02% (+0.010%), US 10’s 4.3144% (+2.44bps); US 30’s 4.40% (+0.012%), Bunds 2.67% (+7.5bp), France 3.218% (+9.1bp), Italy 4.466% (+11.3bp), Turkey 23.31% (+127bp), Greece 4.123% (+12.1bp), Portugal 3.4220% (+9.4bp); Spain 3.74% (+10bp) and UK Gilts 4.366% (+8.3bp)