Market Talk – October 11, 2023

ASIA:

The ruling Communist Party of China has expelled Liu Liange, the former chairman of the state-owned Bank of China, from the party due to allegations of illegal activities and bribery. The Central Commission for Discipline Inspection (CCDI) accused him of granting loans illegally, causing financial risks, importing prohibited publications, accepting bribes, and enjoying entertainment at private clubs and ski resorts. The CCDI, responsible for addressing corruption within the party, made this announcement.

The United States is in the process of revising a rule that limits the export of certain advanced chips to China, with the revision currently under final review. This suggests that there will be additional restrictions on chips that can be used for artificial intelligence. These updates are expected to close existing loopholes and enhance the restrictions initially introduced on October 7, 2022. The aim is to slow down China’s technological and military advancements to safeguard U.S. national security. U.S. officials had previously warned China about forthcoming changes to regulations governing semiconductor equipment and advanced AI chips shipments. The review process for these regulations began on October 10, as indicated on the Office of Management and Budget website.

The major Asian stock markets had a green day today:

• NIKKEI 225 increased 189.98 points or 0.60% to 31,936.51
• Shanghai increased 3.72 points or 0.12% to 3,078.96
• Hang Seng increased 228.37 points or 1.29% to 17,893.10
• ASX 200 increased 47.80 points or 0.68% to 7,088.40
• Kospi increased 47.50 points or 1.98% to 2,450.08
• SENSEX increased 393.69 points or 0.60% to 66,473.05
• Nifty50 increased 121.50 points or 0.62% to 19,811.35

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00245 or -0.38% to 0.64065
• NZDUSD decreased 0.00255 or -0.42% to 0.60185
• USDJPY increased 0.449 or 0.30% to 149.149
• USDCNY increased 0.01382 or 0.19% to 7.29932

The above data was collected around 11.21 EST.

Precious Metals:

• Gold increased 10.79 USD/t oz. or 0.58% to 1,870.88
• Silver increased 0.175 USD/t. oz or 0.80% to 21.985

The above data was collected around 11:24 EST.

No economic news from last night:

No economic news from today:

EUROPE/EMEA:

Inflation in Russia surged in September at the highest month-on-month rate since April 2022, driven by factors like a weakening rouble, a tight labor market, and strong consumer demand. The central bank of Russia has responded with successive interest rate hikes, now at 13%. September’s annual inflation reached 6.00%, up from 5.15% the previous month and slightly exceeding the 5.8% predicted in a Reuters poll, while the central bank targets a 4% inflation rate. On a monthly basis, the consumer price index (CPI) rose by 0.87% in September, which was higher than analysts’ expectations and marked the fastest monthly increase in 17 months. Additionally, weekly consumer prices increased by 0.24% in the week ending October 9.

The major Europe stock markets had a mixed day today:

• CAC 40 decreased 31.22 points or -0.44% to 7,131.21
• FTSE 100 decreased 8.18 points or -0.11% to 7,620.03
• DAX 30 increased 36.49 points or 0.24% to 15.460.01

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00138 or 0.13% to 1.06168
• GBPUSD increased 0.00165 or 0.13% to 1.23015
• USDCHF decreased 0.00154 or -0.17% to 0.90276

The above data was collected around 11:26 EST.

Some economic news from Europe today:

German CPI (MoM) (Sep) remain the same at 0.3%

German CPI (YoY) (Sep) decreased from 6.1% to 4.5%

US/AMERICAS:

The Federal Reserve’s minutes from its October 2023 meeting revealed that while there were conflicting opinions on the need for more policy tightening, there was unanimity on the point that rates would need to stay elevated until policymakers are convinced inflation is heading back to 2%. Some two-thirds of the committee indicated that one more interest rate increase would be needed before the end of the year. Since March 2022, the FOMC has raised its key interest rate 11 times, taking it to a targeted range of 5.25%-5.5%, the highest level in 22 years. The minutes also noted that “most” FOMC members see upside risks to prices, along with the potential for slower growth and higher unemployment

US Market Closings:

• Dow advanced 65.57 points or 0.19% to 33,804.87
• S&P 500 advanced 18.71 points or 0.43% to 4,376.95
• Nasdaq advanced 96.83 points or 0.71% to 13,659.68
• Russell 2000 declined 2.65 points or -0.15% to 1,773.3

Canada Market Closings:

• TSX Composite advanced 162.64 points or 0.83% to 19,663.84
• TSX 60 advanced 10.88 points or 0.93% to 1,181.14

Brazil Market Closing:

• Bovespa advanced 313.79 points or 0.27% to 117,050.74

ENERGY:

The oil markets had a negative day today:

• Crude Oil decreased 2.405 USD/BBL or -2.80% to 83.565
• Brent decreased 2.068 USD/BBL or -2.36% to 85.582
• Natural gas decreased 0.1124 USD/MMBtu or -3.32% to 3.2696
• Gasoline decreased 0.0492 USD/GAL or -2.18% to 2.2092
• Heating oil decreased 0.0555 USD/GAL or -1.84% to 2.9646

The above data was collected around 11:33 EST.

•  Top commodity gainers: HRC Steel (1.29%), Rubber (2.37%), Bitumen (3.22%) and Silver (0.80%)
•  Top commodity losers: Oat (-2.91%), Natural Gas (-3.32%), Crude Oil (-2.80%) and Brent (-2.36%)

The above data was collected around 11:33 EST.

BONDS:

Japan 0.770% (-0.6bp), US 2’s 4.99% (+0.009%), US 10’s 4.5706% (-8.44bps); US 30’s 4.72% (-0.103%), Bunds 2.714% (-6.9bp), France 3.27% (-6.7bp), Italy 4.666% (-6.4bp), Turkey 25.48% (+5bp), Greece 4.218% (-14.3bp), Portugal 3.424% (-9.2bp); Spain 3.812% (-6.9bp) and UK Gilts 4.329% (-10.1bp)

The above data was collected around 11:44 EST.