Market Talk – January 19, 2023

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ASIA:

 

China’s annual consumer inflation rate accelerated in December, driven by rising food prices even as domestic demand wavered amid restrained economic activity. The consumer price index (CPI) in December was 1.8% higher than a year earlier, rising faster than the 1.6% annual gain seen in November, data from the National Bureau of Statistics (NBS) showed on Thursday. The result matched a Reuters poll estimate of 1.8%. Food prices were 4.8% higher in December than a year earlier, after an annual rise of 3.7% seen in November. Core inflation, which excludes food and energy prices, is still subdued, although it did edge up from an annual rate of 0.6% in November to 0.7% last month. That reflected the early effects of reopening being felt in the healthcare and travel sectors, where inflation ticked up.

 

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 385.89 points or -1.44% to 26,405.23
  • Shanghai increased 15.87 points or 0.49% to 3,240.28
  • Hang Seng decreased 27.02 points or -0.12% to 21,650.98
  • ASX 200 increased 41.90 points or 0.57% to 7,435.30
  • Kospi increased 12.02 points or 0.51% to 2,380.34
  • SENSEX decreased 187.31 points or -0.31% to 60,858.43
  • Nifty50 decreased 57.50 points or -0.32% to 18,107.85

 

 

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00461 or -0.66% to 0.68949
  • NZDUSD decreased 0.00577 or -0.90% to 0.63833
  • USDJPY decreased 0.268 or -0.21% to 128.612
  • USDCNY increased 0.01566 or 0.23% to 6.78386

 

Precious Metals:

  • Gold increased 15.71 USD/t oz. or 0.83% to 1,919.47
  • Silver increased 0.204 USD/t. oz or 0.87% to 23.630

 

 

Some economic news from last night:

Japan:

Adjusted Trade Balance increased from -1.78T to -1.72T

Exports (YoY) (Dec) decreased from 20.0% to 11.5%

Trade Balance (Dec) increased from -2,027.4B to -1,448.5B

Australia:

Employment Change (Dec) decreased from 58.2K to -14.6K

Full Employment Change (Dec) decreased from 33.2K to 17.6K

Unemployment Rate (Dec) remain the same at 3.5%

 

Some economic news from today:

Hong Kong:

Unemployment Rate (Dec) decreased from 3.7% to 3.5%

Indonesia:

Interest Rate Decision increased from 5.50% to 5.75%

 

 

EUROPE/EMEA:

 

The European Central Bank pushed back on Thursday against market bets that it would slow the pace of its interest rate hikes given recent falls in inflation and easing pressure to keep up with policy moves by other central banks. Markets had been expecting the ECB’s 2% deposit rate to reach around 3.2% by the summer, a big downgrade from levels around 3.5% priced in at the turn of the year. Traders had recently trimmed their expectations for how much the ECB would raise borrowing costs, comforted by data showing lower inflation in both the euro zone and the United States and related talk of smaller hikes by the U.S. Federal Reserve.

 

The major Europe stock markets had a negative day:

  • CAC 40 decreased 131.52 points or -1.86% to 6,951.87
  • FTSE 100 decreased 83.41 points or -1.07% to 7,747.29
  • DAX 30 decreased 261.44 points or -1.72% to 14,920.36

 

The major Europe currency markets had a green day today:

  • EURUSD increased 0.00281 or 0.26% to 1.08201
  • GBPUSD increased 0.00288 or 0.23% to 1.23748
  • USDCHF increased 0.00043 or 0.05% to 0.91643

 

 

Some economic news from Europe today:

Swiss:

PPI (MoM) (Dec) decreased from -0.5% to -0.7%

 

US/AMERICAS:

The US Labor Department reported a downtick in unemployment for the week ending on January 14. Initial claims fell by 15,000 from the week prior to 190,000. Analysts has anticipated a reading closer to 214,000. However, mass layoffs are occurring in both the technology and banking sectors. The Federal Reserve is actively seeking signs that indicate conditions are easing.

The Bank of Canada believes businesses will experience a decline in sales this year as consumers grapple with an increased cost of living.  The central bank noted in a recent report that two-thirds of businesses expect a recession to occur, but around 50% said they were still seeking employees to fill vacant roles. Around two in five businesses also anticipate inflation failing to reach to bank’s 2% target until at least 2026. Consumers are also pessimistic, with 72% seeing a looming recession.

US Market Closings:

  • Dow declined 252.46 points or -0.76% to 33,044.5
  • S&P 500 declined 29.94 points or -0.76% to 3,989.92
  • Nasdaq declined 104.74 points or -0.96% to 10,852.27
  • Russell 2000 declined 18.02 points or -0.97% to 1,836.35

 

Canada Market Closings:

  • TSX Composite declined 34.79 points or -0.17% to 20,341.44
  • TSX 60 declined 1.71 points or -0.14% to 1,225.79

 

Brazil Market Closing:

  • Bovespa advanced 693.49 points or 0.62% to 112,921.88

 

 

ENERGY:

 

The oil markets had a mixed day today:

 

  • Crude Oil increased 0.934 USD/BBL or 1.18% to 80.414
  • Brent increased 1.158 USD/BBL or 1.36% to 86.138
  • Natural gas decreased 0.032 USD/MMBtu or -0.97% to 3.2790
  • Gasoline increased 0.0713 USD/GAL or 2.83% to 2.5948
  • Heating oil increased 0.0782 USD/GAL or 2.40% to 3.3412

 

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

 

  • Top commodity gainers: Gasoline (2.83%), Heating Oil (2.40%), Lumber (2.30%) and Palladium (1.73%)
  • Top commodity losers: Canola (-1.39%), Cotton (-1.49%), Oat (-1.74%) and Cocoa (-2.14%)

 

The above data was collected around 13:37 EST Thursday.

 

BONDS:

 

Japan 0.404% (-1.5bp), US 2’s 4.12% (+0.048%), US 10’s 3.4024% (+2.74bps); US 30’s 3.57% (+0.031%), Bunds 2.066% (+5.8bp), France 2.49% (+4bp), Italy 3.786% (+3bp), Turkey 9.89% (+2bp), Greece 4.024% (+3.1bp), Portugal 2.924% (+4.3bp); Spain 3.02% (+5.9bp) and UK Gilts 3.322% (+0.7bp).