Market Talk – December 8, 2023

ASIA:

In November, China’s new loans are anticipated to have significantly increased compared to the previous month, surpassing the amount from the same period last year. According to a Reuters poll of 19 economists, Chinese banks are estimated to have issued 1.3 trillion yuan ($181.72 billion) in net new yuan loans, a notable rise from the 738.4 billion issued in October. This move is part of the central bank’s efforts to boost confidence and demand in the second-largest global economy. The People’s Bank of China (PBOC) has implemented supportive measures, including interest rate cuts and increased cash supply, in contrast to other major economies tightening policies to address inflation. PBOC Chief Pan Gongsheng has pledged to maintain accommodative monetary policy for post-pandemic recovery while emphasizing the need for structural reforms to reduce dependence on infrastructure and property for growth. Analysts expect further cuts in banks’ reserve requirement ratio in the coming weeks.

The Bank of Japan is expressing concern over recent weakness in consumption, posing a challenge for policymakers considering an exit from negative interest rates. Despite market expectations of an imminent rate hike following comments by BOJ Governor Kazuo Ueda, sources suggest that these expectations may be overstated. The yen and Japanese bond yields have surged on speculations of a policy change. However, concerns about consumption weakness and the need for sustained wage increases to meet inflation targets could impact the timing of any policy shift away from ultra-easy measures.

The major Asian stock markets had mixed day today:

• NIKKEI 225 decreased 550.45 points or -1.68% to 32,307.86
• Shanghai increased 3.35 points or 0.11% to 2,969.56
• Hang Seng decreased 11.52 points or -0.07% to 16,334.37
• ASX 200 increased 21.60 points or 0.30% to 7,194.90
• Kospi increased 25.78 points or 1.03% to 2,517.85
• SENSEX increased 303.91 points or 0.44% to 69,825.60
• Nifty50 increased 68.25 points or 0.33% to 20,969.40

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00229 or -0.35% to 0.65781
• NZDUSD decreased 0.00479 or -0.78% to 0.61211
• USDJPY increased 0.86 or 0.60% to 144.980
• USDCNY increased 0.02372 or 0.33% to 7.18712

The above data was collected around 15:53 EST.

Precious Metals:

Gold decreased 25.34 USD/t oz. or -1.25% to 2,003.00

Silver decreased 0.757 USD/t. oz or -3.18%% to 23.026

The above data was collected around 15:56 EST.

EUROPE/EMEA:

In November, inflation in Russia accelerated, according to data from the state statistics service Rosstat. This development solidifies expectations that the central bank will raise interest rates further during its meeting on December 15, marking the final meeting of the year. The central bank has already increased rates by 750 basis points since July, responding to pressures from a weak rouble, a tight labor market, and strong consumer demand, including an emergency hike in August. Analysts widely anticipate another hike, potentially to 16%, next week. The data suggests that annual inflation will surpass the central bank’s year-end expectation within the range of 7.0%-7.5%, well above the 4% target. On a monthly basis, the consumer price index (CPI) rose by 1.11% in November, slightly below analyst forecasts of a 1.2% increase and marking the fastest monthly rise since April 2022.

The major Europe stock markets had a green day today:

•  CAC 40 increased 98.03 points or 1.32% to 7,526.55
•  FTSE 100 increased 40.75 points, or 0.54% to 7,554.47
•  DAX 30 increased 130.23 points or 0.78% to 16,759.22

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00281 or -0.26% to 1.07639
• GBPUSD decreased 0.00422 or -0.34% to 1.25478
• USDCHF increased 0.00496 or 0.57% to 0.87986

The above data was collected around 16:01 EST.

ENERGY:

The oil markets had a mixed day today:

• Crude Oil increased 1.794 USD/BBL or 2.59% to 71.134
• Brent increased 1.619 USD/BBL or 2.19% to 75.669
• Natural gas decreased 0.0348 USD/MMBtu or -1.35% to 2.5502
• Gasoline increased 0.0571 USD/GAL or 2.85% to 2.0583
• Heating oil increased 0.0327 USD/GAL or 1.28% to 2.5819

The above data was collected around 16:02 EST.

•   Top commodity gainers: Gasoline (2.85%), Crude Oil (2.59%), Cocoa (3.57%), and Feeder Cattle (2.39%)
•   Top commodity losers: Coffee (-1.76%), Palladium (-2.21%), Oat (-9.73%), and Silver (-3.18%)

The above data was collected around 16:09 EST.

BONDS:

Japan 0.772%(+2.4bp), US 2’s 4.72% (+0.141%), US 10’s 4.2314%(+10.24bps); US 30’s 4.31% (+0.063%), Bunds 2.262% (+6.7bp), France 2.818% (+9bp), Italy 4.068% (+12.2bp), Turkey 24.18% (+35bp), Greece 3.453% (+7.6bp), Portugal 3.051% (+7.5bp), Spain 3.279% (+8.4bp) and UK Gilts 4.043% (+7.5bp).

The above data was collected around 16.18 EST.