Market Talk – October 17, 2023

ASIA:

In September, China’s consumer prices remained unchanged, despite signs of an economic recovery. This stagnation indicates ongoing deflationary pressures and weak domestic demand. The Consumer Price Index (CPI) didn’t increase from the previous year, in contrast to a 0.1% rise in August. This was lower than the 0.2% increase estimated by economists. In the first nine months of the year, the CPI increased by 0.4%, well below Beijing’s annual target of 3%. Food prices dropped by 3.2% year-on-year, and pork prices, with a significant weight in the CPI, fell by 22%. In contrast, services prices increased by 1.3% compared to the previous year. Core inflation, which excludes volatile food and energy prices, saw a 0.8% increase, consistent with the previous month.

The major Asian stock markets had a green day today:

• NIKKEI 225 increased 381.26 points or 1.20% to 32,040.29
• Shanghai increased 9.68 points or 0.32% to 3,083.50
• Hang Seng increased 132.98 points or 0.75% to 17,773.34
• ASX 200 increased 29.60 points or 0.42% to 7,056.10
• Kospi increased 23.93 points or 0.98% to 2,460.17
• SENSEX increased 261.16 points or 0.39% to 66,428.09
• Nifty50 increased 79.75 points or 0.40% to 19,811.50

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00361 or 0.57% to 0.63761
• NZDUSD decreased 0.0022 or -0.37% to 0.59050
• USDJPY increased 0.233 or 0.16% to 149.733
• USDCNY increased 0.01478 or 0.20% to 7.32228

The above data was collected around 12:45 EST.

Precious Metals:

Gold increased 4.21 USD/t oz. or 0.22% to 1,923.65

Silver increased 0.290 USD/t. oz or 1.28%% to 22.890

The above data was collected around 12:47 EST.

Some economic news from last night:

New Zealand:

CPI (YoY) (Q3) decreased from 6.0% to 5.6%

CPI (QoQ) (Q3) increased from 1.1% to 1.8%

EUROPE/EMEA:

The European Central Bank (ECB) may require until next spring before it can be certain that inflation will return to its 2% target, according to ECB chief economist Philip Lane. Despite raising rates at its last ten meetings to control rising prices, the ECB has signaled a pause for October, and markets anticipate a rate cut in mid-2024. Lane mentioned the need for more information on wage settlements for 2024, and he expects to wait until spring next year when many countries release that data before having confidence in inflation returning to 2%. He also emphasized the possibility of further rate hikes if there are significant or persistent inflation shocks.

The major Europe stock markets had a green day today:

•  CAC 40 increased 7.51 points or 0.11% to 7,029.70
•  FTSE 100 increased 44.58 points, or 0.58% to 7,675.21
•  DAX 30 increased 13.70 points or 0.09% to 15,251.69

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00261 or 0.25% to 1.05841
• GBPUSD decreased 0.00161 or -0.13% to 1.21999
• USDCHF increased 0.00042 or 0.05% to 0.90032

The above data was collected around 12:54 EST.

Some economic news from Europe today:

UK:

Average Earnings Index +Bonus (Aug) decreased from 8.5% to 8.1%

Germany:

German ZEW Current Conditions (Oct) decreased from -79.4 to -79.9

German ZEW Economic Sentiment (Oct) increased from -11.4 to -1.1

Euro Zone:

ZEW Economic Sentiment (Oct) increased from -8.9 to 2.3

US/AMERICAS:

Inflation in Canada has decreased to 3.8% in September, down from 4% in August, as grocery prices eased. The Bank of Canada has expressed concern that despite progress to date on taming price pressures, annual inflation could get stuck above the central bank’s two per cent target. The central bank’s closely watched metrics of core inflation cooled slightly last month, according to StatCan. Higher costs for mortgages and rents were the main factors fueling inflation in the month, StatCan said. The Bank of Canada has rapidly raised its benchmark interest rate by 4.75 percentage points since March 2022, but economists generally say it takes between a year and 18 months for the economy to fully absorb the impact of higher rates.

US Market Closings:

• Dow advanced 13.11 points or 0.04% to 33,997.65
• S&P 500 declined 0.43 of a point or -0.01% to 4,373.2
• Nasdaq declined 34.24 points or -0.25% to 13,533.75
• Russell 2000 advanced 18.98 points or 1.09% to 1,766.05

Canada Market Closings:

• TSX Composite advanced 72 points or 0.37% to 19,692.8
• TSX 60 advanced 3.9 points or 0.33% to 1,184.14

Brazil Market Closing:

• Bovespa declined 514.18 points or -0.44% to 116,019.67

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 0.473 USD/BBL or -0.55% to 86.187
• Brent decreased 0.385 USD/BBL or -0.43% to 89.265
• Natural gas decreased 0.0402 USD/MMBtu or -1.29% to 3.0688
• Gasoline decreased 0.0096 USD/GAL or -0.42% to 2.2634
• Heating oil increased 0.0025 USD/GAL or 0.08% to 3.1517

The above data was collected around 12:57 EST.

•   Top commodity gainers: Steel (1.73%), Coffee (1.98%), Sugar (1.55%), and Rhodium (2.94%)
•   Top commodity losers: Cotton (-2.45%), Bitumen (-3.35%), Soda Ash (-1.69%), and Oat (-1.34%)

The above data was collected around 13:04 EST.

BONDS:

Japan 0.791%(+3.9bp), US 2’s 5.21% (+0.114%), US 10’s 4.8299%(+11.99bps); US 30’s 4.93% (+0.067%), Bunds 2.885% (+10.4bp), France 3.506% (+9.7bp), Italy 4.891% (+11.3bp), Turkey 26.01% (+10bp), Greece 4.356% (+2.3bp), Portugal 3.617% (+10.7bp), Spain 4.01% (+9.8bp) and UK Gilts 4.516% (+3.3bp).

The above data was collected around 13:07 EST.