Market Talk – October 31, 2023

ASIA:

China’s economy faces instability post-lockdown, with slowed trade and a substantial $9 trillion debt burden. Additionally, there’s a concerning issue with employing young college graduates, as the youth unemployment rate for ages 16 to 24 reached a record 21% in May 2023, compared to the US rate of 7.4% in the same month. This high youth unemployment could impact productivity in China, which might affect the US, as it relies heavily on China for goods and services. Despite efforts to reduce dependence on China, it remains a significant export market for the US, with substantial trade volumes in 2022.

Indian financial markets are expected to remain stable despite the inclusion of the country’s government bonds in J.P. Morgan’s emerging market debt index. This inclusion is anticipated to attract significant investment into India, aiding its economy and deficits. While India experienced strong economic growth in the April-June quarter, a dry monsoon season may limit future growth. The Reserve Bank of India Governor, Shaktikanta Das, highlighted that the primary global threat to the economy is geopolitical risks but expressed confidence in India’s ability to handle such uncertainties effectively.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 161.89 points or 0.53% to 30,858.85
• Shanghai decreased 2.78 points or -0.09% to 3,018.77
• Hang Seng decreased 293.88 points or -1.69% to 17,112.48
• ASX 200 increased 7.80 points or 0.12% to 6,780.70
• Kospi decreased 32.56 points or -1.41% to 2,277.99
• SENSEX decreased 237.72 points or -0.37% to 63,874.93
• Nifty50 decreased 61.30 points or -0.32% to 19,079.60

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00309 or -0.48% to 0.63431
• NZDUSD decreased 0.00168 or -0.29% to 0.58242
• USDJPY increased 2.441 or 1.64% to 151.541
• USDCNY increased 0.01759 or 0.24% to 7.34149

The above data was collected around 15:39 EST.

Precious Metals:

• Gold decreased 11.07 USD/t oz. or -0.55% to 1,984.81
• Silver decreased 0.449 USD/t. oz or -1.93% to 22.859

The above data was collected around 15:45 EST.

No economic news from last night:

No economic news from today:

EUROPE/EMEA:

ECB policymaker Joachim Nagel emphasized the need for the European Central Bank to maintain relatively high interest rates for an extended period to combat inflation in the euro zone, even though inflation has decreased in the past year. Nagel, the Bundesbank’s president, stressed the importance of not prematurely easing their monetary policy and suggested that key interest rates should stay high for an extended duration. He noted that it’s too early to determine whether interest rates have peaked, despite some colleagues expressing hope that the recent rate hike would be the last, with one even mentioning the possibility of a rate cut next year. This comes as recent data revealed that in October, prices in the euro zone rose by just 2.9%, the slowest pace since July 2021, and an inflation measure that excludes certain items also decreased.

The major Europe stock markets had a mixed day today:

• CAC 40 increased 60.58 points or 0.89% to 6,885.65
• FTSE 100 decreased 5.67 points or -0.08% to 7,321.72
• DAX 30 increased 93.80 points or 0.64% to 14.810.34

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.0031 or -0.29% to 1.05820
• GBPUSD decreased 0.00153 or -0.13% to 1.21527
• USDCHF increased 0.0078 or 0.86% to 0.90960

The above data was collected around 15:48 EST.

US/AMERICAS:

President Joe Biden will meet with Chinese President Xi Jinping next month on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco, according to the White House. The two leaders are expected to have a “tough conversation” following discussions by Secretary of Treasury Janet Yellen. The meeting comes as the US works to rush security assistance and humanitarian aid to Israel amid an intensifying conflict with Hamas. The US economy grew at a 4.9% annualized pace in Q3 2023, exceeding expectations and marking the biggest gain since Q4 2021. ON Semiconductor shares fell 20% after the company offered weaker-than-expected guidance for its fourth quarter.

US Market Closings:

• Dow advanced 123.91 points or 0.38% to 33,052.87
• S&P 500 advanced 26.98 points or 0.65% to 4,193.8
• Nasdaq advanced 61.76 points or 0.48% to 12,851.24
• Russell 2000 advanced 14.99 points or 0.91% to 1,662.28

Canada Market Closings:

• TSX Composite advanced 16.71 points or 0.09% to 18,873.47
• TSX 60 advanced 1.03 points or 0.09% to 1,132.93

Brazil Market Closing:

• Bovespa advanced 612.15 points or 0.54% to 113,143.67

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 1.021 USD/BBL or -1.24% to 81.289
• Brent decreased 1.276 USD/BBL or -1.48% to 85.073
• Natural gas increased 0.2448 USD/MMBtu or 7.30% to 3.5968
• Gasoline increased 0.0027 USD/GAL or 0.12% to 2.2195
• Heating oil increased 0.0362 USD/GAL or 1.26% to 2.9203

The above data was collected around 15:50 EST.

• Top commodity gainers: Natural Gas (7.30%), Sugar (1.27%), Orange Juice (1.40%) and Coffee (5.15%)
• Top commodity losers: Coal (-5.73%), Cotton (-2.04%), Oat (-4.09%) and Silver (-1.93%)

The above data was collected around 15:56 EST.

BONDS:

Japan 0.951% (+5.9bp), US 2’s 5.07% (+0.028%), US 10’s 4.9030% (+2.6bps); US 30’s 5.06% (+0.023%), Bunds 2.826% (-0.1bp), France 3.442% (+0.1bp), Italy 4.726% (-1.4bp), Turkey 26.37% (-7bp), Greece 4.184% (+3.2bp), Portugal 3.511% (-0.8bp); Spain 3.911% (+1.1bp) and UK Gilts 4.515% (-4.7bp)

The above data was collected around 15:59 EST.