Market Talk – September 27, 2023

ASIA:

JPMorgan’s head of emerging market economics has suggested that the Reserve Bank of India is likely to purchase dollars and sell bonds to manage rupee liquidity as India’s inclusion in global bond indices approaches. JPMorgan’s decision to include India in its emerging market bond index in June 2024 is expected to bring in $15 billion to $20 billion, increasing foreign assets on the central bank’s balance sheet and posing challenges for forex and liquidity management. This inclusion will also introduce new investors who are not bound by RBI regulations, potentially adding market discipline to the government. Despite India’s expected nominal GDP growth of 10.5% for the fiscal year ending March 2024, its 10-year bond yield remains around 7.15%.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 56.85 points or 0.18% to 32,371.90
• Shanghai increased 5.04 points or 0.16% to 3,107.32
• Hang Seng increased 144.97 points or 0.83% to 17,611.87
• ASX 200 decreased 7.90 points or -0.11% to 7,030.30
• Kospi increased 2.10 points or 0.09% to 2,465.07
• SENSEX increased 173.22 points or 0.26% to 66,118.69
• Nifty50 increased 51.75 points or 0.26% to 19,716.45

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.0057 or -0.89% to 0.63390
• NZDUSD decreased 0.00379 or -0.64% to 0.59061
• USDJPY increased 0.556 or 0.37% to 149.606
• USDCNY increased 0.00736 or 0.10% to 7.31937

The above data was collected around 13.46 EST.

Precious Metals:

• Gold decreased 25.82 USD/t oz. or -1.36% to 1,874.67
• Silver decreased 0.391 USD/t. oz or -1.71% to 22.470

The above data was collected around 13:49 EST.

No economic news from last night:

No economic news from today:

EUROPE/EMEA:

The Bank of England has postponed the implementation of the final phase of international bank capital rules, which were originally scheduled to begin in January 2025. Instead, they will now be rolled out in July 2025, aligning with the United States’ timeline. This delay aims to provide financial firms with more time to prepare. Additionally, the transitional period for full implementation will be shortened to 4.5 years, ensuring complete implementation by January 1, 2030. UK Finance, a banking industry group, noted that its members were already allocating significant resources to prepare for these new rules.

The major Europe stock markets had a negative day today:

• CAC 40 decreased 2.23 points or -0.03% to 7,071.79
• FTSE 100 decreased 32.50 points or -0.43% to 7,593.22
• DAX 30 decreased 38.42 points or -0.25% to 15,217.45

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.0071 or -0.67% to 1.04990
• GBPUSD decreased 0.00341 or -0.28% to 1.21229
• USDCHF increased 0.00605 or 0.66% to 0.92155

The above data was collected around 13:52 EST.

Some economic news from Europe today:

Germany:

GfK German Consumer Climate (Oct) decreased from -25.6 to -26.5

France:

France Jobseekers Total increased from 2,816.6K to 2,827.6K

US/AMERICAS:

Mortgage demand has fallen as interest rates hit the highest level in nearly 23 years. Applications for refinancing fell 1% for the week and were 21% lower than they were one year ago. Applications for a mortgage to purchase a home fell 2% for the week and were 27% lower than the same week one year ago. Mortgage interest rates just hit a level not seen since the year 2000, and as a result, mortgage demand is now sitting near a 27-year low. The Federal Open Market Committee’s most recent projections suggest that rates are expected to be higher for longer, which drove the increase in Treasury yields. Today’s potential buyers are facing an unprecedented dynamic of a historically low supply of homes for sale, coupled with both rising interest rates and rising prices.

US Market Closings:

• Dow declined 68.61 points or -0.2% to 33,550.27
• S&P 500 advanced 0.98 of a point or 0.02% to 4,274.51
• Nasdaq advanced 29.24 points or 0.22% to 13,092.85
• Russell 2000 advanced 17.3 points or 0.98% to 1,778.9

Canada Market Closings:

• TSX Composite declined 120.17 points or -0.61% to 19,435.98
• TSX 60 declined 7.45 points or -0.63% to 1,166.25

Brazil Market Closing:

• Bovespa declined 197.94 points or -0.17% to 113,995.49

ENERGY:

The oil markets had a green day today:

• Crude Oil increased 3.326 USD/BBL or 3.68% to 93.716
• Brent increased 2.497 USD/BBL or 2.66% to 96.457
• Natural gas increased 0.0686 USD/MMBtu or 2.41% to 2.9136
• Gasoline increased 0.0527 USD/GAL or 2.06% to 2.6149
• Heating oil increased 0.0866 USD/GAL or 2.69% to 3.3104

The above data was collected around 13:55 EST.

• Top commodity gainers: Crude Oil (3.68%), Heating Oil (2.69%), Brent (2.66%) and HRC Steel (13.06%)
• Top commodity losers: Platinum (-2.14%), Cocoa (-1.69%), Wheat (-1.72%) and Silver (-1.71%)

The above data was collected around 14:01 EST.

BONDS:

Japan 0.737% (-0.8bp), US 2’s 5.15% (+0.017%), US 10’s 4.6260% (+6.8bps); US 30’s 4.73% (+0.033%), Bunds 2.858% (+5.9bp), France 3.417% (+5.7bp), Italy 4.828% (+9.8bp), Turkey 25.77% (+35bp), Greece 4.482% (+17.3bp), Portugal 3.606% (+4.3bp); Spain 3.977% (+8.1bp) and UK Gilts 4.378% (+4.8bp)

The above data was collected around 14:11 EST.