Market Talk – August 17, 2020

ASIA:

The website of Notepad++ is banned in China as of Monday due to its release of editions named “Free Uyghur” and “Stand with Hong Kong,” the source code and text editor announced on Twitter.

Chinese firms like Xiaomi are facing delays getting approvals from India’s quality control agency for their goods, Reuters reported, as the business environment deteriorates after a clash on their Himalayan border. The Bureau of Indian Standards (BIS) has in recent weeks delayed approvals for mobile phone components and televisions, jeopardizing the plans of firms such as Xiaomi as well as Oppo, industry sources in India and China said.

India posted a trade deficit of $4.83 billion in goods in July, after reporting its first trade surplus in over 18 years in the previous month, data released by the government showed on Friday. Data released by the Ministry of Commerce and Industry shows that Merchandise imports contracted 28.40% in July to $28.47 billion from a year ago while exports fell 10.21% to $23.64 billion.

The Indian government has launched a National Digital Health Mission program, which will give Indian citizens a unique health ID, digitized health records, as well as a registry of doctors and health facilities. The initiative aims to provide efficiency, accessibility, inclusiveness, security and save time and money in meeting the healthcare needs of a country of 1.38 billion people.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 192.61 points or -0.83% to 23,096.75
  • Shanghai increased 78.70 points or 2.34% to 3,438.80
  • Hang Seng increased 164.33 points or 0.65% to 25,347.34
  • ASX 200 decreased 49.80 points or -0.81% to 6,076.40
  • Kospi closed
  • SENSEX increased 173.44 points or 0.46% to 38,050.78
  • Nifty50 increased 68.70 points or 0.61% to 11,247.10

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00383 or 0.53% to 0.72088
  • NZDUSD increased 0.00008 or 0.01% to 0.65416
  • USDJPY decreased 0.56 or -0.53% to 106.02
  • USDCNY decreased 0.00734 or -0.11% to 6.93284

Precious Metals:

Gold increased 38.03 USD/t oz. or 1.96% to 1,981.78

Silver increased 0.96 USD/t. oz or 3.65%% to 27.389

Some economic news from last night:

Japan:

GDP (YoY) (Q2) decreased from -2.2% to -27.8%

GDP (QoQ) (Q2) decreased from -0.6% to -7.8%

GDP Capital Expenditure (QoQ) (Q2) decreased from 1.7% to -1.5%

GDP External Demand (QoQ) (Q2) decreased from -0.2% to -3.0%

GDP Price Index (YoY) increased from 0.9% to 1.5%

GDP Private Consumption (QoQ) (Q2) decreased from -0.8% to -8.2%

Singapore:

Non-Oil Exports (YoY) (Jul) decreased from 13.90% to 6.00%

Non-Oil Exports (MoM) (Jul) increased from -1.40% to 1.20%

Trade Balance decreased from 4.990B to 3.300B

Some economic news from today:

Japan:

Capacity Utilization (MoM) (Jun) increased from -11.6% to 6.2%

Industrial Production (MoM) (Jun) increased from -8.9% to 1.9%

EUROPE/EMEA:

The UK released a statement and said it can still agree on a post-Brexit trade deal with the EU next month. The PM’s spokesman said UK negotiators would “continue to plug the gaps” as negotiations enter their seventh round in Brussels on Tuesday. The two sides remain divided over competition rules, fishing rights and how a deal would be enforced. This week’s talks are the last scheduled negotiating round ahead of the autumn, although both sides have previously said talks would continue in September.

The UK economy is on course for a rapid recovery from the coronavirus crisis as strong consumer spending has helped recoup nearly half the losses caused by the pandemic, Bank of England Chief Economist Andy Haldane said in an op-ed in the Daily Mail on Saturday. Businesses in the services and manufacturing sectors grew at the fastest rate in more than five years in July, according to an IHS Markit/CIPS survey released in early August.

The major Europe stock markets had a green day today:

  • CAC 40 increased 9.01 points or 0.18% to 4,971.94
  • FTSE 100 increased 37.40 points, or 0.61% to 6,127.44
  • DAX 30 increased 19.32 points or 0.15% to 12,920.66

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00265 or 0.22% to 1.18681
  • GBPUSD increased 0.00177 or 0.14% to 1.31022
  • USDCHF decreased 0.00272 or -0.30% to 0.90629

Some economic news from Europe today:

UK:

Rightmove House Price Index (MoM) remain the same at -0.2%

Norway:

Trade Balance (Jul) increased from -10.2B to -1.8B

US/AMERICAS:

Amazon is in discussions to attain a larger portion of the cloud-based market by acquiring a minority portion of US-based Rackspace Technology Inc. Rackspace is primarily owned by private equity firm Apollo Global Management Inc., who purchased the company in a $4.3 billion leveraged buyout in 2016. Amazon, who already owns the successful AWS cloud service, could stand to gain a great deal with this partnership as Rackspace also assists companies with migrating data onto the AWS platform. Rackspace shares soared 10.3% today on the news.

The Canadian Real Estate Association (CREA) reported a historic number of home sales in July. There were 62,355 home sales last month, a 30.5% increase YoY and a 26% jump from June of this year. This is the largest spike in home sales in the CREA’s four decades of collecting data. Some experts attribute the historic number of sales to delayed economic activity that would have happened earlier in the year if not for the coronavirus pandemic. The three largest retail markets in the country led last month’s impressive figures; the Greater Toronto Area saw a MoM increase of 49.5%, the Greater Vancouver experienced a 43.9% increase, and Montreal noted a 39.1% rise.

The indigenous Kayapo tribe in Brazil blocked a key grains transportation route on Monday on the BR-163 highway. The group blames the Brazilian government for the loss of a number of their members due to mismanaging the coronavirus outbreak. Additionally, the Kayapo tribe is protesting the Ferrogrão railway that the Brazilian government plans to license in 2021. “In defense of the Amazon. Without listening to the indigenous people, there will be no concession and railway. We do not accept!” a translated sign placed on the highway stated, according to Reuters.

US Market Closings:

  • Dow declined 86.11 points or -0.31% to 27,844.91
  • S&P 500 advanced 9.14 points or 0.27% to 3,381.99
  • Nasdaq advanced 110.42 points or 1% to 11,129.72
  • Russell 2000 advanced 7.59 points or 0.48% to 1,585.47

Canada Market Closing:

  • TSX Composite advanced 141.51 points or 0.86% to 16,656.12
  • TSX 60 advanced 7.82 points or 0.79% to 998.16

Brazil Market Closing:

  • Bovespa declined 1,758.04 points or -1.73% to 99,595.41

ENERGY:

The oil markets had a mixed day today:

  • Crude Oil increased 0.81 USD/BBL or 1.93% to 42.8200
  • Brent increased 0.35 USD/BBL or 0.78% to 45.2800
  • Natural gas decreased 0.012 USD/MMBtu or -0.51% to 2.3280
  • Gasoline increased 0.02 USD/GAL or 1.60% to 1.2695
  • Heating oil decreased 0.0015 USD/GAL or -0.12% to 1.2401
  • Top commodity gainers: Silver (3.65%),Wheat (3.25%),Oat (3.22%), and Palladium (4.01%)
  • Top commodity losers: Tin (-1.25%), Cocoa (-0.86%), Sugar (-0.23%), and Natural Gas (-0.51%)

The above data was collected around 15:15 EST on Monday.

BONDS:

Japan 0.05%(+1bp), US 2’s 0.15% (-0bps), US 10’s 0.67%(-4bps);US 30’s 1.41%(-3bps), Bunds -0.45% (-0bp), France -0.16% (-3bp), Italy 1.01% (-5bp), Turkey 14.35% (+9bp), Greece 1.13% (-0bp), Portugal 0.37% (-1bp), Spain 0.36% (+6bp) and UK Gilts 0.22% (-3bp).