Market Talk – January 18, 2023

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ASIA:

 

China’s central bank continued to inject funds into the financial system through open market operations on Wednesday. The People’s Bank of China said on its website that it has conducted 133 billion yuan ($19.67 billion) of seven-day reverse repos at an interest rate of 2 percent, and 447 billion yuan of 14-day reverse repos at an interest rate of 2.15 percent. The moves are aimed at offsetting impacts from factors including the payment on issue of government bonds and cash issuance and keeping liquidity stable before the upcoming Spring Festival holiday, according to the central bank. A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

 

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 652.44 points or 2.50% to 26,791.12
  • Shanghai increased 0.16 points or 0.00% to 3,224.41
  • Hang Seng increased 100.36 points or 0.47% to 21,678.00
  • ASX 200 increased 7.10 points or 0.10% to 7,393.40
  • Kospi decreased 11.07 points or -0.47% to 2,368.32
  • SENSEX increased 390.02 points or 0.64% to 61,045.74
  • Nifty50 increased 112.05 points or 0.62% to 18,165.35

 

 

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00331 or -0.47% to 0.69539
  • NZDUSD increased 0.00062 or 0.10% to 0.64332
  • USDJPY increased 0.816 or 0.64% to 128.946
  • USDCNY decreased 0.00449 or -0.07% to 6.76421

 

Precious Metals:

  • Gold decreased 5.14 USD/t oz. or -0.27% to 1,903.25
  • Silver decreased 0.488 USD/t. oz or -2.04% to 23.431

 

Some economic news from last night:

Japan:

Industrial Production (MoM) (Nov) increased from -0.1% to 0.2%

BoJ Interest Rate Decision remain the same at -0.10%

 

No economic news from today:

 

 

EUROPE/EMEA:

 

The Bank of England has sharply criticized UK lenders for failing to tackle the risk management blind spots exposed by the collapse of a multibillion-dollar hedge fund, the energy price shock and other crises that have rocked financial markets in recent years. The rebuke, delivered in letters to bank chiefs, highlights the BoE’s growing discomfort about the exposure of traditional financial institutions to the hedge funds, pensions and other non-banking financial institutions that are expected to be ground zero for the next financial crisis.

 

The major Europe stock markets had a mixed day:

  • CAC 40 increased 6.23 points or 0.09% to 7,083.39
  • FTSE 100 decreased 20.33 points or -0.26% to 7,830.70
  • DAX 30 decreased 5.27 points or -0.03% to 15,181.80

 

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00058 or 0.05% to 1.07938
  • GBPUSD increased 0.00526 or 0.43% to 1.23406
  • USDCHF decreased 0.00598 or -0.65% to 0.91592

 

 

Some economic news from Europe today:

UK:

CPI (YoY) (Dec) decreased from 10.7% to 10.5%

CPI (MoM) (Dec) remain the same at 0.4%

Euro Zone:

CPI (YoY) (Dec) decreased from 10.1% to 9.2%

CPI (MoM) (Dec) decreased from -0.1% to -0.4%

 

US/AMERICAS:

Retail sales declined 1.1% in December. The news turned Wall Street red this Wednesday. Autos excluded, retail sales declined 1.1%, far steeper than the anticipated 0.5% drop. Retailers in the U.S. typically post impressive figures during the Q4 holiday months. Yet, departments saws saw a 6.6% decline, while general merchandisers felt a 0.8% loss. Furniture sales fell 2.5%, online sales declined by 1.1%, and autos fell 1.2%. The report is leaving analysts to believe that Q1 of 2023 will follow the trend of a decline in purchases.

Wholesale prices in the U.S. showed some signs of easing this December. Wholesale goods and services declined by 0.5% on a monthly basis, according to the Labor Department. Analysts had anticipated a decline of only 0.1%. However, energy prices can largely be attributed to the drop. Core PPI, which excludes energy and food, matched analysts’ estimates of a 0.1% decline.

US Market Closings:

  • Dow declined 613.89 points or -1.81% to 33,296.96
  • S&P 500 declined 62.11 points or -1.56% to 3,928.86
  • Nasdaq declined 138.1 points or -1.24% to 10,957.01
  • Russell 2000 declined 29.92 points or -1.59% to 1,854.36

 

Canada Market Closings:

  • TSX Composite declined 81.23 points or -0.4% to 20,376.23
  • TSX 60 declined 5.1 points or -0.41% to 1,227.5

 

Brazil Market Closing:

  • Bovespa advanced 789.27 points or 0.71% to 112,228.39

 

 

ENERGY:

 

The oil markets had a mixed day today:

 

  • Crude Oil decreased 0.555 USD/BBL or -0.69% to 79.625
  • Brent decreased 0.531 USD/BBL or -0.62% to 85.389
  • Natural gas decreased 0.26 USD/MMBtu or -7.25% to 3.3260
  • Gasoline decreased 0.0151 USD/GAL or -0.59% to 2.5300
  • Heating oil increased 0.0197 USD/GAL or 0.61% to 3.2707

 

The above data was collected around 13:23 EST on Wednesday

 

  • Top commodity gainers: Palm Oil (1.90%), Zinc (1.75%), Cotton (2.23%) and Bitumen (2.32%)
  • Top commodity losers: HRC Steel (-2.05%), Palladium (-1.98%), Silver (-2.04%) and Natural Gas (-7.25%)

 

The above data was collected around 13:30 EST Wednesday.

 

BONDS:

 

Japan 0.419% (-8.6bp), US 2’s 4.09% (-0.103%), US 10’s 3.3898% (-14.52bps); US 30’s 3.55% (-0.099%), Bunds 2.002% (-8.7bp), France 2.44% (-9.3bp), Italy 3.742% (-13.9bp), Turkey 9.87% (-8bp), Greece 3.928% (-26.2bp), Portugal 2.884% (-11.8bp); Spain 2.961% (-9.9bp) and UK Gilts 3.314% (-1.1bp).