Market Talk – January 23, 2023

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ASIA:

China’s decision to reopen its economy will increase inflation in Europe as they both compete for more energy, the president of the European Central Bank said Friday. China’s reopening is “something that will be a positive for China mostly, something that will be a positive for the rest of the world, but we will have inflationary pressure on many of us, simply because the level of energy that was consumed by China last year was certainly less than what they will consume this year, the amount of LNG [liquefied natural gas] that [they] will be buying from the rest of the world will be higher than what we have seen and there is not so much spare capacity in terms of oil and gas,” Lagarde said during a Davos panel Friday led by CNBC’s Geoff Cutmore.

The major Asian stock markets had a green day today:

  • NIKKEI 225 increased 352.51 points or 1.33% to 26,906.04
  • Shanghai closed
  • Hang Seng closed
  • ASX 200 increased 5.10 points or 0.07% to 7,457.30
  • Kospi closed
  • SENSEX increased 319.90 points or 0.53% to 60,941.67
  • Nifty50 increased 90.90 points or 0.50% to 18,118.55

 

 

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00569 or 0.82% to 0.70229
  • NZDUSD increased 0.00032 or 0.05% to 0.64752
  • USDJPY increased 1.109 or 0.86% to 130.679
  • USDCNY decreased 0.00212 or -0.03% to 6.77938

 

Precious Metals:

  • Gold decreased 4.81 USD/t oz. or -0.25% to 1,921.76
  • Silver decreased 0.681 USD/t. oz or -2.84% to 23.267

 

No economic news from last night and today.

 

EUROPE/EMEA:

The International Energy Agency has warned that European companies might face higher costs when looking to purchase natural gas this year as there will be more competition for the commodity. Inflation has been one of the biggest challenges for European citizens for the last year, mostly driven by higher energy bills. The ECB 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.

The major Europe stock markets had a green day:

  • CAC 40 increased 36.03 points or 0.52% to 7,032.02
  • FTSE 100 increased 14.08 points or 0.18% to 7,784.67
  • DAX 30 increased 69.39 points or 0.46% to 15,102.95

 

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00039 or 0.04% to 1.08589
  • GBPUSD decreased 0.00245 or -0.20% to 1.23685
  • USDCHF increased 0.00331 or 0.36% to 0.92371

 

 

Some economic news from Europe today:

Euro Zone:

Consumer Confidence (Jan) increased from -22.0 to -20.9

 

US/AMERICAS:

Over the weekend, US Treasury Secretary Janet Yellen declared that restructuring the Internal Revenue Service (IRS) is one of her top priorities. The Inflation Reduction Act, passed in 2022, will provide the IRS with an additional $80 billion in funding as well as 87,000 new tax agents. “That agency needs to be completely redone,” Yellen claimed as she harped on the agency’s long backlog of filings. Janet Yellen also hinted that she would likely retire once her current role commences.

 

US Market Closings:

  • Dow advanced 254.07 points or 0.76% to 33,629.56
  • S&P 500 advanced 47.2 points or 1.19% to 4,019.81
  • Nasdaq advanced 223.98 points or 2.01% to 11,364.41
  • Russell 2000 advanced 23.43 points or 1.25% to 1,890.77

 

Canada Market Closings:

  • TSX Composite advanced 128.37 points or 0.63% to 20,631.58
  • TSX 60 advanced 7.66 points or 0.62% to 1,242.87

 

Brazil Market Closing:

  • Bovespa declined 303.36 points or -0.27% to 111,737.28

 

ENERGY:

 

The oil markets had a green day today:

 

  • Crude Oil increased 0.167 USD/BBL or 0.20% to 81.807
  • Brent increased 0.593 USD/BBL or 0.68% to 88.223
  • Natural gas increased 0.1632 USD/MMBtu or 5.14% to 3.3372
  • Gasoline increased 0.0491 USD/GAL or 1.86% to 2.6945
  • Heating oil increased 0.0708 USD/GAL or 2.04% to 3.5376

 

The above data was collected around 12:36 EST on Monday

 

  • Top commodity gainers: Gasoline (1.86%), Heating Oil (2.04%), Coffee (2.68%) and Natural Gas (5.14%)
  • Top commodity losers: Corn (-1.97%), Soybeans (-1.64%), Wheat (-3.86%) and Silver (-2.84%)

 

The above data was collected around 12:41 EST Monday.

 

 

BONDS:

 

Japan 0.38% (-2bp), US 2’s 4.23% (+0.049%), US 10’s 3.5264% (+4.24bps); US 30’s 3.69% (+0.035%), Bunds 2.197% (+2.6bp), France 2.649% (+3bp), Italy 4.016% (+3.4bp), Turkey 9.94% (+2bp), Greece 4.193% (+6.4bp), Portugal 3.095% (+3.8bp); Spain 3.207% (+4.6bp) and UK Gilts 3.358% (-2.3bp).