Market Talk – January 20, 2023

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ASIA:

 

China kept benchmark lending rates unchanged for a fifth month on Friday, as expected, but analysts say future cuts are possible as the central bank has pledged to support the COVID-ravaged economy. The one-year loan prime rate (LPR) – on which most new and outstanding loans are based – was left at 3.65%. The five-year LPR , considered a reference rate for mortgages, was held at 4.30%. China last cut both LPRs in August.

 

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 148.30 points or 0.56% to 26,553.53
  • Shanghai increased 24.53 points or 0.76% to 3,264.81
  • Hang Seng increased 393.67 points or 1.82% to 22,044.65
  • ASX 200 increased 16.90 points or 0.23% to 7,452.20
  • Kospi increased 14.92 points or 0.63% to 2,395.26
  • SENSEX decreased 236.66 points or -0.39% to 60,621.77
  • Nifty50 decreased 80.20 points or -0.44% to 18,027.65

 

 

The major Asian currency markets had a green day today:

  • AUDUSD increased 0.00498 or 0.72% to 0.69588
  • NZDUSD increased 0.00706 or 1.10% to 0.64626
  • USDJPY increased 1.331 or 1.04% to 129.751
  • USDCNY increased 0.01637 or 0.24% to 6.78647

 

Precious Metals:

  • Gold decreased 6.17 USD/t oz. or -0.32% to 1,925.22
  • Silver decreased 0.022 USD/t. oz or -0.09% to 23.806

 

Some economic news from last night:

China:

PBoC Loan Prime Rate remain the same at 3.65%

Japan:

National Core CPI (YoY) (Dec) increased from 3.7% to 4.0%

New Zealand:

Business NZ PMI (Dec) decreased from 47.4 to 47.2

 

Some economic news from today:

Hong Kong:

CPI (YoY) (Dec) increased from 1.8% to 2.0%

India:

FX Reserves, USD increased from 561.58B to 572.00B

 

 

EUROPE/EMEA:

 

The European Central Bank will not stop with one single 50 basis point hike at its next rate-setting meetings, a board member told CNBC Thursday. The European Central Bank raised rates four times throughout 2022, bringing its deposit rate to 2%. The central bank in December said it would be increasing rates further in 2023 to address sky-high inflation. December inflation came in at 9.2% in the euro zone, according to preliminary numbers. This was the second consecutive monthly drop in price rises across the euro zone. However, Knot doesn’t think all of the recent data is “encouraging.”

 

The major Europe stock markets had a green day:

  • CAC 40 increased 44.12 points or 0.63% to 6,995.99
  • FTSE 100 increased 23.30 points or 0.30% to 7,770.59
  • DAX 30 increased 113.20 points or 0.76% to 15,033.56

 

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00159 or 0.15% to 1.08429
  • GBPUSD decreased 0.00037 or -0.03% to 1.23853
  • USDCHF increased 0.00594 or 0.65% to 0.92214

 

 

Some economic news from Europe today:

UK:

Core Retail Sales (MoM) (Dec) decreased from -0.3% to -1.1%

Core Retail Sales (YoY) (Dec) decreased from -5.6% to -6.1%

Retail Sales (MoM) (Dec) decreased from -0.5% to -1.0%

Retail Sales (YoY) (Dec) decreased from -5.7% to -5.8%

Germany:

German PPI (MoM) (Dec) increased from -3.9% to -0.4%

 

US/AMERICAS:

Wall Street experienced a steady rally this Friday leading to all major rallies closing in the green. Today marks the end of three-day losing streaks for the S&P 500 and Dow. At the weekly level, the S&P 500 and Dow broke their two-week streak of positive gains after declining 0.76% and 2.8%, respectively. Meanwhile, the Nasdaq posted its third consecutive week of gains are advancing 0.5% for the week.

The U.S. National Association of Realtors reported that home sales fell 1.5% in December on a monthly basis. The seasonally adjusted annualized pace came in at 4.02 million units, marking a 34% decrease from December 2023 and the slowest pace since November 2010 during the Great Recession. Total sales across the U.S. fell 17.8% in 2022 from the year prior. This is the eleventh consecutive month of declining home sales, partly due to high mortgage rates, limited inventory, and inflated home prices. The median home price in the U.S. is now $366,9000, a 2.3% increase from 2021.

US Market Closings:

  • Dow advanced 330.93 points or 1% to 33,375.49
  • S&P 500 advanced 73.76 points or 1.89% to 3,972.61
  • Nasdaq advanced 288.17 points or 2.66% to 11,140.43
  • Russell 2000 advanced 30.99 points or 1.69% to 1,867.34

 

Canada Market Closings:

  • TSX Composite advanced 161.77 points or 0.8% to 20,503.21
  • TSX 60 advanced 9.42 points or 0.77% to 1,235.21

 

Brazil Market Closing:

  • Bovespa declined 881.24 points or -0.78% to 112,040.64

 

ENERGY:

 

The oil markets had a mixed day today:

 

  • Crude Oil increased 1.053 USD/BBL or 1.31% to 81.663
  • Brent increased 1.396 USD/BBL or 1.62% to 87.556
  • Natural gas decreased 0.0401 USD/MMBtu or -1.22% to 3.2349
  • Gasoline increased 0.0603 USD/GAL or 2.32% to 2.6571
  • Heating oil increased 0.102 USD/GAL or 3.02% to 3.4779

 

The above data was collected around 13:02 EST on Friday

 

  • Top commodity gainers: Gasoline (2.32%), Heating Oil (3.02%), Cotton (3.53%) and Lean Hogs (1.85%)
  • Top commodity losers: Canola (-1.35%), Palladium (-1.62%), Zinc (-1.46%) and Natural Gas (-1.22%)

 

The above data was collected around 13:11 EST Friday.

 

 

BONDS:

 

Japan 0.348% (-6.3bp), US 2’s 4.17% (+0.057%), US 10’s 3.4824% (+8.34bps); US 30’s 3.65% (+0.086%), Bunds 2.166% (+11.3bp), France 2.614% (+13bp), Italy 3.983% (+22.3bp), Turkey 9.92% (+3bp), Greece 4.129% (+9.7bp), Portugal 3.058% (+14.9bp); Spain 3.167% (+14.7bp) and UK Gilts 3.365% (+8.7bp).