Market Talk – December 6, 2023

ASIA:

November, core inflation in Tokyo, Japan’s capital, slowed down, aligning with the central bank’s expectation that cost-push pressures in the country will gradually ease. Service prices, a focus for the central bank in assessing wage-driven inflation, experienced their fastest increase since 1994, primarily attributed to a spike in hotel fees due to increased tourism. The core consumer price index (CPI) for Tokyo, excluding fresh food but including fuel costs, rose 2.3% year-on-year, slightly below the market forecast of 2.4%. This slowdown was attributed to falling fuel costs and moderated price hikes for food. The Tokyo CPI is considered a leading indicator for national trends. Service prices specifically rose by 3.0% in November, according to the Tokyo CPI data.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 670.08 points or 2.04% to 33,445.90
• Shanghai decreased 3.36 points or -0.11% to 2,968.93
• Hang Seng increased 135.40 points or 0.83% to 16,463.26
• ASX 200 increased 116.80 points or 1.65% to 7,178.40
• Kospi increased 1.10 points or 0.04% to 2,495.38
• SENSEX increased 357.59 points or 0.52% to 69,653.73
• Nifty50 increased 82.60 points or 0.40% to 20,937.70

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.0001 or -0.02% to 0.65490
• NZDUSD increased 0.0009 or 0.15% to 0.61360
• USDJPY increased 0.217 or 0.15% to 147.367
• USDCNY increased 0.00233 or 0.03% to 7.17473

The above data was collected around 16:26 EST.

Precious Metals:

• Gold increased 6.39 USD/t oz. or 0.32% to 2,025.81
• Silver decreased 0.216 USD/t. oz or -0.89% to 23.909

The above data was collected around 16:27 EST.

EUROPE/EMEA:

The Bank of England announced that it will assess the risks associated with artificial intelligence (AI) and machine learning in the financial services sector next year. This decision is outlined in the bank’s semi-annual Financial Stability Review. The bank expressed concerns about potential implications arising from the increasing adoption of AI and machine learning, particularly in the financial services industry, which constitutes about 8% of the U.K. economy and has significant global connections. The Financial Policy Committee, responsible for identifying and monitoring risks, stated its commitment, along with other authorities, to ensuring the resilience of the U.K. financial system to potential risks associated with the widespread use of AI and machine learning.

The major Europe stock markets had a green day today:

• CAC 40 increased 49.00 points or 0.66% to 7,435.99
• FTSE 100 increased 25.54 points or 0.34% to 7,515.38
• DAX 30 increased 123.33 points or 0.75% to 16.656.44

The major Europe currency markets had a negative day today:

• EURUSD decreased 0.00297 or -0.28% to 1.07653
• GBPUSD decreased 0.00352 or -0.28% to 1.25578
• USDCHF decreased 0.00001 or 0.00% to 0.87479

The above data was collected around 16:30 EST.

US/AMERICAS:

Mortgage demand has surged as rates fell to their lowest level since August, with the Mortgage Bankers Association’s index of mortgage applications rising 2.8% last week. The average rate on the popular 30-year loan dropped to 7.17%, sparking fresh demand for refinancing, which surged 14% from the previous week. However, application volume remains down 17% compared with the same time last year, as the housing market continues to face chronically low inventory and an affordability crisis. The decline in rates has helped to spur more housing demand, with applications for a mortgage to purchase a home climbing 35% for the week.

US Market Closings:

• Dow declined 70.13 points or -0.19% to 36,054.43
• S&P 500 declined 17.84 points or -0.39% to 4,549.34
• Nasdaq declined 83.2 points or -0.58% to 14,146.71
• Russell 2000 declined 3.99 points or -0.22% to 1,852.05

Canada Market Closings:

• TSX Composite declined 101.72 points or -0.5% to 20,274.21
• TSX 60 declined 7.46 points or -0.61% to 1,223.34

Brazil Market Closing:

• Bovespa declined 1,280.6 points or -1.01% to 125,622.65

ENERGY:

The oil markets had a negative day today:

• Crude Oil decreased 3.109 USD/BBL or -4.30% to 69.211
• Brent decreased 2.965 USD/BBL or -3.84% to 74.235
• Natural gas decreased 0.1479 USD/MMBtu or -5.46% to 2.5621
• Gasoline decreased 0.0794 USD/GAL or -3.76% to 2.0309
• Heating oil decreased 0.0651 USD/GAL or -2.46% to 2.5760

The above data was collected around 16:32 EST.

• Top commodity gainers: Wheat (0.97%), Cheese (1.00%), Palladium (1.13%) and Lean Hogs (0.94%)
• Top commodity losers: Oat (-9.21%), Sugar (-7.86%), Natural Gas (-5.46%) and Crude Oil (-4.30%)

The above data was collected around 16:37 EST.

BONDS:

Japan 0.650% (-2.5bp), US 2’s 4.60% (+0.022%), US 10’s 4.1135% (-5.75bps); US 30’s 4.22% (-0.085%), Bunds 2.213% (-2.5bp), France 2.746% (-5.4bp), Italy 3.951% (-4.3bp), Turkey 23.28% (+29bp), Greece 3.379% (-5.3bp), Portugal 2.875% (-5.4bp); Spain 3.205% (-4.9bp) and UK Gilts 3.945% (-8.3bp)

The above data was collected around 16:39 EST.