Market Talk – October 18, 2023

ASIA:

Japan’s Prime Minister Fumio Kishida announced plans for a new economic stimulus package to address the challenges of rising prices and stagnant wages. The package will focus on protecting people from inflation, promoting sustainable wage growth, domestic investment, addressing population decline, and encouraging infrastructure investment. Kishida intends to shift Japan’s economic focus away from cost-cutting practices. He also expressed concern about currency devaluation, particularly in relation to the yen, due to its potential impact on import costs for food and energy.

The major Asian stock markets had mixed day today:

• NIKKEI 225 increased 1.96 points or 0.01% to 32,042.25
• Shanghai decreased 24.79 points or -0.80% to 3,058.71
• Hang Seng decreased 40.82 points or -0.23% to 17,732.52
• ASX 200 increased 21.50 points or 0.30% to 7,077.60
• Kospi increased 2.43 points or 0.10% to 2,462.60
• SENSEX decreased 551.07 points or -0.83% to 65,877.02
• Nifty50 decreased 140.40 points or -0.71% to 19,671.10

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00244 or -0.38% to 0.63386
• NZDUSD decreased 0.00366 or -0.62% to 0.58584
• USDJPY increased 0.06 or 0.04% to 149.860
• USDCNY increased 0.00425 or 0.06% to 7.32905

The above data was collected around 11:29 EST.

Precious Metals:

Gold increased 22.36 USD/t oz. or 1.16% to 1,945.43

Silver decreased 0.046 USD/t. oz or -0.20%% to 22.779

The above data was collected around 11:34 EST.

Some economic news from last night:

China:

Chinese Unemployment Rate (Sep) decreased from 5.2% to 5.0%

Fixed Asset Investment (YoY) (Sep) decreased from 3.2% to 3.1%

GDP (YoY) (Q3) decreased from 6.3% to 4.9%

GDP (QoQ) (Q3) increased from 0.5% to 1.3%

Chinese GDP YTD (YoY) (Q3) decreased from 5.5% to 5.2%

Industrial Production (YoY) (Sep) remain the same at 4.5%

Chinese Industrial Production YTD (YoY) (Sep) increased from 3.9% to 4.0%

EUROPE/EMEA:

The Swedish economy contracted by 0.8% in the second quarter, which is a smaller decline than the initial estimate of 1.5% and better than the 1.3% decline expected by analysts. On a year-on-year basis, GDP was down by 1.0%. Despite challenges like inflation, higher interest rates, a volatile property market, and global uncertainties, the Swedish economy had been relatively strong in previous quarters, with 2022 showing a 2.8% expansion. However, the government recently lowered its GDP forecast for the year to a 0.8% contraction, while the central bank’s forecast from June was a 0.5% decline.

The major Europe stock markets had a negative day today:

•  CAC 40 decreased 63.71 points or -0.91% to 6,965.99
•  FTSE 100 decreased 87.21 points, or -1.14% to 7,588.00
•  DAX 30 decreased 156.78 points or -1.03% to 15,094.91

The major Europe currency markets had a negative day today:

• EURUSD decreased 0.00444 or -0.42% to 1.05306
• GBPUSD decreased 0.00337 or -0.28% to 1.21443
• USDCHF decreased 0.00165 or -0.18% to 0.89845

The above data was collected around 11:36 EST.

Some economic news from Europe today:

UK:

CPI (MoM) (Sep) increased from 0.3% to 0.5%

CPI (YoY) (Sep) remain the same at 6.7%

PPI Input (MoM) (Sep) decreased from 0.8% to 0.4%

Euro Zone:

Core CPI (YoY) (Sep) decreased from 5.3% to 4.5%

CPI (YoY) (Sep) decreased from 5.2% to 4.3%

CPI (MoM) (Sep) decreased from 0.5% to 0.3%

US/AMERICAS:

Architecture firms in the US reported a sharp drop in business in September, indicating that the commercial real estate market could be in trouble. The AIA/Deltek Architecture Billings Index dropped to 44.8 in September, the lowest score since December 2020, during the height of the pandemic. Any score below 50 indicates worsening business conditions. The score shows a growing number of architecture firms are reporting a drop in billings. The index is a forward-looking indicator of demand for non-residential construction activity, both commercial and industrial buildings. It aims to predict construction activity nine to 12 months out. The hesitance among clients to commit to new projects with a slump in newly signed design contracts has led to backlogs at architecture firms falling to 6.5 months on average in the third quarter, their lowest level since the fourth quarter of 2021. While all regions of the country are seeing a decline, the West is deepest, as the return to office there has been slower than in other areas. Among real estate sectors, firms with a multi-family focus are seeing the most significant decline in business.

US Market Closings:

• Dow declined 332.57 points or -0.98% to 33,665.08
• S&P 500 declined 58.6 points or -1.34% to 4,314.6
• Nasdaq declined 219.45 points or -1.62% to 13,314.3
• Russell 2000 declined 37.24 points or -2.11% to 1,728.81

Canada Market Closings:

• TSX Composite declined 242.1 points or -1.23% to 19,450.7
• TSX 60 declined 14.5 points or -1.22% to 1,169.64

Brazil Market Closing:

• Bovespa declined 1,920.76 points or -1.66% to 113,987.67

ENERGY:

The oil markets had a mixed day today:

• Crude Oil increased 1.162 USD/BBL or 1.34% to 87.822
• Brent increased 1.225 USD/BBL or 1.36% to 91.125
• Natural gas increased 0.0109 USD/MMBtu or 0.35% to 3.0899
• Gasoline increased 0.0445 USD/GAL or 1.95% to 2.3290
• Heating oil decreased 0.0468 USD/GAL or -1.47% to 3.1299

The above data was collected around 11:40 EST.

•   Top commodity gainers: Gasoline (1.95%), Brent (1.36%), Cheese (1.65%), and Rhodium (2.86%)
•   Top commodity losers: Methanol (-2.56%), Palladium (-2.02%), Platinum (-1.85%), and Tea (-2.81%)

The above data was collected around 11:52 EST.

BONDS:

Japan 0.815%(+3.3bp), US 2’s 5.24% (+0.024%), US 10’s 4.9149%(+6.79bps); US 30’s 5.02% (+0.069%), Bunds 2.920% (+3.8bp), France 3.555% (+5.2bp), Italy 4.987% (+9.5bp), Turkey 26.35% (+34bp), Greece 4.427% (+5.8bp), Portugal 3.68% (+7.5bp), Spain 4.056% (+5.2bp) and UK Gilts 4.656% (+14.4bp).

The above data was collected around 11:55 EST.