Market Talk – November 1, 2023

ASIA:

The Bank of Japan has removed its 10-year bond yield ceiling of 1%, challenging the long-standing belief in a central bank ‘put.’ This belief, dating back to the days of Alan Greenspan, suggested that central banks like the Federal Reserve would always step in to support falling asset markets with monetary easing. The distinction between maintaining financial stability and bolstering asset markets became less clear after the 2008 financial crisis.

The major Asian stock markets had mixed day today:

• NIKKEI 225 increased 742.80 points or 2.41% to 31,601.65
• Shanghai increased 4.31 points or 0.14% to 3,023.08
• Hang Seng decreased 10.70 points or -0.06% to 17,101.78
• ASX 200 increased 57.60 points or 0.85% to 6,838.30
• Kospi increased 23.57 points or 1.03% to 2,301.56
• SENSEX decreased 283.60 points or -0.44% to 63,591.33
• Nifty50 decreased 90.45 points or -0.47% to 18,989.15

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00378 or 0.60% to 0.63738
• NZDUSD increased 0.00010 or 0.02% to 0.58260
• USDJPY decreased 0.621 or -0.41% to 151.049
• USDCNY decreased 0.00497 or -0.07% to 7.33683

The above data was collected around 14:08 EST.

Precious Metals:

Gold decreased 3.88 USD/t oz. or -0.20% to 1,978.82

Silver decreased 0.19 USD/t. oz or -0.83%% to 22.710

The above data was collected around 14:11 EST.

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Some economic news from last night:

China:

Caixin Manufacturing PMI (Oct) decreased from 50.6 to 49.5

Australia:

Building Approvals (MoM) (Sep) decreased from 8.1% to -4.6%

No economic news from today:

EUROPE/EMEA:

European Central Bank policymakers are considering a review of the interest rates paid on government cash deposits, potentially reducing them, to address growing losses incurred in their efforts to combat inflation. The ECB and the 20 eurozone central banks have experienced significant losses due to increased interest rates on deposits aimed at curbing lending and inflation. To mitigate these losses, discussions on the remuneration of government deposits were brought up at a recent policy meeting.

The major Europe stock markets had a green day today:

•  CAC 40 increased 46.98 points or 0.68% to 6,932.63
•  FTSE 100 increased 20.71 points, or 0.28% to 7,342.43
•  DAX 30 increased 112.93 points or 0.76% to 14,923.27

The major Europe currency markets had a negative day today:

• EURUSD decreased 0.00492 or -0.47% to 1.05268
• GBPUSD decreased 0.0044 or -0.36% to 1.21080
• USDCHF decreased 0.00016 or -0.02% to 0.91024

The above data was collected around 14:16 EST.

Some economic news from Europe today:

Swiss:

procure.ch PMI (Oct) decreased from 44.9 to 40.6

UK:

S&P Global/CIPS UK Manufacturing PMI (Oct) increased from 44.3 to 44.8

Nationwide HPI (MoM) (Oct) increased from 0.1% to 0.9%

Nationwide HPI (YoY) (Oct) increased from -5.3% to -3.3%

US/AMERICAS:

The Federal Reserve’s rate-setting group, the Federal Open Market Committee, has unanimously agreed to hold the key federal funds rate in a target range between 5.25%-5.5%, where it has been since July, for the second consecutive meeting, following a string of 11 rate hikes, including four in 2023. The decision included an upgrade to the committee’s general assessment of the economy. The Fed’s restrictive stance has been a factor in the surging bond yields. Chairman Jerome Powell is expected to address the rising yields, as well as his views on growth, the labor market, and inflation. Private sector payrolls in the US rose by 113,000 in October, according to the ADP National Employment Report. The figure was higher than the 89,000 in September but below the Dow Jones consensus estimate of 130,000.

Private sector payrolls in the US rose by 113,000 in October, according to the ADP National Employment Report. The figure was higher than the 89,000 in September but below the Dow Jones consensus estimate of 130,000. The report suggests that the employment picture could be darkening, as private sector payroll growth increased modestly but missed expectations. The report also showed that pay was up 5.7% from a year ago, the smallest annual gain since October 2021. Education and health services led with 45,000 new jobs, while other notable gainers included trade, transportation and utilities, financial activities, and leisure and hospitality.

US Market Closings:

• Dow advanced 221.71 points or 0.67% to 33,274.58
• S&P 500 advanced 44.06 points or 1.05% to 4,237.86
• Nasdaq advanced 210.23 points or 1.64% to 13,061.47
• Russell 2000 advanced 7.42 points or 0.45% to 1,669.7

Canada Market Closings:

• TSX Composite advanced 205.53 points or 1.09% to 1,145.62
• TSX 60 advanced 12.69 points or 1.12% to 1,145.62

Brazil Market Closing:

• Bovespa advanced 1,909.29 points or 1.69% to 115,052.96

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 0.606 USD/BBL or -0.75% to 80.414
• Brent decreased 0.264 USD/BBL or -0.31% to 84.756
• Natural gas decreased 0.0881 USD/MMBtu or -2.46% to 3.4869
• Gasoline decreased 0.032 USD/GAL or -1.44% to 2.1853
• Heating oil increased 0.0591 USD/GAL or 2.03% to 2.9691

The above data was collected around 14:18 EST.

•   Top commodity gainers: Milk (2.19%), Tea (5.96%), Rapeseed (7.77%), and Zinc (2.80%)
•   Top commodity losers: Coffee (-4.48%), Oat (-2.25%), Coal (-4.90%), and Natural Gas (-2.46%)

The above data was collected around 14:25 EST.

BONDS:

Japan 0.957%(+0.6bp), US 2’s 5.01% (-0.065%), US 10’s 4.8056%(-6.94bps); US 30’s 4.98% (-0.044%), Bunds 2.761% (-4.6bp), France 3.378% (-5.2bp), Italy 4.675% (-5.1bp), Turkey 26.50% (+13bp), Greece 4.327% (+16.7bp), Portugal 3.455% (-5.6bp), Spain 3.836% (-5bp) and UK Gilts 4.493% (-2.2bp).

The above data was collected around 14:29 EST.