Market Talk – June 27, 2023

ASIA:

In May, Asian bonds experienced a significant increase in foreign investments, with the highest monthly inflows in nearly two years. This surge was driven by expectations of a more moderate approach to monetary tightening by the U.S. Federal Reserve. Data from regulatory authorities and bond market associations revealed that foreign investors bought a net total of $10.1 billion worth of bonds in countries such as India, Indonesia, Malaysia, South Korea, and Thailand. This marked the largest monthly purchases since June 2021. Notably, South Korean bonds attracted the most attention with net purchases of $8.2 billion, while Malaysia and Indonesia received inflows of $652 million and $500 million, respectively. Indian and Thai bonds also saw inflows of around $400 million each. Analysts highlighted that investors were optimistic due to indications that regional economies had reached their peak inflation levels. This led to expectations of interest rate cuts by central banks to stimulate economic growth.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 decreased 160.48 points or -0.49% to 32,538.33
• Shanghai increased 38.82 points or 1.23% to 3,189.44
• Hang Seng increased 354.00 points or 1.88% to 19,148.13
• ASX 200 increased 39.50 points or 0.56% to 7,118.20
• Kospi decreased 0.81 points or -0.03% to 2,581.39
• SENSEX increased 446.03 points or 0.71% to 63,416.03
• Nifty50 increased 126.20 points or 0.68% to 18,817.40

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00196 or 0.29% to 0.66896
• NZDUSD increased 0.00082 or 0.13% to 0.61732
• USDJPY increased 0.481 or 0.34% to 143.981
• USDCNY decreased 0.01794 or -0.25% to 7.22596

Precious Metals:

• Gold decreased 10.66 USD/t oz. or -0.55% to 1,912.19
• Silver increased 0.036 USD/t. oz or 0.16% to 22.806

No economic news from last night:

Some economic news from today:

Japan:

BoJ Core CPI (YoY) increased from 2.9% to 3.1%

EUROPE/EMEA:

According to sources, European Central Bank (ECB) policymakers are unlikely to pause their streak of interest rate hikes this summer, despite indications of sluggish economic growth and persistently high inflation. In conversations at the ECB’s annual forum in Sintra, Portugal, most rate-setters expressed expectations of raising borrowing costs at both the July and September meetings. The ECB recently increased interest rates to their highest level in 22 years and stated that another rate hike in July was highly likely, as it projected inflation to remain above its 2% target until the end of 2025. Some policymakers, both on and off the record, suggested that a rate hike at the ECB’s September meeting, which would raise the deposit rate to 4.0%, was more probable than not due to elevated measures of underlying price pressures.

The major Europe stock markets had a green day today:

• CAC 40 increased 31.23 points or 0.43% to 7,215.58
• FTSE 100 increased 7.88 points or 0.11% to 7,461.46
• DAX 30 increased 33.80 points or 0.21% to 15,846.86

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00571 or 0.52% to 1.09611
• GBPUSD increased 0.00379 or 0.30% to 1.27499
• USDCHF decreased 0.00253 or -0.28% to 0.89307

No economic news from Europe today:

US/AMERICAS:

US home prices rose for the third straight month in April 2023, according to the S&P CoreLogic Case-Shiller US National Home Price Index. The National Composite rose by 1.3% in March, and now stands only 3.6% below its June 2022 peak. The 10- and 20-City Composites performed similarly, with March gains of 1.6% and 1.5%, respectively. The modest increases in home prices seen in March accelerated in April 2023. The national index posted a month-over-month increase of 0.4% after seasonal adjustment, and before seasonal adjustment, the National Index posted a 1.3% month-over-month increase. The median existing-home price for all housing types was $375,700, a decline of 0.9% from March 2022. Home prices are rising on a year-over-year basis, although the amount of that price growth has been getting smaller for the past several months

US Market Closings:

• Dow advanced 212.03 points or 0.63% to 33,926.74
• S&P 500 advanced 49.59 points or 1.15% to 4,378.41
• Nasdaq advanced 219.9 points or 1.65% to 13,555.67
• Russell 2000 advanced 26.67 points or 1.46% to 1,849.93

Canada Market Closings:

• TSX Composite advanced 145.77 points or 0.74% to 19,733.09
• TSX 60 advanced 8.54 points or 0.72% to 1,189.29

Brazil Market Closing:

• Bovespa declined 720.08 points or -0.61% to 117,522.87

ENERGY:

The oil markets had a negative day today:

• Crude Oil decreased 1.203 USD/BBL or -1.73% to 68.167
• Brent decreased 1.607 USD/BBL or -2.17% to 72.573
• Natural gas decreased 0.0434 USD/MMBtu or -1.55% to 2.7476
• Gasoline decreased 0.0122 USD/GAL or -0.48% to 2.5253
• Heating oil decreased 0.0337 USD/GAL or -1.38% to 2.4051

The above data was collected around 14:10 EST on Tuesday

• Top commodity gainers: Methanol (1.41%), Aluminum (2.40%), Zinc (2.32%) and Feeder Cattle (2.22%)
• Top commodity losers: Sugar (-2.49%), Cheese (-3.34%), Wheat (-5.63%) and Rhodium (-2.75%)

The above data was collected around 14:17 EST Tuesday.

BONDS:

Japan 0.374% (+2bp), US 2’s 4.75% (+0.020%), US 10’s 3.7639% (+4.49bps); US 30’s 3.84% (+0.016%), Bunds 2.356% (+5.6bp), France 2.879% (+4.6bp), Italy 3.993% (+4.8bp), Turkey 16.34% (+13bp), Greece 3.582% (+1.3bp), Portugal 3.064% (+4.1bp); Spain 3.321% (+5bp) and UK Gilts 4.375% (+7.4bp).

The post Market Talk – June 27, 2023 first appeared on Armstrong Economics.