Market Talk – December 1, 2020

ASIA:

India on Monday didn’t join other members of the Shanghai Cooperation Organization (SCO) in backing China’s Belt and Road Initiative (BRI), which New Delhi has consistently opposed as a key part of it passes through Pakistan-occupied Kashmir (PoK).

India’s central bank monetary policy committee is expected to leave interest rates unchanged when it meets on Friday, after data showing the economy contracting less than expected and persistently high inflation. Economists and market participants are closely watching the commentary from the RBI around liquidity. The overnight call money rate has fallen below the reverse repo rate on days on account of the excess liquidity in the banking system. Inflation has remained consistently above the upper end of RBI’s mandated 2%-6% target range every month barring March this year while core inflation has also remained sticky.

The major Asian stock markets had a green day today:

  • NIKKEI 225 increased 353.92 points or 1.34% to 26,787.54
  • Shanghai increased 60.18 points or 1.77% to 3,451.94
  • Hang Seng increased 226.19 points or 0.86% to 26,567.68
  • ASX 200 increased 70.70 points or 1.08% to 6,588.50
  • Kospi increased 42.91 points or 1.66% to 2,634.25
  • SENSEX increased 505.72 points or 1.15% to 44,655.44
  • Nifty50 increased 140.10 points or 1.08% to 13,109.05

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00073 or 0.10% to 0.73650
  • NZDUSD increased 0.00434 or 0.62% to 0.70621
  • USDJPY increased 0.03 or 0.03% to 104.34
  • USDCNY decreased 0.02706 or -0.41% to 6.55355

Precious Metals:

  • Gold increased 37.68 USD/t oz. or 2.12% to 1,814.70
  • Silver increased 1.352 USD/t. oz or 5.98% to 23.956

Some economic news from last night:

China:

Caixin Manufacturing PMI (Nov) increased from 53.6 to 54.9

Japan:

Manufacturing PMI (Nov) increased from 48.3 to 49.0

Jobs/applications ratio (Oct) increased from 1.03 to 1.04

Unemployment Rate (Oct) increased from 3.0% to 3.1%

Capital Spending (YoY) (Q3) increased from -11.3% to -10.6%

South Korea:

GDP (YoY) (Q3) increased from -2.7% to -1.1%

GDP (QoQ) (Q3) increased from -3.2% to 2.1%

Exports (YoY) (Nov) increased from -3.8% to 4.0%

Imports (YoY) (Nov) increased from -5.6% to -2.1%

Trade Balance (Nov) increased from 5.80B to 5.93B

Nikkei Manufacturing PMI (Nov) increased from 51.2 to 52.9

Australia:

AIG Manufacturing Index (Nov) decreased from 56.3 to 52.1

Manufacturing PMI increased from 54.2 to 55.8

Building Approvals (MoM) (Oct) decreased from 16.2% to 3.8%

Current Account (Q3) decreased from 16.3B to 10.0B

Net Exports Contribution (Q3) decreased from 1.0% to -1.9%

Private House Approvals (Oct) decreased from 10.8% to 3.1%

RBA Interest Rate Decision (Dec) remain the same at 0.10%

Indonesia:

Nikkei Manufacturing PMI (Nov) increased from 47.8 to 50.6

Inflation (MoM) (Nov) increased from 0.07% to 0.28%

Inflation (YoY) (Nov) increased from 1.44% to 1.59%

Core Inflation (YoY) (Nov) decreased from 1.74% to 1.67%

Some economic news from today:

India:

Nikkei Markit Manufacturing PMI (Nov) decreased from 58.9 to 56.3

Australia:

Commodity Prices (YoY) increased from -0.4% to 2.2%

Hong Kong:

Retail Sales (YoY) (Oct) increased from -12.9% to -8.8%

Indonesia:

Motorbike Sales (YoY) (Oct) decreased from -33.20% to -46.90%

New Zealand:

GlobalDairyTrade Price Index increased from 1.8% to 4.3%

EUROPE/EMEA:

The UK’s economic recovery from the coronavirus pandemic will lag behind every other major economy apart from Argentina, according to the Organization for Economic Cooperation and Development. Warning the UK and other countries to resist cutting government spending in order to ensure a stronger rebound, the club of 37 rich nations said severe risks to growth and jobs still remained despite the prospect of a vaccine being deployed earlier than first anticipated. In its latest economic outlook report, the Paris-based organization said it expected the UK economy to contract by 11.2% this year, compared with the 10.1% fall in GDP it was forecasting in September. The OECD also sharply downgraded its forecasts for UK growth next year, to 4.2% from 7.6% three months ago.

Germany’s gross domestic product (GDP) grew by 8.5 percent in the third quarter as Europe’s largest economy showed signs of recovery from the plunge caused by the COVID-19 pandemic earlier in the year, according to its government statistics office. The revised data beat earlier forecasts, which predicted the economy would grow by 8.2 percent over the quarter. The jump could help Germany “offset a large part of the massive decline in the gross domestic product caused by the coronavirus pandemic,” according to the office.

The major European stock markets had a green day:

  • CAC 40 increased 63.09 points or 1.14% to 5,581.64
  • FTSE 100 increased 118.54 points or 1.89% to 6,384.73
  • DAX 30 increased 91.14 points or 0.69% to 13,382.30

The major European currency markets had a mixed day today:

  • EURUSD increased 0.01134 or 0.95% to 1.20487
  • GBPUSD increased 0.00893 or 0.67% to 1.34271
  • USDCHF decreased 0.00828 or -0.91% to 0.90024

Some economic news from Europe today:

Swiss:

GDP (QoQ) (Q3) increased from -7.0% to 7.2%

GDP (YoY) (Q3) increased from -7.8% to -1.6%

procure.ch PMI (Nov) increased from 52.3 to 55.2

UK:

Nationwide HPI (YoY) (Nov) increased from 5.8% to 6.5%

Nationwide HPI (MoM) (Nov) increased from 0.8% to 0.9%

Manufacturing PMI (Nov) remain the same at 55.6

Spain:

Spanish Manufacturing PMI (Nov) decreased from 52.5 to 49.8

Italy:

Italian Manufacturing PMI (Nov) decreased from 53.8 to 51.5

Italian GDP (QoQ) (Q3) increased from -12.8% to 15.9%

Italian GDP (YoY) (Q3) increased from -18.0% to -5.0%

France:

French Manufacturing PMI (Nov) increased from 49.1 to 49.6

French Car Registration (YoY) decreased from -9.5% to -27.0%

Germany:

German Manufacturing PMI (Nov) decreased from 57.9 to 57.8

German Unemployment Change (Nov) decreased from -38K to -39K

German Unemployment Rate (Nov) decreased from 6.2% to 6.1%

German Unemployment (Nov) decreased from 2.856M to 2.817M

German Unemployment n.s.a. (Nov) decreased from 2.760M to 2.699M

Norway:

Manufacturing PMI (Nov) decreased from 53.4 to 51.9

Euro Zone:

Manufacturing PMI (Nov) increased from 53.6 to 53.8

Core CPI (MoM) decreased from 0.2% to -0.3%

Core CPI (YoY) remain the same at 0.2%

CPI (MoM) decreased from 0.2% to -0.3%

CPI (YoY) (Nov) remain the same at -0.3%

CPI, n.s.a (Nov) decreased from 105.16 to 104.81

HICP ex Energy & Food (YoY) (Nov) remain the same at 0.4%

HICP ex Energy and Food (MoM) decreased from 0.1% to -0.4%

US/AMERICAS:

The Internal Revenue Service (IRS) acknowledged that they sent $34 million worth of stimulus checks to people with a foreign address. The IRS previously acknowledged that an error caused deceased Americans to receive $1,200 stimulus checks. The US Treasury stated that they are “continuing to assess the accuracy of the economic impact payments … and the recovery efforts for any erroneous payments.” In the meantime, they are hoping that those who received stimulus checks in error will voluntarily return the money.

A group of Democratic and Republican lawmakers proposed a new coronavirus stimulus package this Tuesday after a stalemate that has lasted for months. The proposed $908 billion package will not include direct stimulus checks to Americans. However, the proposal will allocate $288 billion in PPP and small business aid, $160 billion in state and local government aid, $16 billion in vaccination practices, and $82 billion in education aid, rental assistance, broadband, and child care. Update: Senate Majority Leader Mitch McConnell rejected the proposed plan.

Florida Governor Ron DeSantis announced that he will not implement new lockdown measure, mask mandates, or school closures. The governor called school closures the “biggest public health blunder in modern American history.” DeSantis also said that lockdown measures disproportionately target middle and low income works who are not in the “Zoom class” who have the luxury of working from home. Private businesses, such as Disney, may require masks to be worn in their establishment but the government will not fine or arrest people for failing to wear a mask.

President Trump’s legal team filed a lawsuit in Wisconsin today to refute Joe Biden’s win in the state. The lawsuit requests that the Wisconsin Supreme Court overturn Biden’s win until the “illegal” absentee ballots are removed from the final count.

US Market Closings:

  • Dow advanced 185.28 points or 0.63% to 29,823.92
  • S&P 500 advanced 40.82 points or 1.13% to 3,662.45
  • Nasdaq advanced 156.37 points or 1.28% to 12,355.11
  • Russell 2000 advanced 16.23 points or 0.89% to 1,836.05

Canada Market Closings:

  • TSX Composite advanced 106.68 points or 0.62% to 17,296.93
  • TSX 60 advanced 6.44 points or 0.63% to 1,029.96

Brazil Market Closing:

  • Bovespa advanced 2,547.82 points or 2.34% to 111,441.14

ENERGY:

The oil markets had a negative day today:

  • Crude Oil decreased 0.84 USD/BBL or -1.85% to 44.5000
  • Brent decreased 0.64 USD/BBL or -1.34% to 47.2900
  • Natural gas decreased 0.03 USD/MMBtu or -1.04% to 2.8520
  • Gasoline decreased 0.0359 USD/GAL or -2.87% to 1.2130
  • Heating oil decreased 0.0128 USD/GAL or -0.94% to 1.3431

The above data was collected around  13:46 EST on Tuesday

  • Top commodity gainers: Silver (5.98%), Gold (2.12%), Platinum (3.53%), and Palladium (1.80%)
  • Top commodity losers: Wheat (-2.28%), Gasoline (-2.87%), Orange Juice (-2.29%), and Coffee (-3.81%)

The above data was collected around 13:53 EST on Tuesday.

BONDS:

Japan 0.02%(-1bp), US 2’s 0.17%(+0.023%), US 10’s 0.92%(+8bps); US 30’s 1.66%(+0.088%), Bunds -0.58% (-1bp), France -0.33% (-0bp), Italy 0.66% (+7bp), Turkey 12.00% (+7bp), Greece 0.75% (+11bp), Portugal 0.10% (+6bp); Spain 0.12% (+4bp) and UK Gilts 0.35% (+5bp).

 

  • US 52-Week Bill Auction decreased from 0.135% to 0.110%