Market Talk – February 8, 2023

ASIA:

China continues to flex its muscles in the gold market after data from the People’s Bank of China shows that it bought more gold in January, the third straight month. China’s central bank bought 15 tonnes of gold last month; this follows 32 tonnes of gold bought in December and 30 tonnes bought in November. Analysts expect China to continue to buy gold through 2023 as it looks to add international credibility and stability to the yuan and challenge the U.S. dollar as the world’s reserve currency. Last year China started urging Middle Eastern countries to accept yuan for oil. China is the world’s largest oil importer.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 decreased 79.01 points or -0.29% to 27,606.46
• Shanghai decreased 15.99 points or -0.49% to 3,232.11
• Hang Seng decreased 15.18 points or -0.07% to 21,283.52
• ASX 200 increased 26.00 points or 0.35% to 7,530.10
• Kospi increased 31.93 points or 1.30% to 2,483.64
• SENSEX increased 377.75 points or 0.63% to 60,663.79
• Nifty50 increased 150.20 points or 0.85% to 17,871.70

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00202 or -0.29% to 0.69378
• NZDUSD decreased 0.00107 or -0.17% to 0.63123
• USDJPY increased 0.108 or 0.08% to 131.158
• USDCNY increased 0.0099 or 0.15% to 6.79250

Precious Metals:

• Gold increased 3.03 USD/t oz. or 0.16% to 1,876.84
• Silver increased 0.216 USD/t. oz or 0.97% to 22.404

Some economic news from last night:

Japan:

Adjusted Current Account (Dec) increased from 1.92T to 118.21T

Current Account n.s.a. (Dec) decreased from 1.804T to 0.033T

India:

Interest Rate Decision increased from 6.25% to 6.50%

Some economic news from today:

Japan:

Economy Watchers Current Index (Jan) decreased from 48.7 to 48.5

India:

Reverse REPO Rate remain the same at 3.35%

M3 Money Supply increased from 9.7% to 9.8%

EUROPE/EMEA:

Britons would be limited to 20,000 digital pounds ($24,000) each if the country goes ahead with a digital currency, Bank of England Deputy Governor Jon Cunliffe said on Tuesday. Britain’s government said on Monday that it and the BoE were pressing on with work on a possible digital pound that was likely to enter circulation in the second half of this decade and be held in a “wallet” provided by banks, although no final decision has been made. A limit of 10,000 pounds would mean that three quarters of people could receive their pay in digital pounds as well as holding pre-existing balances in the same account, while a 20,000 pound limit would allow almost everyone to use digital pounds for day-to-day transactions, Cunliffe said.

The major Europe stock markets had a mixed day:

• CAC 40 decreased 12.52 points or -0.18% to 7,119.83
• FTSE 100 increased 20.46 points or 0.26% to 7,885.17
• DAX 30 increased 91.17 points or 0.60% to 15,412.05

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00115 or 0.11% to 1.07345
• GBPUSD increased 0.00414 or 0.34% to 1.20834
• USDCHF decreased 0.00256 or -0.28% to 0.91934

Some economic news from Europe today:

France:

French Non-Farm Payrolls (QoQ) (Q4) decreased from 0.4% to 0.0%

US/AMERICAS:

US President Joe Biden delivered his State of the Union address in which he discussed his administration’s economic goals. However, he did not address the main issues ailing American’s cost of living. Biden called for increased taxation on billionaires and levying corporate buybacks. The president is also focused on eliminating “junk fees” such as eliminating excessive credit card late fees, airlines upcharges, and other fees deemed unnecessary. Biden also highlighted the strong labor market, which has been too tight by the central bank’s standards. Finally, the president called for capping prices on insulin, a long-discussed issue. Specifics on reducing inflation, shelter costs, or the national debt were not discussed.

US Market Closings:

• Dow declined 207.49 points or -0.61% to 33,949.2
• S&P 500 declined 46.09 points or -1.11% to 4,117.91
• Nasdaq declined 203.27 points or -1.68% to 11,910.52
• Russell 2000 declined 30.01 points or -1.52% to 1,942.6

Canada Market Closings:

• TSX Composite declined 45.46 points or -0.22% to 20,679.54
• TSX 60 declined 3.21 points or -0.26% to 1,245.66

Brazil Market Closing:

• Bovespa advanced 2,121.76 points or 1.97% to 109,951.49

ENERGY:

The oil markets had a mixed day today:

• Crude Oil increased 1.241 USD/BBL or 1.61% to 78.381
• Brent increased 1.237 USD/BBL or 1.48% to 84.927
• Natural gas decreased 0.1863 USD/MMBtu or -7.21% to 2.3977
• Gasoline decreased 0.0073 USD/GAL or -0.30% to 2.4495
• Heating oil decreased 0.0044 USD/GAL or -0.15% to 2.9000

The above data was collected around 13:26 EST on Wednesday

• Top commodity gainers: Rice (2.43%), Orange Juice (3.15%), Sugar (1.73%) and HRC Steel (5.49%)
• Top commodity losers: Natural Gas (-7.21%), Butter (-1.27%), Aluminum (-1.64%) and Lumber (-2.45%)

The above data was collected around 13:34 EST Wednesday.

BONDS:

Japan 0.491% (-0.4bp), US 2’s 4.46% (-0.015%), US 10’s 3.6472% (-2.68bps); US 30’s 3.70% (-0.002%), Bunds 2.35% (+3.9bp), France 2.808% (+1.8bp), Italy 4.209% (-0.5bp), Turkey 11.12% (-27bp), Greece 4.277% (+6.5bp), Portugal 3.243% (+6.4bp); Spain 3.381% (+2bp) and UK Gilts 3.291% (-2.9bp).

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