Market Talk – July 7, 2022

ASIA:

Japanese Ambassador to Sri Lanka Mizukoshi Hideaki on Friday said that Japan is ready to support Sri Lanka for its economic program with the International Monetary Fund (IMF) and for the development activities of the country. The President’s Media Division said that during the discussion between the Japanese Ambassador and Sri Lanka President Gotabaya Rajapaksa, Hideaki said that continuous efforts will be made to further strengthen the economic, social, and cultural relations with island nations, Daily Mirror Online reported. Sri Lankan President Rajapaksa during the discussion, expressed his deep appreciation to Japan for its support to Sri Lanka.

The major Asian stock markets had a green day today:

• NIKKEI 225 increased 382.88 points or 1.47% to 26,490.53
• Shanghai increased 9.05 points or 0.27% to 3,364.40
• Hang Seng increased 56.92 points or 0.26% to 21,643.58
• ASX 200 increased 53.50 points or 0.81% to 6,648.00
• Kospi increased 42.26 points or 1.84% to 2,334.27
• SENSEX increased 427.49 points or 0.80% to 54,178.46
• Nifty50 increased 143.10 points or 0.89% to 16,132.90

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00611 or 0.90% to 0.68436
• NZDUSD increased 0.00305 or 0.50% to 0.61775
• USDJPY increased 0.11 or 0.08% to 136.087
• USDCNY decreased 0.02315 or -0.34% to 6.69155

Precious Metals:

l Gold increased 1.59 USD/t oz. or 0.09% to 1,739.89

l Silver increased 0.057 USD/t. oz or 0.30% to 19.238

Some economic news from last night:

Japan:

Foreign Bonds Buying increased from -1,599.3B to -1,415.4B

Foreign Investments in Japanese Stocks decreased from -419.1B to -490.4B

Foreign Reserves (USD) (Jun) decreased from 1,329.7B to 1,311.3B

South Korea:

Current Account (May) increased from -0.08B to 3.86B

Australia:

AIG Services Index (Jun) decreased from 49.2 to 48.8

Exports (MoM) (May) increased from 1% to 9%

Imports (MoM) (May) increased from -1% to 6%

Trade Balance (May) increased from 10.495B to 15.965B

Some economic news from today:

China:

FX Reserves (USD) (Jun) decreased from 3.128T to 3.071T

Japan:

Coincident Indicator (MoM) (May) decreased from 0.0% to -1.3%

Leading Index (MoM) (May) decreased from 2.1% to -1.5%

Leading Index decreased from 102.9 to 101.4

Hong Kong:

Foreign Reserves (USD) (Jun) decreased from 465.00B to 447.30B

SIngapore:

Foreign Reserves USD (MoM) (Jun) decreased from 345.3B to 314.3B

EUROPE/EMEA:

Europe faces a rising risk of recession because of rising oil and gas prices amid concerns that Russia could turn off supplies completely, Reuters reported. Europe’s economy will be hit by a variety of factors including falling demand in the US its biggest export market, the continued fallout from Russia’s invasion of Ukraine and related increases in food and energy prices, according to Nomura, a Japanese investment bank with significant operations in London, The Guardian reported.

The major Europe stock markets had a green day:

• CAC 40 increased 94.32 points or 1.60% to 6,006.70

• FTSE 100 increased 81.31 points or 1.14% to 7,189.08

• DAX 30 increased 248.70 points or 1.97% to 12,843.22

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.0022 or -0.22% to 1.01632

• GBPUSD increased 0.00981 or 0.82% to 1.20193

• USDCHF increased 0.00365 or 0.38% to 0.97425

Some economic news from Europe today:

Swiss:

Unemployment Rate n.s.a. (Jun) decreased from 2.1% to 2.0%

Unemployment Rate s.a. (Jun) remain the same at 2.2%

Germany:

German Industrial Production (MoM) (May) decreased from 1.3% to 0.2%

France:

French Reserve Assets Total (Jun) increased from 237,654.0M to 240,187.0M

UK:

Halifax House Price Index (MoM) (Jun) increased from 1.2% to 1.8%

Halifax House Price Index (YoY) increased from 10.5% to 13.0%

Labour Productivity decreased from 0.3% to -0.8%

US/AMERICAS:

The Federal Reserve is ready to tighten monetary policy if inflation continues to rise, according to the minutes report released this Wednesday. We should expect to see a 50 to  75 basis point rate hike during the July meeting. The central bank members anticipate inflation continually rising and ongoing increases in the target range for the federal funds rate would be appropriate to achieve the Committee’s objectives.” The 2% target is still seen as critical to maximum sustainable employment, but the 8.6% figure posted last month leaves a reason for concern.

The US central bank also lowered its GDP forecast for 2022 from 2.8% to 1.7%. Consumer sales, a highly watched figure among the Fed, is declining as are investments. Headline personal consumption expenditures are expected to spike 5.2% in 2022, up from the 4.3% estimate provided earlier.

Weekly initial unemployment claims in the US rose by 4,000 last week to 235,000. This marks the highest number of newly unemployed individuals since the middle of January 2022. Continuing claims, running a week behind, rose by 51,000 to 1.375 million.

US Market Closings:

• Dow advanced 346.87 points or 1.12% to 31,384.55
• S&P 500 advanced 57.54 points or 1.5% to 3,902.62
• Nasdaq advanced 259.49 points or 2.28% to 11,621.35
• Russell 2000 advanced 42.06 points or 2.43% to 1,769.6

Canada Market Closings:

• TSX Composite advanced 333.51 points or 1.78% to 19,063.17
• TSX 60 advanced 16.97 points or 1,157.81

Brazil Market Closing:

• Bovespa advanced 2,010.74 points or 2.04% to 100,729.72

ENERGY:

The oil markets had a green day today:

• Crude Oil increased 4.09 USD/BBL or 4.15% to 102.620

• Brent increased 3.87 USD/BBL or 3.84% to 104.56

• Natural gas increased 0.785 USD/MMBtu or 14.25% to 6.2910

• Gasoline increased 0.1794 USD/GAL or 5.54% to 3.4160

• Heating oil increased 0.2604 USD/GAL or 7.64% to 3.6710

The above data was collected around 14:28 EST on Thursday

l Top commodity gainers: Natural Gas (14.25%), Heating Oil (7.64%), Gasoline (5.54%) and Palladium (5.65%)

l Top commodity losers: Feeder Cattle (-0.43%), Methanol (-1.33%), Orange Juice (-5.72%) and Bitumen (-3.69%)

The above data was collected around 14:39 EST on Thursday.

BONDS:

Japan 0.244%(-0.1bp), US 2’s 3.04% (+0.080%), US 10’s 3.0019% (+9.09bps); US 30’s 3.19% (+0.075%), Bunds 1.303% (+14.5bp), France 1.8480% (+8.5bp), Italy 3.377% (+13.5bp), Turkey 18.15% (-2bp), Greece 3.546% (+30.6bp), Portugal 2.432% (+14.3bp); Spain 2.408% (+13.2bp) and UK Gilts 2.1280% (+3.7bp).

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