Market Talk – October 2, 2023

ASIA:

Business sentiment in Japan improved in the third quarter, according to a central bank survey. This suggests that the conditions for a strong economic recovery are coming together, despite global economic challenges. Companies also maintained their plans for robust spending and faced a tight labor market, indicating that the Bank of Japan may consider phasing out its massive stimulus program. The confidence index for big manufacturers increased to 9 in September, surpassing expectations and marking the second consecutive quarter of improvement. The index for big non-manufacturers also rose to 27, its highest level since November 1991, showing sustained improvement for the sixth consecutive quarter.

The major Asian stock markets had a negative day today:

• NIKKEI 225 decreased 97.74 points or -0.31% to 31,759.88
• Shanghai closed
• Hang Seng closed
• ASX 200 decreased 15.40 points or -0.22% to 7,033.20
• Kospi closed
• SENSEX closed
• Nifty50 closed

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00623 or -0.97% to 0.63717
• NZDUSD decreased 0.00409 or -0.68% to 0.59541
• USDJPY increased 0.471 or 0.32% to 149.821
• USDCNY increased 0.02349 or 0.32% to 7.31899

The above data was collected around 12.21 EST.

Precious Metals:

• Gold decreased 17.34 USD/t oz. or -0.94% to 1,830.97
• Silver decreased 0.901 USD/t. oz or -4.07% to 21.259

The above data was collected around 12:24 EST.

Some economic news from last night:

Japan:

Tankan All Big Industry CAPEX (Q3) increased from 13.4% to 13.6%

Tankan Big Manufacturing Outlook Index (Q3) increased from 9 to 10

Tankan Large Manufacturers Index (Q3) increased from 5 to 9

Tankan Large Non-Manufacturers Index (Q3) increased from 23 to 27

No economic news from today:

EUROPE/EMEA:

Ukraine’s central bank is transitioning to a more flexible exchange rate system, moving away from the fixed peg it had maintained during the conflict with Russia. The decision aims to stimulate the country’s economy. The central bank, under Governor Andriy Pysanki, noted that financial stability had improved significantly, allowing for the easing of wartime restrictions to support the economy and businesses. Initially, during the war in February 2022, the central bank pegged the hryvnia currency at an official rate of around 29 to the U.S. dollar, but by July 2022, it had to devalue the currency to 36.57 to the dollar. Recent months have seen economic recovery, with slowing inflation and improved business sentiment. The central bank plans to implement a “managed flexible” exchange rate system and is prepared to intervene in the foreign exchange market if necessary to prevent excessive volatility.

The major Europe stock markets had a negative day today:

• CAC 40 decreased 66.90 points or -0.94% to 7,068.16
• FTSE 100 decreased 97.36 points or -1.28% to 7,510.72
• DAX 30 decreased 139.37 points or -0.91% to 15,247.21

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00734 or -0.69% to 1.04966
• GBPUSD decreased 0.00726 or -0.60% to 1.21244
• USDCHF increased 0.00312 or 0.34% to 0.91802

The above data was collected around 12:28 EST.

Some economic news from Europe today:

UK:

Nationwide HPI (YoY) remain the same at -5.3%

Nationwide HPI (MoM) increased from -0.8% to 0.0%

S&P Global/CIPS UK Manufacturing PMI (Sep) increased from 43.0 to 44.3

Spain:

HCOB Spain Manufacturing PMI (Sep) increased from 46.5 to 47.7

France:

HCOB France Manufacturing PMI (Sep) decreased from 46.0 to 44.2

Germany:

HCOB Germany Manufacturing PMI (Sep) increased from 39.1 to 39.6

Italy:

HCOB Italy Manufacturing PMI (Sep) increased from 45.4 to 46.8

Swiss:

procure.ch PMI (Sep) increased from 39.9 to 44.9

Euro Zone:

HCOB Eurozone Manufacturing PMI (Sep) decreased from 43.5 to 43.4

Unemployment Rate (Aug) decreased from 6.5% to 6.4%

US/AMERICAS:

Brazil’s Banco do Brasil is facing a public inquiry for its past ties to slavery. A group of historians brought their attention to the bank’s history and stressed the importance of publicly acknowledging institutions’ past ties with slavery and discussing reparations. Banco do Brasil was first established in 1808 and historians say the financial institution was founded with capital derived from slavery-based activities and funded public efforts to prevent abolition. The prosecutors are requesting that Banco do Brasil share facts about its historical and financial links with slave traffickers and slavery, and is now seeking reparations.

US Market Closings:

• Dow declined 74.15 points or -0.22% to 33,433.35
• S&P 500 advanced 0.34 of a point or 0.01% to 4,288.39
• Nasdaq advanced 88.45 points or 0.67% to 13,307.77
• Russell 2000 declined 28.28 points or -1.58% to 1,756.82

Canada Market Closings:

• TSX Composite declined 364.09 points or -1.86% to 19,177.18
• TSX 60 declined 21.36 points or -1.82% to 1,151.3

Brazil Market Closing:

• Bovespa declined 1,454.67 points or -1.25% to 115,110.5

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 1.468 USD/BBL or -1.62% to 89.322
• Brent decreased 0.949 USD/BBL or -1.03% to 91.251
• Natural gas decreased 0.0646 USD/MMBtu or -2.21% to 2.8644
• Gasoline increased 0.0143 USD/GAL or 0.60% to 2.4138
• Heating oil decreased 0.0647 USD/GAL or -1.96% to 3.2359

The above data was collected around 12:33 EST.

• Top commodity gainers: Wheat (2.91%), Coffee (2.12%), Cocoa (2.31%) and Corn (2.05%)
• Top commodity losers: Coal (-3.19%), Palladium (-3.06%), Platinum (-3.04%) and Silver (-4.07%)

The above data was collected around 12:40 EST.

BONDS:

Japan 0.780% (+0.9bp), US 2’s 5.12% (+0.071%), US 10’s 4.6889% (+11.79bps); US 30’s 4.80% (+0.092%), Bunds 2.917% (+7.9bp), France 3.476% (+6.1bp), Italy 4.809% (+0.9bp), Turkey 25.52% (+0bp), Greece 4.452% (+9bp), Portugal 3.681% (+8.8bp); Spain 3.994% (+4.5bp) and UK Gilts 4.556% (+11.4bp)

The above data was collected around 12:43 EST.