Market Talk – January 26, 2024

ASIA:

The Bank of Japan has decided to maintain its current monetary policy, keeping the short-term interest rate at -0.1% and leaving yield curve control parameters unchanged. The bank also adjusted its economic projections, lowering the inflation forecast for the fiscal year from April to 2.4% from 2.8%. Despite these changes, the statement provided no clear indications about when the negative interest rate might be lifted, leading to a slight weakening of the yen.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 decreased 485.40 points or -1.34% to 35,751.07
• Shanghai increased 4.11 points or 0.14% to 2,910.22
• Hang Seng decreased 259.73 points or -1.60% to 15,952.23
• ASX 200 closed
• Kospi increased 8.22 points or 0.33% to 2,478.56
• SENSEX closed
• Nifty50 closed

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00048 or 0.07 to 0.65858
• NZDUSD decreased 0.00085 or -0.14% to 0.61015
• USDJPY increased 0.253 or 0.17% to 147.903
• USDCNY increased 0.00538 or 0.07% to 7.18528

The above data was collected around 11:41 EST.

Precious Metals:

• Gold decreased 1.65 USD/t oz. or -0.08% to 2,018.10
• Silver decreased 0.150 USD/t. oz or -0.65% to 22.760

The above data was collected around 11:45 EST.

EUROPE/EMEA:

The European Central Bank (ECB) has maintained its record-high interest rates at 4 percent, emphasizing its commitment to combating inflation and giving no indication of considering easing measures. Despite the end of its recent cycle of rate hikes in September, the ECB insists it is too early to discuss a reversal due to lingering price pressures and ongoing wage negotiations. Investors anticipate a shift in ECB policy, predicting five rate cuts in rapid succession from early spring. However, ECB policymakers provided no signals of such a change, making only minor adjustments to their statement and reiterating the belief that keeping interest rates at the current level for an extended period will bring inflation back to the 2 percent target.

The major Europe stock markets had a green day today:

• CAC 40 increased 169.94 points or 2.28% to 7,634.14
• FTSE 100 increased 105.36 points or 1.40% to 7,635.09
• DAX 30 increased 54.47 points or 0.32% to 16.961.39

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.0018 or 0.17% to 1.08640
• GBPUSD increased 0.00083 or 0.07% to 1.27163
• USDCHF decreased 0.00315 or -0.36% to 0.86355

The above data was collected around 11:46 EST.

US/AMERICAS:

The Federal Reserve’s preferred inflation measure, the core personal consumption expenditures (PCE) price index, rose by 0.2% in December 2023 and was up by 2.9% YoY. This increase in inflation has been a persistent challenge since the early days of the pandemic. The latest data indicates a continued shift in inflation pressures from goods to services, where traditional US economic activity is focused. Despite the acceleration in GDP growth following the Fed’s aggressive tightening campaign, core inflation fell back to the 2% target in the second half of the year. As a result, some economists suggest that it is time for Fed officials to reduce the level of policy restrictiveness. The report also reflects a shift in consumer spending patterns, with prices for services increasing while goods prices decreased. The Fed closely monitors the core PCE as it provides a longer-term indicator of inflation.

US Market Closings:

• Dow advanced 60.3 points or 0.16% to 38,109.43
• S&P 500 declined 3.19 points or -0.07% to 4,890.97
• Nasdaq declined 55.13 points or -0.36% to 15,455.36
• Russell 2000 advanced 2.45 points or 0.12% to 1,978.33

Canada Market Closings:

• TSX Composite advanced 23.74 points or 0.11% to 21,125.28
• TSX 60 advanced 1.26 points or 0.1% to 1,272.86

Brazil Market Closing:

• Bovespa advanced 840.35 points or 0.66% to 129,009.08

ENERGY:

The oil markets had a negative day today:

• Crude Oil decreased 1.006 USD/BBL or -1.30% to 76.354
• Brent decreased 0.921 USD/BBL or -1.12% to 81.509
• Natural gas decreased 0.0689 USD/MMBtu or -2.68% to 2.5021
• Gasoline decreased 0.0271 USD/GAL or -1.20% to 2.2373
• Heating oil decreased 0.0408 USD/GAL or -1.46% to 2.7546

The above data was collected around 11:50 EST.

• Top commodity gainers: Platinum (2.64%), Orange Juice (3.17%), Coffee (3.16%) and Platinum (1.77%)
• Top commodity losers: Wheat (-2.95%), Natural Gas (-2.68%), Heating Oil (-1.46%) and Crude Oil (-1.30%)

The above data was collected around 11:55 EST.

BONDS:

Japan 0.719% (-3bp), US 2’s 4.35% (+0.039%), US 10’s 4.1373% (+0.53bps); US 30’s 4.37% (-0.005%), Bunds 2.297% (+1.4bp), France 2.788% (+0.5bp), Italy 3.826% (-0.6bp), Turkey 25.19% (+24bp), Greece 3.334% (+1bp), Portugal 3.012% (+1bp); Spain 3.204% (+0.1bp) and UK Gilts 3.966% (-1.9bp)

The above data was collected around 12:01 EST.