Market Talk – September 18, 2023

ASIA:

In August 2023, China’s monthly inflation rate compared to the same month the previous year was 0.1 percent, showing a recent decrease from a peak of 2.8 percent in September 2022. The annual average inflation rate for 2022 in China was 2.0 percent. There are regional variations in inflation rates, with Hebei province experiencing the highest CPI growth as of June 2023, while Guangxi autonomous region reported the lowest. Rural areas have often had slightly higher inflation rates than cities in recent years. The National Bureau of Statistics of China attributes inflation to a surge in recreation and education prices in recent months, while other sectors saw comparatively smaller price increases. Transport prices have decreased recently but had seen significant growth in 2021 and 2022.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 364.99 points or 1.10% to 33,533.09
• Shanghai increased 8.19 points or 0.26% to 3,125.93
• Hang Seng decreased 252.34 points or -1.39% to 17,930.55
• ASX 200 decreased 48.60 points or -0.67% to 7,230.40
• Kospi decreased 26.56 points or -1.02% to 2,574.72
• SENSEX decreased 241.79 points or -0.36% to 67,596.84
• Nifty50 decreased 59.05 points or -0.29% to 20,133.30

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00110 or 0.17% to 0.64432
• NZDUSD increased 0.00210 or 0.35% to 0.59196
• USDJPY decreased 0.184 or -0.12% to 147.636
• USDCNY increased 0.01138 or 0.16% to 7.29148

The above data was collected around 11.59 EST

Precious Metals:

Gold increased 5.61 USD/t oz. or 0.29% to 1,929.18

Silver increased 0.147 USD/t. oz or 0.64%% to 23.155

The above data was collected around 12.00 EST

No economic news from last night:

No economic news from today:

EUROPE/EMEA:

European Central Bank (ECB) policymakers are planning to address the issue of excessive liquidity in banks, which amounts to trillions of euros. They may consider increasing reserve requirements as their initial step in combating inflation. This discussion is expected to begin at the ECB’s upcoming meeting in Athens on October 26 or during an autumn retreat for policymakers. Despite raising interest rates multiple times, inflation remains significantly above the ECB’s 2% target. Some policymakers are advocating for an increase in the reserve requirement from the current 1% of customer deposits to a level potentially around 3% or 4%. Additionally, there is debate about reducing the 4.8 trillion euros in debt accumulated by the ECB since 2015, primarily to prevent deflation, which is seen as a more challenging issue to address.

The major Europe stock markets had a negative day today:

• CAC 40 decreased 102.68 points or -1.39% to 7,276.14
• FTSE 100 decreased 58.44 points, or -0.76% to 7,652.94
• DAX 30 decreased 166.41 points or -1.05% to 15,727.12

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00373 or 0.35% to 1.06923
• GBPUSD increased 0.00116 or 0.09% to 1.24006
• USDCHF decreased 0.00096 or -0.11% to 0.89644

The above data was collected around 12.02 EST

US/AMERICAS:

The United Auto Workers (UAW) strike against the “Big Three” Detroit automakers (General Motors, Ford, and Stellantis) could have significant economic impacts if it persists, according to economists. The strike has so far impacted only a small portion of the workforce, but if it turns into an all-out strike, it could change things. The August alone saw some 4.1 million labor hours lost this year, the most for a single month since August 2000. Potential pay raises have raised the specter that inflation, which has abated recently from 40-year highs, could be stickier as unions fight for higher ground. The strike could erode American consumers’ strength, which for over a year now has been a critical guardrail against a recession.

US Market Closings:

• Dow advanced 6.06 points or 0.02% to 34,624.3
• S&P 500 advanced 3.21 points or 0.07% to 4,453.53
• Nasdaq advanced 1.9 points or 0.01% to 13,710.24
• Russell 2000 declined 12.73 points or -0.69% ti 1,834.3

Canada Market Closings:

• TSX Composite declined 129.51 points or -0.63% to 20,492.83
• TSX 60 declined 8.76 points or -0.71% to 1,229.6

Brazil Market Closing:

• Bovespa declined 469.32 points or -0.4% to 118,288.21

ENERGY:

The oil markets had a mixed day today:

• Crude Oil increased 1.347 USD/BBL or 1.48% to 92.117
• Brent increased 0.746 USD/BBL or 0.79% to 94.676
• Natural gas increased 0.0724 USD/MMBtu or 2.74% to 2.7164
• Gasoline increased 0.0041 USD/GAL or 0.15% to 2.7122
• Heating oil decreased 0.0744 USD/GAL or -2.20% to 3.3090

The above data was collected around 12:06 EST on Monday.

Top commodity gainers: Crude Oil (1.48%), Natural Gas (2.74%), Steel (1.71%), and Orange Juice (3.02%)

Top commodity losers: Wheat (-2.33%), Cocoa (-3.51%), Canola (-2.29%), and Rapeseed (-2.36%)

The above data was collected around 12:12 EST on Monday.

BONDS:

Japan 0.705%(-0.6bp), US 2’s 5.06% (+0.027%), US 10’s 4.3285%(+0.65bps); US 30’s 4.41% (+0.0004%), Bunds 2.71% (+4.1bp), France 3.256% (+3.4bp), Italy 4.518% (+5.1bp), Turkey 23.77% (+46bp), Greece 4.173% (+6.2bp), Portugal 3.453% (+3.1bp), Spain 3.782% (+4bp) and UK Gilts 4.389% (+2.6bp).

The above data was collected around 12:18 EST on Monday.