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Market Talk – August 9, 2022

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China’s export sector posted strong growth in July, providing a much-needed boost to the world’s second-largest economy, which is almost certain to miss its GDP target this year. Exports measured in US dollars jumped 18% in July from a year earlier, marking the fastest pace of growth this year, according to Chinese customs statistics released on Sunday. Analysts polled by Reuters had predicted a 15% increase. In June, exports increased by 17.9%. Imports, meanwhile, rose 2.3% from a year earlier, slightly missing expectations and suggesting domestic demand remains weak. July’s strong exports sent China’s trade surplus to a record $101 billion for the month, the first time it has surpassed the $100 billion mark. By comparison, the trade surplus in July 2021 was just $56.6 billion.

India’s central bank kept rates at record lows on Friday but raised its inflation forecast and said it would normalize liquidity conditions in a signal that policymakers may be moving closer to tapering pandemic-induced stimulus. As widely predicted, the RBI kept the repo rate, its key lending rate, at 4% and the reverse repo rate, the borrowing rate, unchanged at 3.35%. The RBI has cut the repo rate by a total of 115 basis points (bps) since March 2020 to cushion the blow from the health crisis and tough austerity measures. This comes after cutting rates by 135 basis points since the start of 2019. The consensus in the latest Reuters poll expects the RBI to raise rates twice by 25 basis points in the next fiscal year, with the repo rate reaching 4.50% by the end. March 2023.


The major Asian stock markets had a mixed day today:


  • NIKKEI 225 decreased 249.28 points or -0.88% to 27,999.96


  • Shanghai increased 10.50 points or 0.32% to 3,247.43


  • Hang Seng decreased 42.33 points or -0.21% to 20,003.44


  • ASX 200 increased 9.20 points or 0.13% to 7,029.80


  • Kospi increased 10.36 points or 0.42% to 2,503.46


  • SENSEX closed


  • Nifty50 closed


The major Asian currency markets had a mixed day today:


  • AUDUSD decreased 0.00271 or -0.39% to 0.69635


  • NZDUSD decreased 0.00056 or -0.09% to 0.62814


  • USDJPY increased 0.143 or 0.11% to 135.047


  • USDCNY decreased 0.00625 or -0.09% to 6.75555


Precious Metals:


l Gold increased 6.96 USD/t oz. or 0.39% to 1,795.48


l Silver decreased 0.142 USD/t. oz or -0.69% to 20.506


Some economic news from last night:




M2 Money Stock (YoY) increased from 3.3% to 3.4%


M3 Money Supply (Jul) increased from 2,061.7T to 2,067.1T




Westpac Consumer Sentiment (Aug) remain the same -3.0%


NAB Business Confidence (Jul) increased from 2 to 7


NAB Business Survey (Jul) increased from 13 to 20


New Zealand:


Electronic Card Retail Sales (MoM) (Jul) decreased from 0.1% to -0.2%


Electronic Card Retail Sales (YoY) (Jul) decreased from 1.9% to -0.5%


Some economic news from today:




Machine Tool Orders (YoY) decreased from 17.1% to 5.5%



Britain’s economy will plunge into recession for more than a year this autumn as rising energy prices push inflation above 13%, the Bank of England has warned. In a bleak outlook for consumers and businesses, the bank forecasts five quarters of economic contraction and a 5% drop in real living standards and has raised interest rates by 0.5 percentage point, the biggest single increase in 27 years. The bank’s baseline forecast sees GDP falling by 1.25% in 2023 and 0.25% in 2024, the first two years of annual economic decline since the 1960s. The interest rate rise will add around £650 to annual repayments for those with an average mortgage. The rise in monthly repayments for homeowners since rates started rising from a low of 0.1% last December is around £170.

Optimism among high-net-worth investors has fallen to early-pandemic levels amid continued concerns about the economic and market impact of inflation and the war in Ukraine, according to the latest quarterly Investor Sentiment survey from UBS, the world’s leading wealth manager. The survey of more than 2,800 investors and 1,100 business owners in 14 markets found that investors are focusing on their retirement savings, with some putting off big purchases. As investor optimism wanes, nearly three out of four investors are now worried about poor investment decisions in the current environment and are holding cash. In contrast, business owner optimism has rebounded after the biggest drop in two years, and most business owners plan to continue hiring and investing in their businesses over the next 12 months. Almost half of business owners expect to raise prices in the next six months due to rising material costs and concerns about wage inflation.



The major Europe stock markets had a mixed day:


l CAC 40 decreased 34.44 points or -0.53% to 6,490.00


l FTSE 100 increased 5.78 points or 0.08% to 7,488.15


l DAX 30 decreased 152.72 points or -1.12% to 13,534.97


The major Europe currency markets had a mixed day today:


  • EURUSD increased 0.00184 or 0.18% to 1.02165


  • GBPUSD decreased 0.00019 or -0.02% to 1.20822


  • USDCHF decreased 0.0011 or -0.12% to 0.95390


Some economic news from Europe today:




BRC Retail Sales Monitor (YoY) (Jul) increased from -1.3% to 1.6%




The oil markets had a mixed day today:


l Crude Oil decreased 0.592 USD/BBL or -0.65% to 90.168


l Brent decreased 0.66 USD/BBL or -0.68% to 95.990


l Natural gas increased 0.1806 USD/MMBtu or 2.38% to 7.7696


l Gasoline increased 0.0651 USD/GAL or 2.26% to 2.9513


l Heating oil increased 0.1556 USD/GAL or 4.89% to 3.3347


The above data was collected around 13:32 EST on Tuesday


l Top commodity gainers: Lumber (6.87%), Heating Oil(4.89%), Soybeans (3.81%) and Cotton (2.74%)


l Top commodity losers: Feeder Cattle (-1.05%), Rice (-0.87%), Silver (-0.69%) and Oat (-2.19%)


The above data was collected around 13:40 EST on Tuesday.



President Joe Biden is signaling his support for bringing Sweden and Finland into NATO. The US Senate approved the measure last week in a 95 to 1 vote.

President Biden officially signed a semiconductor chip manufacturing bill this Tuesday that will provide domestic manufacturers with $52 billion in funds. The Chips and Science Act received bipartisan support and is slated to boost domestic production from 10% to 2%. The White House anticipates that the measure will create 8,000 new jobs as well. Lawmakers hope that the funding will help the US gain a competitive edge over China’s hold on the industry and help with supply shortages.

US Market Closings:

  • Dow declined 58.13 points or -0.18% to 32,774.41
  • S&P 500 declined 17.59 points or -0.42% to 4,122.47
  • Nasdaq declined 150.53 points or -1.19% to 12,493.93
  • Russell 2000 declined 28.31 points or -1.46% to 1,912.89


Canada Market Closings:

  • TSX Composite declined 90.87 points or -0.46% to 19,578.3
  • TSX 60 declined 4.35 points or -0.37% to 1,181.76


Brazil Market Closing:

  • Bovespa advanced 248.78 points or 108,651.05




Japan 0.186%(+1.7bp), US 2’s 3.28% (+0.060%), US 10’s 2.7993% (+3.63bps); US 30’s 3.01% (+0.009%), Bunds 0.9250% (+2.8bp), France 1.4810% (+4.2bp), Italy 3.062% (+2.3bp), Turkey 16.19% (-9bp), Greece 3.188% (+10.5bp), Portugal 1.9800% (+4.1bp); Spain 2.066% (+6.8bp) and UK Gilts 1.9770% (+2.5bp).