Market Talk – February 5, 2024

ASIA:

Japan’s economy likely returned to growth in the October-December period, helped by a slight pick-up in foreign demand, although analysts warned that private consumption remained fragile, a Reuters poll showed on Friday. The expected return to expansion, albeit modest, would come as the Bank of Japan debates the likelihood of a near-term exit from its massive stimulus program and closely watches upcoming wage talks and consumer spending.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 196.14 points or 0.54% to 36,354.16
• Shanghai decreased 27.97 points or -1.02% to 2,702.18
• Hang Seng decreased 23.55 points or -0.15% to 15,510.01
• ASX 200 decreased 73.50 points or -0.95% to 7,625.90
• Kospi decreased 24.00 points or -0.92% to 2,591.31
• SENSEX decreased 354.21 points or -0.49% to 71,731.42
• Nifty50 decreased 82.10 points or -0.38% to 21,771.70

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00264 or -0.41% to 0.64856
• NZDUSD decreased 0.00081 or -0.13% to 0.60549
• USDJPY increased 0.258 or 0.17% to 148.628
• USDCNY increased 0.00646 or 0.09% to 7.22056

The above data was collected around 12:41 EST.

Precious Metals:

• Gold decreased 13.21 USD/t oz. or -0.65% to 2,025.38
• Silver decreased 0.331 USD/t. oz or -1.46% to 22.341

The above data was collected around 12:45 EST.

EUROPE/EMEA:

Credit conditions in the euro-denominated securities financing and OTC derivatives markets remained unchanged during the final quarter of 2023, a survey by the European Central Bank (ECB) found. This was despite respondents to a previous ECB survey in September predicting further tightening of conditions during the final quarter of the year. The ECB released the results on February 2. The survey gathered responses from 25 major banks and traders active in the targeted euro-denominated markets.

The major Europe stock markets had a negative day today:

• CAC 40 decreased 2.30 points or -0.03% to 7,589.96
• FTSE 100 decreased 2.68 points or -0.04% to 7,612.86
• DAX 30 decreased 14.15 points or -0.08% to 16.904.06

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00431 or -0.40% to 1.07409
• GBPUSD decreased 0.00915 or -0.72% to 1.25385
• USDCHF increased 0.0037 or 0.43% to 0.87010

The above data was collected around 12:48 EST.

US/AMERICAS:

Mortgage rates in the US have surged back above 7% due to the release of robust economic data. The rapid increase in rates is attributed to the market’s overly optimistic outlook on the Federal Reserve’s rate cut, which was contradicted by the recent unfriendly economic data, including the strong January jobs report. The average rate on a 30-year fixed mortgage reached 7.04%, the highest since December, following a sharp jump after the employment report and a high monthly manufacturing report. The fluctuating rates have been influenced by the Fed’s economic impression, with even small rate swings significantly impacting monthly payments. This increase in mortgage rates reflects the market’s response to the strong economic data and its implications for the Fed’s rate cut outlook.

US Market Closings:

• Dow declined 274.3 points or -0.71% to 38,380.12
• S&P 500 declined 15.8 points or -0.32% to 4,942.81
• Nasdaq declined 31.28 points or -0.2% to 15,597.68
• Russell 2000 declined 25.49 points or -1.3% to 1,937.24

Canada Market Closings:

• TSX Composite declined 213.2 points or -1.01% to 20,871.89
• TSX 60 declined 12.52 points or -0.98% to 1,259.04

Brazil Market Closing:

• Bovespa advanced 468.57 points or 0.37% to 127,650.82

ENERGY:

The oil markets had a mixed day today:

• Crude Oil increased 0.737 USD/BBL or 1.02% to 73.017
• Brent increased 0.671 USD/BBL or 0.87% to 78.001
• Natural gas decreased 0.0168 USD/MMBtu or -0.81% to 2.0622
• Gasoline increased 0.0509 USD/GAL or 2.37% to 2.1984
• Heating oil increased 0.0483 USD/GAL or 1.82% to 2.7083

The above data was collected around 12:51 EST.

• Top commodity gainers: Gasoline (2.37%), Heating Oil (1.82%), Cocoa (4.05%) and Cheese (1.82%)
• Top commodity losers: Copper (-1.51%), Wheat (-1.97%), Orange Juice (-1.76%) and Sugar (-1.59%)

The above data was collected around 12:55 EST.

BONDS:

Japan 0.721% (+5.8bp), US 2’s 4.45% (+0.079%), US 10’s 4.1463% (+11.53bps); US 30’s 4.34% (+0.108%), Bunds 2.306% (+7.7bp), France 2.812% (+7.2bp), Italy 3.873% (+5.7bp), Turkey 24.81% (-5bp), Greece 3.400% (+12bp), Portugal 3.012% (+6.1bp); Spain 3.229% (+6.1bp) and UK Gilts 3.995% (+7.4bp)

The above data was collected around 13:00 EST.