Market Talk – January 31, 2024

ASIA:

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 220.85 points or 0.61% to 36,286.71
• Shanghai decreased 41.98 points or -1.48% to 2,788.55
• Hang Seng decreased 218.38 points or -1.39% to 15,485.07
• ASX 200 increased 80.50 points or 1.06% to 7,680.70
• Kospi decreased 1.72 points or -0.07% to 2,497.09
• SENSEX increased 612.21 points or 0.86% to 71,752.11
• Nifty50 increased 203.60 points or 0.95% to 21,725.70

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00003 or 0.00 to 0.66013
• NZDUSD increased 0.00097 or 0.16% to 0.61457
• USDJPY decreased 1.322 or -0.90% to 146.278
• USDCNY decreased 0.00861 or -0.12% to 7.17839

The above data was collected around 11:36 EST.

Precious Metals:

• Gold increased 14.57 USD/t oz. or 0.72% to 2,050.69
• Silver decreased 0.038 USD/t. oz or -0.16% to 23.126

The above data was collected around 11:38 EST.

EUROPE/EMEA:

British house prices rose by 0.7% in January, exceeding economists’ expectations of a 0.1% increase, according to Nationwide Building Society. This suggests a potential easing of the impact from high-interest rates. Although prices were 0.2% lower than a year earlier, it marks the smallest annual decline since January 2023. Over the three months to January, prices increased by 1.1%, the fastest growth since July 2022. The Bank of England is expected to maintain its Bank Rate at 5.25%, but there may be room for interest rate cuts later in the year as inflation forecasts are adjusted. Average mortgage rates fell in December, and mortgage approvals reached their highest since June, though still 25% below pre-pandemic levels.

The major Europe stock markets had a negative day today:

• CAC 40 decreased 20.72 points or -0.27% to 7,656.75
• FTSE 100 decreased 35.74 points or -0.47% to 7,630.57
• DAX 30 decreased 68.58 points or -0.40% to 16.903.76

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.0008 or 0.07% to 1.08480
• GBPUSD increased 0.00236 or 0.19% to 1.27206
• USDCHF decreased 0.00241 or -0.28% to 0.85919

The above data was collected around 11:40 EST.

US/AMERICAS:

Federal Reserve Chair Jerome Powell stated that the central bank is unlikely to cut interest rates in March. He mentioned that the Fed would not be comfortable enough with the path of inflation by its March meeting to justify a rate cut. Powell’s comments came after the Fed’s January meeting, where the central bank left its benchmark interest rate unchanged. He also indicated that while rate cuts might occur at some point this year, the decision would depend on the data. Powell’s remarks led to a decline in stock prices as they dashed hopes of an earlier rate cut. The next two policy decision dates for the Fed are scheduled for March 20 and May 1, and Powell’s comments suggested that the current stance would continue for at least one more meeting. The FOMC’s policy statement omitted language suggesting further rate hikes but did not indicate an immediate readiness to cut rates. Powell emphasized the need for more evidence of easing inflation before considering rate cuts and expressed skepticism about a rate cut at the March meeting. Overall, Powell’s statements and the FOMC’s policy stance indicate a cautious approach to rate cuts, with a focus on data-dependent decision-making and a lack of immediate urgency to reduce rates.

US Market Closings:

• Dow declined 317.01 points or -0.82% to 38,150.3
• S&P 500 declined 79.32 points or -1.61% to 4,845.65
• Nasdaq declined 345.89 points or -2.23% to 15,164.01
• Russell 2000 declined 48.9 points or -2.45% to 1,947.34

Canada Market Closings:

• TSX Composite declined 205.99 points or -0.97% to 21,021.88
• TSX 60 declined 12.11 points or -0.95% to 1,268.16

Brazil Market Closing:

• Bovespa advanced 695.05 points or 0.55% to 128,096.86

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 2.107 USD/BBL or -2.71% to 75.713
• Brent decreased 1.828 USD/BBL or -2.22% to 80.672
• Natural gas increased 0.0694 USD/MMBtu or 3.34% to 2.1464
• Gasoline decreased 0.0699 USD/GAL or -3.04% to 2.2269
• Heating oil increased 0.0022 USD/GAL or 0.08% to 2.7788

The above data was collected around 11:42 EST.

• Top commodity gainers: Natural Gas (3.34%), Cheese (3.16%), Milk (6.18%) and Orange Juice (2.00%)
• Top commodity losers: HRC Steel (-9.91%), Gasoline (-3.04%), Crude Oil (-2.71%) and Brent (-2.22%)

The above data was collected around 11:47 EST.

BONDS:

Japan 0.716% (+0.4bp), US 2’s 4.23% (-0.132%), US 10’s 3.9596% (-9.74bps); US 30’s 4.21% (-0.070%), Bunds 2.165% (-10.8bp), France 2.663% (-9.7bp), Italy 3.727% (-7.7bp), Turkey 25.10% (-3bp), Greece 3.223% (-4.5bp), Portugal 2.881% (-8.6bp); Spain 3.09% (-8.8bp) and UK Gilts 3.793% (-10.9bp)

The above data was collected around 11:50 EST.