Market Talk – January 25, 2024

ASIA:

China has announced a plan to boost its struggling economy by reducing the reserve ratio requirements for banks by 50 basis points, effective from February 5. This move, the first reduction in reserve requirements for the year, is expected to release 1 trillion yuan ($139.8 billion) in long-term capital. The decision was announced by Pan Gongsheng, the governor of the People’s Bank of China, who stated that there is room for further monetary policy easing. Lowering reserve requirements will enhance the ability of banks to extend loans, promoting increased spending in the broader economy.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 9.99 points or 0.03% to 36,236.47
• Shanghai increased 85.34 points or 3.03% to 2,906.11
• Hang Seng increased 312.09 points or 1.96% to 16,211.96
• ASX 200 increased 36.20 points or 0.48% to 7,555.40
• Kospi increased 0.65 points or 0.03% to 2,470.34
• SENSEX decreased 359.64 points or -0.51% to 70,700.67
• Nifty50 decreased 101.35 points or -0.47% to 21,352.60

The major Asian currency markets had a green day today:

• AUDUSD increased 0.00037 or 0.06 to 0.65797
• NZDUSD increased 0.00033 or 0.05% to 0.61133
• USDJPY increased 0.101 or 0.07% to 147.601
• USDCNY increased 0.02142 or 0.30% to 7.18212

The above data was collected around 11:01 EST.

Precious Metals:

• Gold increased 8.77 USD/t oz. or 0.44% to 2,021.36
• Silver increased 0.169 USD/t. oz or 0.74% to 22.864

The above data was collected around 11:05 EST.

EUROPE/EMEA:

European stock markets experienced a decline as investors adopted a cautious stance, awaiting updates from the latest policy-setting meeting of the European Central Bank. As of 03:05 ET (08:05 GMT), the DAX index in Germany traded 0.3% lower, the CAC 40 in France was down 0.2%, and the FTSE 100 in the U.K. fell by 0.2%.

ECB policymakers are convening in Frankfurt to decide on monetary policy for the eurozone. While the central bank is expected to maintain interest rates at record highs in this meeting, there is uncertainty about when officials will determine that inflation is no longer a concern, potentially allowing for rate cuts to stimulate economic growth in the bloc. Initially, markets anticipated a rate cut in April, but expectations have been tempered in recent weeks as policymakers have pushed back on aggressive pricing, especially after the eurozone Consumer Price Index rose to 2.9% in December from 2.4% the previous month.

The major Europe stock markets had a green day today:

• CAC 40 increased 8.56 points or 0.11% to 7,464.20
• FTSE 100 increased 2.06 points or 0.03% to 7,529.73
• DAX 30 increased 17.00 points or 0.10% to 16.906.92

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00515 or -0.47% to 1.08315
• GBPUSD decreased 0.00223 or -0.18% to 1.27007
• USDCHF increased 0.00489 or 0.57% to 0.86759

The above data was collected around 11:07 EST.

US/AMERICAS:

The U.S. economy experienced a robust growth, with the gross domestic product (GDP) increasing at a 3.3% annualized rate in the fourth quarter of 2023, surpassing the Wall Street expectation of 2%. The strong expansion was driven by a vigorous pace of consumer spending and government spending. Additionally, there was progress on inflation, with core prices for personal consumption expenditures rising 2% for the period, while the headline rate was 1.7%. The full-year GDP for 2023 accelerated at a 2.5% annualized pace, outperforming the earlier Wall Street outlook. This growth was supported by a strong labor market, consumer spending, business investment, net exports, and easing inflation

US Market Closings:

• Dow advanced 242.74 points or 0.64% to 38,049.13
• S&P 500 advanced 25.61 points or 0.53% to 4,894.16
• Nasdaq advanced 28.58 points or 0.18% to 15,510.5
• Russell 2000 advanced 14.01 points or 0.71% to 1,975.88

Canada Market Closings:

• TSX Composite advanced 75.76 points or 0.36% to 21,101.54
• TSX 60 advanced 4.04 points or 0.32% to 1,271.6

Brazil Market Closing:

• Bovespa advanced 353.03 points or 0.28% to 128,168.73

ENERGY:

The oil markets had a green day today:

• Crude Oil increased 1.2 USD/BBL or 1.60% to 76.290
• Brent increased 1.071 USD/BBL or 1.34% to 81.111
• Natural gas increased 0.0042 USD/MMBtu or 0.16% to 2.6452
• Gasoline increased 0.0173 USD/GAL or 0.78% to 2.2268
• Heating oil increased 0.0598 USD/GAL or 2.23% to 2.7416

The above data was collected around 11:10 EST.

• Top commodity gainers: Heating Oil (2.23%), Crude Oil (1.60%), Brent (1.34%) and Steel (0.87%)
• Top commodity losers: Soybeans (-1.83%), Cocoa (-2.63%), Coffee (-1.85%) and Palladium (-2.38%)

The above data was collected around 11:23 EST.

BONDS:

Japan 0.745% (+2.3bp), US 2’s 4.32% (-0.058%), US 10’s 4.1318% (-4.62bps); US 30’s 4.37% (-0.048%), Bunds 2.285% (-5bp), France 2.775% (-6.7bp), Italy 3.824% (-8.3bp), Turkey 24.95% (+23bp), Greece 3.297% (-4.5bp), Portugal 3.004% (-5.6bp); Spain 3.194% (-7.3bp) and UK Gilts 3.977% (-3.4bp)

The above data was collected around 11:26 EST.