Market Talk – January 9, 2023

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ASIA:

 

The Bank of Japan is considering revising its inflation forecasts upward, sources familiar with the central bank’s thinking said Friday, in a move that could fuel market speculation that the BOJ is set to shift away from its aggressive monetary easing. The revisions would include raising its core consumer inflation outlook for fiscal 2022 to the 3 percent level, the sources said. This compares with the October projection of a 2.9 percent rise. The BOJ would also raise forecasts for the following two years close to its 2 percent target from its earlier forecasts of 1.6 percent.

Singapore’s economy grew faster than official forecasts in 2022. Still, slower activity in the fourth quarter points to significant risks ahead for the city-state in the new year as global demand weakens and inflationary pressures weigh. Singapore’s economy grew 3.8% in 2022, preliminary data from the Ministry of Trade and Industry showed on Tuesday, beating government forecast for growth of 3.5% and down from 7.6% in 2021. Gross domestic product (GDP) expanded 2.2% in October-December on a year-on-year basis, the government data showed, almost half the 4.2% growth seen in the third quarter. Eight economists polled by Reuters had expected growth of 2.1%.

 

The major Asian stock markets had a green day today:

  • NIKKEI 225 closed
  • Shanghai increased 18.45 points or 0.58% to 3,176.08
  • Hang Seng increased 396.70 points or 1.89% to 21,388.34
  • ASX 200 increased 41.70 points or 0.59% to 7,151.30
  • Kospi increased 60.22 points or 2.63% to 2,350.19
  • SENSEX increased 846.94 points or 1.41% to 60,747.31
  • Nifty50 increased 241.75 points or 1.35% to 18,101.20

 

 

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00551 or 0.80% to 0.69301
  • NZDUSD increased 0.00364 or 0.57% to 0.63844
  • USDJPY decreased 0.247 or -0.19% to 131.823
  • USDCNY decreased 0.05204 or -0.76% to 6.77826

 

Precious Metals:

  • Gold increased 4.58 USD/t oz. or 0.25% to 1,870.29
  • Silver decreased 0.093 USD/t. oz or -0.39% to 23.720

 

Some economic news from last night:

Australia:

Building Approvals (MoM) (Nov)  decreased from -5.6% to -9.0%

 

 

 

EUROPE/EMEA:

 

The UK economy shrank by more than first thought in the three months to September, revised figures show. The economy contracted by 0.3%, compared with a previous estimate of 0.2%, as business investment performed worse than first thought, the Office for National Statistics (ONS) said. The UK is forecast to fall into recession in the final three months of the year as soaring prices hit growth. The ONS said that gross domestic product (GDP) – the measure of the size of the economy was now estimated to be 0.8% below where it was before the pandemic struck, downwardly revised from the previous estimate of 0.4% below.

The Swiss National Bank on Monday reported a loss of 132 billion Swiss francs ($143 billion) for the 2022 financial year, citing preliminary figures. It represents the biggest loss in the central bank’s 116-year history and equates to roughly 18% of Switzerland’s projected gross domestic product of 744.5 billion Swiss francs. Its previous record loss was 23 billion francs in 2015. As a result, it will not make its usual payouts to the Swiss government and member states, it said, with payments to its shareholders also set to be affected. In 2021, the bank reported a 26-billion-franc profit. In December, the Swiss National Bank raised interest rates for the third time in 2022, to 1%. That was to counter inflation of 3% — well below the euro zone’s inflation rate, which remains above 10%.

 

The major Europe stock markets had a green day:

  • CAC 40 increased 46.41 points or 0.68% to 6,907.36
  • FTSE 100 increased 25.45 points or 0.33% to 7,724.94
  • DAX 30 increased 182.81 points or 1.25% to 14,792.83

 

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.01025 or 0.96% to 1.07465
  • GBPUSD increased 0.01022 or 0.85% to 1.21942
  • USDCHF decreased 0.00714 or -0.77% to 0.92016

 

 

Some economic news from Europe today:

Germany:

German Industrial Production (MoM) (Nov) increased from -0.4% to 0.2%

Swiss:

Unemployment Rate n.s.a. (Dec) increased from 2.0% to 2.1%

Unemployment Rate s.a. (Dec) decreased from 2.0% to 1.9%

UK:

Mortgage Rate (GBP) (Dec) increased from 5.88% to 6.41%

Euro Zone:

Unemployment Rate (Nov) remain the same at 6.5%

 

US/AMERICAS:

Goldman Sachs has a mass layoff of 3,200 employees scheduled for this week, citing economic uncertainties as the reason for the layoff. Over a third of job losses will come from the banking and trading units. The bank’s investment banking revenue has fallen 57% YoY, with revenue declining 12% during Q3 of 2022. Other banks, such as Morgan Stanley, have hinted at mass layoffs in their future as the world economy turns down.

Employment in Canada advanced by 104,000 (0.5%) in December, bringing the unemployment rate down to 5%. Hourly wages rose for the seventh consecutive month by 5.1% compared to December 2021. Full-time hiring rose for the third straight month by 85,000 positions (0.5%). New data on Canada’s gig economy revealed that men (73%) and new immigrants (55%) between 16 and 69 represent the majority of the laborers. The private sector experienced the most significant increase since February 2022 after rising by 112,000.

US Market Closings:

  • Dow declined 112.96 points or -0.34% to 33,517.65
  • S&P 500 declined 2.99 points or -0.08% to 3,892.09
  • Nasdaq advanced 66.36 points or 0.63% to 10,635.65
  • Russell 2000 advanced 3.11 points or 0.17% to 1,795.91

 

Canada Market Closings:

  • TSX Composite advanced 42.56 points or 0.21% to 19,857.07
  • TSX 60 advanced 2.13% or 0.18% to 1,197.47

 

Brazil Market Closing:

  • Bovespa advanced 165.87 points or 0.15% to 109,129.57

 

ENERGY:

 

The oil markets had a green day today:

 

  • Crude Oil increased 1.277 USD/BBL or 1.73% to 75.047
  • Brent increased 1.119 USD/BBL or 1.42% to 79.689
  • Natural gas increased 0.3679 USD/MMBtu or 9.92% to 4.0779
  • Gasoline increased 0.0683 USD/GAL or 3.04% to 2.3129
  • Heating oil increased 0.023 USD/GAL or 0.77% to 3.0275

 

The above data was collected around 13:22 EST on Monday

 

  • Top commodity gainers: Natural Gas (9.92%), Gasoline (3.04%), Cocoa (2.99%) and Zinc (4.76%)
  • Top commodity losers: Bitumen (-1.24%), Palladium (-1.97%), Coal (-1.25%) and Methanol (-2.71%)

 

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

 

 

BONDS:

 

Japan 0.500% (+7.8bp), US 2’s 4.22% (-0.044%), US 10’s 3.5229% (-4.81bps); US 30’s 3.66% (-0.035%), Bunds 2.237% (+2.8bp), France 2.73% (+0.7bp), Italy 4.178% (-4.8bp), Turkey 8.56% (+7bp), Greece 4.451% (+10.4bp), Portugal 3.211% (-1.4bp); Spain 3.266% (-0.7bp) and UK Gilts 3.528% (+5.3bp).