Market Talk – January 11, 2023

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ASIA:

 

A World Bank report has projected India’s economy to grow 6.9 percent in FY23, much lower than the 8.7 percent growth achieved by the country in the previous financial year. “Growth in India is projected to slow from 8.7 percent in FY2021/22 to 6.9 percent in FY2022/23, the latter revised 0.6 percentage point lower since June,” said the World Bank in its latest Global Economic Prospects Report. Elevated inflation, rising fiscal and current account deficit (CAD), a slowdown in exports and low-income growth are some of the key challenges that India needs to tackle in the upcoming financial year. The World Bank noted that India’s goods trade deficit has more than doubled since 2019, while CAD stands at a nine-year-high at 4.4 percent of the GDP.

 

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 270.44 points or 1.03% to 26,446.00
  • Shanghai decreased 7.67 points or -0.24% to 3,161.84
  • Hang Seng increased 104.59 points or 0.49% to 21,436.05
  • ASX 200 increased 64.30 points or 0.90% to 7,195.30
  • Kospi increased 8.22 points or 0.35% to 2,359.53
  • SENSEX decreased 9.98 points or -0.02% to 60,105.50
  • Nifty50 decreased 18.45 points or -0.10% to 17,895.70

 

 

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00149 or 0.22% to 0.69019
  • NZDUSD decreased 0.00184 or -0.29% to 0.63536
  • USDJPY increased 0.248 or 0.19% to 132.498
  • USDCNY decreased 0.01132 or -0.17% to 6.77268

 

Precious Metals:

  • Gold decreased 4.16 USD/t oz. or -0.22% to 1,873.11
  • Silver decreased 0.231 USD/t. oz or -0.98% to 23.377

 

Some economic news from last night:

Australia:

CPI (YoY) (Q4) increased from 6.9% to 7.3%

Retail Sales (MoM) (Nov) increased from 0.4% to 1.4%

 

Some economic news from today:

Japan:

Coincident Indicator (MoM) (Nov) increased from -1.2% to -0.5%

Leading Index (MoM) (Nov) decreased from 0.4% to -1.0%

Leading Index decreased from 98.6 to 97.6

 

 

EUROPE/EMEA:

 

Banks should brace for more regulatory scrutiny of their credit card and buy-to-let portfolios ahead of an extended period of credit stress, the Bank of England warned. Rising interest rates, inflation, and geopolitical uncertainty will challenge firms’ credit portfolios, the Prudential Regulation Authority, part of the BOE, said in a letter to bank bosses on Tuesday. The PRA will focus on how firms manage risk around unsecured personal loans, buy-to-let mortgages, leveraged lending, and commercial real estate. The regulators also said firms still needed to improve their governance after the collapse of Archegos Capital Management in 2021. The unraveling of Bill Hwang’s family office triggered losses of more than $10 billion across firms, including Credit Suisse Group AG, Nomura Holdings Inc., and Morgan Stanley.

 

The major Europe stock markets had a green day:

  • CAC 40 increased 55.05 points or 0.80% to 6,924.19
  • FTSE 100 increased 30.49 points or 0.40% to 7,724.98
  • DAX 30 increased 173.31 points or 1.17% to 14,947.91

 

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00055 or 0.05% to 1.07395
  • GBPUSD decreased 0.00409 or -0.34% to 1.21141
  • USDCHF increased 0.00789 or 0.86% to 0.93019

 

 

Some economic news from Europe today:

Spain:

Spanish Industrial Production (YoY) (Nov) decreased from 2.1% to -1.1%

Italy:

Italian Retail Sales (YoY) (Nov) increased from 1.2% to 4.4%

Italian Retail Sales (MoM) (Nov) increased from -0.3% to 0.8%

 

US/AMERICAS:

All eyes were on the new inflation data released this Wednesday. Annual inflation slowed for the sixth consecutive month this December to 6.5%, marking the lowest level since October 2021. This marks a 0.6% decline from November and can be mostly attributed to decreased energy costs after gas prices fell 12% from November to December. Core inflation is expected to decline by 5.7% YoY. Investors are hoping inflation in the US peaked at 9.1% in the June of 2022, but prices remain extremely volatile.

The World Bank issued a dismal global forecast after cutting growth to 1.7% from its previous estimate of 3%. The weakening U.S. economy was originally expected to grow by 2.4%, but that figure has drastically decreased to 0.5%. “Global growth has slowed to the extent that the global economy is perilously close to falling into recession,” the World Bank said.

US Market Closings:

  • Dow advanced 268.91 points or 0.8% to 33,973.01
  • S&P 500 advanced 50.36 points or 1.28% to 3,969.61
  • Nasdaq advanced 189.04 points or 1.76% to 10,931.67
  • Russell 2000 advanced 21.4 points or 1.17% to  1,844.05

 

Canada Market Closings:

  • TSX Composite advanced 126.19 points or 0.63% to 20,025.05
  • TSX 60 advanced 6.79 points or 0.57% to 1,204.98

 

Brazil Market Closing:

  • Bovespa advanced 1,700.37 points or 1.53% to 112,517.08

 

ENERGY:

 

The oil markets had a mixed day today:

 

  • Crude Oil increased 2.341 USD/BBL or 3.12% to 77.461
  • Brent increased 2.527 USD/BBL or 3.15% to 82.627
  • Natural gas decreased 0.091 USD/MMBtu or -2.50% to 3.5480
  • Gasoline increased 0.0967 USD/GAL or 4.15% to 2.4244
  • Heating oil increased 0.028 USD/GAL or 0.89% to 3.1637

 

The above data was collected around 12:10 EST on Wednesday

 

  • Top commodity gainers: Brent (3.15%), Gasoline (4.15%), Crude Oil (3.12%) and Copper (2.09%)
  • Top commodity losers: Natural Gas (-2.50%), Coal (-3.31%), Palm Oil (-1.83%) and Coffee (-5.27%)

 

The above data was collected around 12:15 EST Wednesday.

 

 

BONDS:

 

Japan 0.500% (-0.4bp), US 2’s 4.25% (-0.007%), US 10’s 3.5742% (-4.48bps); US 30’s 3.70% (-0.052%), Bunds 2.17% (-13.1bp), France 2.656% (-14.6bp), Italy 4.028% (-19.1bp), Turkey 9.44% (+74bp), Greece 4.153% (-22.7bp), Portugal 3.106% (-15.4bp); Spain 3.19% (-14.4bp) and UK Gilts 3.405% (-15.7bp).