Market Talk – February 14, 2024

ASIA:

A significant Chinese bank, Chouzhou Commercial Bank, has stopped conducting operations with Russian and Belarusian companies. Other Chinese and Hong Kong banks are reportedly imposing stricter regulations on transactions with Russia to align with Western sanctions. The Kremlin has acknowledged the strained relations between Russian companies and Chinese banks, and Russian government officials are actively working with their Chinese counterparts to address the commercial issues.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 decreased 260.65 points or -0.69% to 37,703.32
• Shanghai closed
• Hang Seng increased 132.80 points or 0.84% to 15,879.38
• ASX 200 decreased 55.90 points or -0.74% to 7,547.70
• Kospi decreased 29.22 points or -1.10% to 2,620.42
• SENSEX increased 267.64 points or 0.37% to 71,822.83
• Nifty50 increased 96.80 points or 0.45% to 21,840.05

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00388 or 0.60% to 0.64908
• NZDUSD increased 0.00285 or 0.47% to 0.60875
• USDJPY decreased 0.376 or -0.25% to 150.414
• USDCNY decreased 0.00835 or -0.12% to 7.22225

The above data was collected around 12:53 EST.

Precious Metals:

• Gold increased 2.39 USD/t oz. or 0.12% to 1,994.52
• Silver increased 0.325 USD/t. oz or 1.47% to 22.399

The above data was collected around 12:57 EST.

EUROPE/EMEA:

The British pound and government bond yields decreased, while stocks rose, following a report indicating steady U.K. inflation. The Office for National Statistics revealed that the consumer price index for January remained at 4%, contrary to expectations of a rise to 4.2%. The month-on-month rate saw an unexpected decline of minus 0.6%, with lower furniture, household goods, and food costs contributing. Core annual inflation, excluding volatile items, remained at 5.1%. Although the headline annual inflation rate is double the Bank of England’s 2% target, the market now speculates that the Bank may consider a 25 basis points interest rate cut in June, as it had expected a 4.1% figure for January.

The major Europe stock markets had a green day today:

• CAC 40 increased 52.04 points or 0.68% to 7,677.35
• FTSE 100 increased 56.12 points or 0.75% to 7,568.40
• DAX 30 increased 64.65 points or 0.38% to 16.945.48

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00228 or 0.21% to 1.07318
• GBPUSD decreased 0.00199 or -0.16% to 1.25691
• USDCHF decreased 0.00205 or -0.23% to 0.88495

The above data was collected around 13:03 EST.

 US/AMERICAS:

Mortgage rates in the US have surged, with the average rate on the 30-year fixed hitting 7.08%. This increase has caused homebuyers to pull back, leading to a 3% drop in mortgage applications for home purchases compared to the previous week and a 12% decrease from the same week a year ago. The elevated rates are adding to affordability challenges, along with low existing housing inventory, which has further subdued purchase applications. This surge in rates has led to a retreat by homebuyers and has raised concerns about the future of the housing market. Conversely, a decline in mortgage rates has previously lured homebuyers back into the market, with a recent slide in rates leading to a 9% increase in mortgage applications for home purchases.

US Market Closings:

• Dow advanced 151.52 points or 0.4% to 38,424.27
• S&P 500 advanced 47.45 points or 0.96% to 5,000.62
• Nasdaq advanced 203.55 points or 1.3% to 15,859.15
• Russell 2000 advanced 47.92 points or 2.44% to 2,012.09

Canada Market Closings:

• TSX Composite advanced 304.43 points or 1.48% to 20,889.4
• TSX 60 advanced 18.95 points or 1.53% to 1,261.05

Brazil Market Closing:

• Bovespa declined 1,205.69 points or -0.94% to 126,820.01

ENERGY:

The oil markets had a negative day today:

• Crude Oil decreased 0.824 USD/BBL or -1.06% to 77.046
• Brent decreased 0.922 USD/BBL or -1.11% to 81.848
• Natural gas decreased 0.0783 USD/MMBtu or -4.64% to 1.6107
• Gasoline decreased 0.0689 USD/GAL or -2.88% to 2.3257
• Heating oil decreased 0.0842 USD/GAL or -2.91% to 2.8117

The above data was collected around 13:07 EST.

• Top commodity gainers: Cotton (2.43%), Lean Hogs (4.41%), Palladium (7.88%) and HRC Steel (2.39%)
• Top commodity losers: Wheat (-2.92%), Natural Gas (-4.64%), Gasoline (-2.88%) and Heating Oil (-2.91%)

The above data was collected around 13:15 EST.

BONDS:

Japan 0.756% (+3.1bp), US 2’s 4.56% (-0.097%), US 10’s 4.2495% (-6.65bps); US 30’s 4.43% (-0.036%), Bunds 2.324% (-6.8bp), France 2.828% (-6.2bp), Italy 3.840% (-10.3bp), Turkey 23.85% (-19bp), Greece 3.408% (-1.3bp), Portugal 3.035% (-6.2bp); Spain 3.250% (-8.9bp) and UK Gilts 4.03% (-12.3p)

The above data was collected around 13:18 EST.