Market Talk – December 15, 2022

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ASIA:

 

Citigroup Inc said it will wind down its consumer banking business in China, a move which is expected to affect about 1,200 employees in the country. The exit will include products such as deposits, insurance, mortgages, investments, loans and cards, the lender said in a statement Thursday. The bank will also explore options for those employees who wish to continue to work at Citi in China or across the bank’s global network, it added. The US bank announced a plan to exit the business in April 2021 as part of a global strategy to exit consumer franchises in 14 markets in Asia, Europe, Middle East and Africa and Mexico. The lender said the cost of the exit isn’t expected to be material and it remains committed to its wealth management and institutional business in China.

India’s economy is posting the fastest growth among major economies putting it on track to become the world’s third largest before the end of the decade, according to financial forecasts. As companies record strong growth and hand out pay hikes, there is a wave of optimism among professionals. India is expected to grow by nearly 7% this year despite the economic turbulence created by Russia’s war in Ukraine. That momentum is likely to continue, helping it overtake Japan and Germany to become the world’s third-largest economy, according to a recent forecast by New York-based investment firm Morgan Stanley and S&P Global. The International Monetary Fund projects India to reach that position by 2028. The United States and China are the world’s biggest economies.

 

 

The major Asian stock markets had a negative day today:

  • NIKKEI 225 decreased 104.51 points or -0.37% to 28,051.70
  • Shanghai decreased 7.88 points or -0.25% to 3,168.65
  • Hang Seng decreased 304.86 points or -1.55% to 19,368.59
  • ASX 200 decreased 46.50 points or -0.64% to 7,204.80
  • Kospi decreased 38.28 points or -1.60% to 2,360.97
  • SENSEX decreased 878.88 points or -1.40% to 61,799.03
  • Nifty50 decreased 245.40 points or -1.32% to 18,414.90

 

 

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.01611 or -2.35% to 0.66980
  • NZDUSD decreased 0.01129 or -1.75% to 0.63411
  • USDJPY increased 2.546 or 1.88% to 137.858
  • USDCNY increased 0.0514 or 0.74% to 6.99460

 

Precious Metals:

  • Gold decreased 29.13 USD/t oz. or -1.61% to 1,778.14
  • Silver decreased 0.822 USD/t. oz or -3.44% to 23.075

 

Some economic news from last night:

China:

Fixed Asset Investment (YoY) (Nov) decreased from 5.8% to 5.3%

Industrial Production (YoY) (Nov) decreased from 5.0% to 2.2%

Chinese Industrial Production YTD (YoY) (Nov) decreased from 4.0% to 3.8%

Japan:

Adjusted Trade Balance increased from -2.21T to -1.73T

Exports (YoY) (Nov) decreased from 25.3% to 20.0%

Trade Balance (Nov) increased from -2,166.2B to -2,027.4B

Australia:

Employment Change (Nov) increased from 43.1K to 64.0K

Full Employment Change (Nov) decreased from 47.1K to 34.2K

Unemployment Rate (Nov) remain the same at 3.4%

New Zealand:

GDP (QoQ) (Q3) increased from 1.9% to 2.0%

 

Some economic news from today:

India:

M3 Money Supply increased from 8.9% to 9.1%

 

 

EUROPE/EMEA:

 

The Bank of England (BoE) has raised its key interest rate from 3% to 3.5%, the ninth rate rise in a row. The central bank’s Monetary Policy Committee (MPC) voted 6-3 in favor of the move and said that further increases in the bank rate may be required to tackle what it fears may be persistent domestic inflation pressures from prices and wages. The BoE said that most indicators of global supply chain bottlenecks have eased, but global inflationary pressures remain elevated. The BoE added that although labour demand began to ease, the labour market remained tight.

 

The major Europe stock markets had a negative day:

 

  • CAC 40 decreased 208.02 points or -3.09% to 6,522.77
  • FTSE 100 decreased 69.76 points or -0.93% to 7,426.17
  • DAX 30 decreased 473.97 points or -3.28% to 13,986.23

 

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00722 or -0.68% to 1.06022
  • GBPUSD decreased 0.02354 or -1.90% to 1.21819
  • USDCHF increased 0.00633 or 0.68% to 0.93073

 

Some economic news from Europe today:

UK:

BoE Interest Rate Decision (Dec) increased from 3.0% to 3.5%

Swiss:

SNB Interest Rate Decision (Q4) increased from 0.5% to 1.0%

France:

French CPI (MoM) (Nov) decreased from 1.0% to 0.3%

French HICP (MoM) (Nov) decreased from 0.5% to 0.4%

Euro Zone:

Deposit Facility Rate (Dec) increased from 1.5% to 2.0%

ECB Marginal Lending Facility increased from 2.25% to 2.75%

ECB Interest Rate Decision (Dec) increased from 2.00% to 2.50%

 

US/AMERICAS:

Wall Street saw red this Thursday as the markets absorbed the Fed’s rate decision from yesterday coupled with a disappointing retail sales report. Consumers spent 0.6% less in November, according to the Commerce Department, falling well beneath expectations. Yesterday, the central bank raised rates by 50 bps in a continued effort to fight inflatiion. The target range is now at the highest level in 15 years 4.25% to 4.5%). The  bank fesees future hikes into 2023, with current estimates stating rates will top out at 5.1%.

Weekly jobless claims in the US fell to a low not seen since September. According to the Department of Labor, weekly filings fell by 20,000 to 211,000. Continuing claims reached 1.671 million during the week on December 3, while the previous week’s figure was revised to 1.67 million. Jerome Powell noted yesterday that the tight labor market is of top concern for the Fed amid their ongoing battle with rising prices.

US Market Closings:

  • Dow declined 764.13 points or -2.25% to 33,202.22
  • S&P 500 declined 99.57 points or -2.49% to 3,895.75
  • Nasdaq declined 360.36 points or -3.23% to 10,810.53
  • Russell 2000 declined 45.85 points or -2.52% to 1,774.61

 

Canada Market Closings:

  • TSX Composite declined 291.02 points or -1.46% to 19,600.63
  • TSX 60 declined 17.28 points or -17.28% to 1,183.03

 

Brazil Market Closing:

  • Bovespa declined 8.08 points or -0.01% to 103,737.69

 

 

ENERGY:

 

The oil markets had a mixed day today:

 

  • Crude Oil decreased 0.749 USD/BBL or -0.97% to 76.531
  • Brent decreased 1.175 USD/BBL or -1.42% to 81.525
  • Natural gas increased 0.2354 USD/MMBtu or 3.66% to 6.6654
  • Gasoline decreased 0.05 USD/GAL or -2.23% to 2.1944
  • Heating oil decreased 0.0071 USD/GAL or -0.22% to 3.2697

The above data was collected around 12:14 EST on Thursday      

            

  • Top commodity gainers: Natural Gas (3.66%), Potatoes (2.24%), Cocoa (1.98%) and Bitumen (3.23%)
  • Top commodity losers: Palladium (-5.32%), Platinum (-2.74%), Silver (-3.44%) and Copper (-3.02%)

 

The above data was collected around 12:25 EST Thursday

 

 

BONDS:

 

Japan 0.253%(+0.2bp), US 2’s 4.24% (-0.013%), US 10’s 3.4427% (-6.03bps); US 30’s 3.47% (-0.068%), Bunds 2.09% (+15.8bp), France 2.593% (+16.9bp), Italy 4.153% (+29.5bp), Turkey 10.70% (-3bp), Greece 4.172% (+13.9bp), Portugal 3.089% (+20bp); Spain 3.163% (+19.3bp) and UK Gilts 3.248% (-6.5bp).