Market Talk – January 9, 2024

ASIA:

China’s central bank is signaling a commitment to maintaining loose monetary policy by reducing the required reserves for banks. Zou Lan, head of the People’s Bank of China’s monetary policy department, stated in an interview that the central bank will use various tools, including adjusting reserve requirements, to provide strong support for reasonable credit growth. Other monetary policy tools such as open market operations and medium-term lending facilities may also be employed. Additionally, the central bank aims to strengthen counter-cyclical and cross-cycle policy adjustments to create favorable financial conditions for the country’s economic growth.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 385.76 points or 1.16% to 33,763.18
• Shanghai increased 5.71 points or 0.20% to 2,893.25
• Hang Seng decreased 34.43 points or -0.21% to 16,190.02
• ASX 200 increased 69.00 points or 0.93% to 7,520.50
• Kospi decreased 6.58 points or -0.26% to 2,561.24
• SENSEX increased 30.99 points or 0.04% to 71,386.21
• Nifty50 increased 31.85 points or 0.15% to 21,544.85

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00380 or -0.56% to 0.66804
• NZDUSD decreased 0.00190 or -0.30% to 0.62301
• USDJPY increased 0.120 or 0.08% to 144.340
• USDCNY increased 0.02560 or 0.36% to 7.18672

The above data was collected around 11:09 EST.

Precious Metals:

• Gold increased 0.04 USD/t oz. or 0.00% to 2,027.88
• Silver decreased 0.114 USD/t. oz or -0.49% to 22.971

The above data was collected around 11:13 EST.

EUROPE/EMEA:

European Central Bank (ECB) policymaker Francois Villeroy de Galhau has stated that the ECB will cut interest rates in the current year once it observes evidence that inflation expectations have stabilized in line with the 2% target. Investors anticipate multiple rate cuts, possibly starting in March or April, but Villeroy did not provide a specific timeframe, emphasizing that the decisions will be data-driven and not rushed. Euro zone inflation has been gradually decreasing, reaching 2.9% in December from 2.4% in November, primarily due to technical factors such as the end of government subsidies and the impact of low energy prices falling out of the base figures used for inflation rate calculations.

The major Europe stock markets had a negative day today:

• CAC 40 decreased 23.62 points or -0.32% to 7,426.62
• FTSE 100 decreased 10.23 points or -0.13% to 7,683.96
• DAX 30 decreased 28.11 points or -0.17% to 16.688.36

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00313 or -0.29% to 1.09177
• GBPUSD decreased 0.00512 or -0.40% to 1.26958
• USDCHF increased 0.00453 or 0.53% to 0.85243

The above data was collected around 11:16 EST.

US/AMERICAS:

The World Bank has projected that the global economy is heading for its worst half-decade of growth in 30 years. Global growth is expected to slow for the third consecutive year in 2024, dropping to 2.4% from 2.6% in 2023. The organization’s “Global Economic Prospects” report also anticipates a marginal increase to 2.7% in 2025, but this remains significantly below the average rate of the 2010s. The World Bank has warned that without a major course correction, the 2020s could be remembered as a decade of wasted opportunity. Developing economies are expected to be the hardest hit, with sluggish global trade and tight financial conditions significantly impacting their growth. This forecast aligns with the International Monetary Fund’s (IMF) projection of the global economy heading for its weakest growth since 1990, with global growth expected to be around 3% five years from now, which is the lowest forecast in over a decade.

US Market Closings:

• Dow declined 157.85 points or -0.42% to 36,525.16
• S&P 500 declined 7.04 points or -0.15% to 4,756.5
• Nasdaq advanced 13.94 points or 0.09% to 14,857.71
• Russell 2000 declined 20.97 points or -1.05% to 1,968.04

Canada Market Closings:

• TSX Composite deckubed 103.93 points or -0.49% to 20,970.98
• TSX 60 declined 7.08 points or -0.56% to 1,267.07

Brazil Market Closing:

• Bovespa declined 955.01 points or -0.72% to 131,471.53

ENERGY:

The oil markets had a green day today:

• Crude Oil increased 1.312 USD/BBL or 1.85% to 72.082
• Brent increased 1.479 USD/BBL or 1.94% to 77.599
• Natural gas increased 0.0775 USD/MMBtu or 2.60% to 3.0575
• Gasoline increased 0.0513 USD/GAL or 2.53% to 2.0791
• Heating oil increased 0.0524 USD/GAL or 2.03% to 2.6293

The above data was collected around 11:18 EST.

• Top commodity gainers: Natural Gas (2.60%), Oat (3.18%), Potatoes (4.58%) and Lean Hogs (3.04%)
• Top commodity losers: Palladium (-2.75%), Soda Ash (-1.14%), Platinum (-1.53%) and Orange Juice (-1.80%)

The above data was collected around 11:23 EST.

BONDS:

Japan 0.583% (-2.6bp), US 2’s 4.38% (+0.034%), US 10’s 4.0171% (+1.51bps); US 30’s 4.18% (+0.007%), Bunds 2.19% (+6.7bp), France 2.723% (+6.1bp), Italy 3.852% (+3.9bp), Turkey 24.37% (+0bp), Greece 3.335% (+1.2bp), Portugal 2.945% (+5.6bp); Spain 3.164% (+5.2bp) and UK Gilts 3.784% (+1.1bp)

The above data was collected around 11:27 EST.