Market Talk – October 16, 2023

ASIA:

In September, India’s retail inflation decreased to 5.02%, marking a three-month low. This decline was primarily due to lower vegetable prices. However, it remained above the central bank’s target of 4%, which is necessary for interest rate cuts. This figure was lower than the forecasted rate of 5.50% in a Reuters poll. In June, retail inflation stood at 4.81%. Food inflation, a significant component of the consumer price basket, dropped to 6.56% in September from 9.94% in August. The inflation rate in September was within the Reserve Bank of India’s upper tolerance range of 2%-6%. Core inflation, excluding volatile food and energy prices, was estimated at 4.5%, a slight decrease from August. It’s worth noting that the Indian government does not publicly release core inflation figures.

The major Asian stock markets had a negative day today:

• NIKKEI 225 decreased 656.96 points or -2.03% to 31,659.03
• Shanghai decreased 14.29 points or -0.46% to 3,073.81
• Hang Seng decreased 173.09 points or -0.97% to 17,640.36
• ASX 200 decreased 24.50 points or -0.35% to 7,026.50
• Kospi decreased 19.91 points or -0.81% to 2,436.24
• SENSEX decreased 115.81 points or -0.17% to 66,166.93
• Nifty50 decreased 19.30 points or -0.10% to 19,731.75

The major Asian currency markets had a green day today:

• AUDUSD increased 0.00478 or 0.76% to 0.63388
• NZDUSD increased 0.00374 or 0.64% to 0.59214
• USDJPY increased 0.052 or 0.03% to 149.602
• USDCNY increased 0.00054 or 0.01% to 7.31204

The above data was collected around 12:25 EST.

Precious Metals:

Gold decreased 10.4 USD/t oz. or -0.54% to 1,921.30

Silver decreased 0.057 USD/t. oz or -0.25%% to 22.643

The above data was collected around 12:30 EST.

No economic news from last night:

Some economic news from today:

Japan:

Industrial Production (MoM) (Aug) increased from -1.8% to -0.7%

India:

WPI Inflation (YoY) (Sep) increased from -0.52% to -0.26%

EUROPE/EMEA:

The Bank of England is considering changes to its regulation of foreign bank branches and is planning to ease the application of global bank capital rules from mid-2025. This move comes after the recent collapse of Silicon Valley Bank in the UK and Credit Suisse, both of which were taken over by other banks, raising questions about regulations introduced after the 2008 financial crisis. The Bank of England believes that more capital and liquidity alone won’t address the issues in the banking sector and that effective supervision and sustainable bank business models are crucial. The UK, along with the US and Europe, is implementing the final phase of the stricter “Basel III” capital rules introduced after the 2008 crisis. Banks have been pushing back against the Bank of England’s Basel proposals, and it’s expected that these proposals will be adjusted based on feedback from the industry, particularly regarding issues like loans to small or unrated companies.

The major Europe stock markets had a green day today:

•  CAC 40 increased 18.66 points or 0.27% to 7,022.19
•  FTSE 100 increased 31.03 points, or 0.41% to 7,630.63
•  DAX 30 increased 51.33 points or 0.34% to 15,237.99

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00365 or 0.35% to 1.05455
• GBPUSD increased 0.00597 or 0.49% to 1.22007
• USDCHF decreased 0.00132 or -0.15% to 0.90068

The above data was collected around 12:38 EST.  

Some economic news from Europe today:

Euro Zone:

Trade Balance (Aug) increased from 6.3B to 6.7B

US/AMERICAS:

Bank of Canada Governor Tiff Macklem has stated that there are clear signs of interest rates cooling the Canadian economy, although the inflation rate remains too high. Policymakers are concerned about the lack of downward momentum in core inflation measures and are focused on analyzing how a slowing economy will influence price pressures in the future. The central bank’s next rate decision is on October 25, with traders placing a 33% chance of another 25 basis point hike at that meeting. Canada’s economy contracted in the second quarter, and households are feeling the pinch of the steep increase in borrowing costs. Macklem and his governing council held the overnight rate steady at 5% in September but left open the possibility of further tightening to tamp down any expectations for rate cuts. Statistics Canada will release inflation data for September tomorrow.

US Market Closings:

• Dow advanced 314.25 points or 0.93% to 33,984.54
• S&P 500 advanced 45.85 points or 1.06% to 4,373.63
• Nasdaq advanced 160.75 points or 1.2% to 13,567.98
• Russell 2000 advanced 27.35 points or 1.59% to 1,747.06

Canada Market Closings:

• TSX Composite advanced 157.94 points or 0.81% to 19,620.8
• TSX 60 advanced 10.27 points or 0.88% to 1,180.24

Brazil Market Closing:

• Bovespa advanced 921.79 points or 0.8% to 116,675.87

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 0.826 USD/BBL or -0.94% to 86.865
• Brent decreased 1.123 USD/BBL or -1.24% to 89.767
• Natural gas decreased 0.1508 USD/MMBtu or -4.66% to 3.0852
• Gasoline increased 0.0064 USD/GAL or 0.28% to 2.2717
• Heating oil decreased 0.0429 USD/GAL or -1.34% to 3.1688

The above data was collected around 12:41 EST.

•   Top commodity gainers: Platinum (1.16%), HRC Steel (1.31%), Cocoa (2.29%), and Rhodium (7.37%)
•   Top commodity losers: Heating Oil (-1.34%), Lean Hogs (-1.74%), Brent (-1.24%), and Natural Gas (-4.66%)

The above data was collected around 12:50 EST.

BONDS:

Japan 0.760%(-0.2bp), US 2’s 5.09% (+0.034%), US 10’s 4.7206%(+9.16bps); US 30’s 4.88% (+0.099%), Bunds 2.789% (+5.7bp), France 3.416% (+9.5bp), Italy 4.793% (+1.8bp), Turkey 25.91% (+26bp), Greece 4.37% (+9.1bp), Portugal 3.51% (+2.9bp), Spain 3.919% (+3.7bp) and UK Gilts 4.489% (+10.1bp).                                      

The above data was collected around 12:54 EST.