Market Talk – July 13, 2021

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The Biden administration on Tuesday warned businesses with supply chain and investment ties to China’s Xinjiang province that they could face legal consequences, citing growing evidence of genocide and other human rights abuses in the country’s northwest region. A joint statement by the State Department, Treasury, Commerce, Homeland Security, Labor and the Office of the U.S. Trade Representative – states that “businesses and individuals that do not exit supply chains, ventures, and/or investments connected to Xinjiang could run a high risk of violating U.S. law.” . U.S. Customs and Border Protection has also banned some solar equipment imports from the region.

India’s retail inflation rose less than expected in June, strengthening the view that the central bank could keep policy rates at current levels to support an economy hit hard by two strong waves of COVID-19. At 6.26% year-on-year, the June reading was slightly lower than May’s six-month high of 6.30% and below a Reuters poll forecast of 6.58%. The Reserve Bank of India’s MPC will next meet to review policy on Aug. 4-6. High fuel prices and rising input costs for companies are likely to keep inflation elevated for some time, economists say.


The major Asian stock markets had a mixed day today:


  • NIKKEI 225 increased 149.22 points or 0.52% to 28,718.24
  • Shanghai increased 18.69 points or 0.53% to 3,566.52
  • Hang Seng increased 448.17 or 1.63% to 27,963.41
  • ASX 200 decreased 1.40 points or -0.02% to 7,332.10
  • Kospi increased 24.91 points or 0.77% to 3,271.38
  • SENSEX increased 397.04 points or 0.76% to 52,769.73
  • Nifty50 increased 119.75 points or 0.76% to 15,812.35


The major Asian currency markets had a mixed day today:


  • AUDUSD decreased 0.00305 or -0.41% to 0.74479
  • NZDUSD decreased 0.00408 or -0.58% to 0.69456
  • USDJPY increased 0.27 or 0.25% to 110.61
  • USDCNY increased 0.00058 or 0.01% to 6.47786


Precious Metals:


  • Gold increased 1.22 USD/t oz. or 0.07% to 1,807.10
  • Silver decreased 0.19 USD/t. oz or -0.71% to 25.990



Some economic news from last night:




Exports (YoY) (Jun) increased from 27.9% to 32.2%


Imports (YoY) (Jun) decreased from 51.1% to 36.7%


Trade Balance (USD) (Jun) increased from 45.54B to 51.53B


South Korea:


M2 Money supply (May) decreased from 10.70% to 8.80%




NAB Business Confidence (Jun) decreased from 20 to 11


NAB Business Survey (Jun) decreased from 36 to 24


New Zealand:


FPI (MoM) (Jun) increased from 0.4% to 1.4%



The European Central Bank will chart a new policy path at its next meeting to reflect its change of strategy and show it is serious about reviving inflation, ECB policymakers said on Monday. Announced last week, the ECB’s new strategy allows it to tolerate inflation higher than its 2% goal when rates are near rock bottom, such as now. ECB President Christine Lagarde, her deputy Luis de Guindos, and Portugal’s central bank governor Mario Centeno said on Monday the new strategy will be incorporated into the central bank’s policy guidance at the July 22 meeting.

France’s economic growth will be dependent upon its COVID-19 vaccination program, French Finance Minister Bruno Le Maire told Le Parisien newspaper in an interview on Saturday. Le Maire had said at the end of June that he would keep his 5% French economic growth forecast for 2021, rather than give a higher estimate such as one made by the Bank of France, because of the risks posed by the Delta variant, first detected in India.


The major Europe stock markets had a negative day:


  • CAC 40 decreased 0.78 points or -0.01% to 6,558.47
  • FTSE 100 decreased 0.70 points or -0.01% to 7,124.72
  • DAX 30 decreased 0.87 points or -0.01% to 15,789.64


The major Europe currency markets had a mixed day today:


  • EURUSD decreased 0.0076 or -0.64% to 1.17851
  • GBPUSD decreased 0.00633 or -0.46% to 1.38225
  • USDCHF increased 0.00318 or 0.35% to 0.91828


Some economic news from Europe today:




German CPI (MoM) (Jun) decreased from 0.5% to 0.4%


German CPI (YoY) (Jun) decreased from 2.5% to 2.3%


German HICP (MoM) (Jun) increased from 0.3% to 0.4%


German HICP (YoY) (Jun) decreased from 2.4% to 2.1%




PPI (YoY) (Jun) decreased from 3.2% to 2.9%


PPI (MoM) (Jun) decreased from 0.8% to 0.3%




French CPI (YoY) increased from 1.4% to 1.5%


French CPI (MoM) (Jun) decreased from 0.3% to 0.1%


French HICP (MoM) (Jun) decreased from 0.3% to 0.2%


French HICP (YoY) (Jun) increased from 1.8% to 1.9%



Inflation in the US surged to its fastest pace in 13 years, according to the Labor Department. Consumer prices spiked 5.4% in June YoY, marking the largest gain since 2008. Analysts had anticipated a 5% gain. Core CPI rose at a rate of 4.5%, marking the fastest increase since 1991 and surpassing estimates of 3.8% Federal Reserve Chairman Jerome Powell will address Congress on Wednesday and Thursday to discuss inflation concerns.

According to the US Bureau of Labor Statistics, real average hourly earnings declined 0.5% from May to June. Real average weekly earnings fell 0.9% in June, and hourly earnings fell by 0.3%. Falling wages combined with a 0.9% rise in the CPI-U indicates that the economy has yet to recover from the aftermaths of the pandemic.

US Market Closings:

  • Dow declined 107.39 points or -0.31% to 34,888.79
  • S&P 500 declined 15.42 points or -0.35% to 4,369.21
  • Nasdaq declined 55.59 points or -0.38% to 14.677.65
  • Russell 2000 declined 42.96 points or -1.88% to 2,238.86


Canada Market Closings:

  • TSX Composite advanced 37.57 points or 0.19% to 20,270.65
  • TSX 60 advanced 3.61 points or 0.3% to 1,217.9


Brazil Market Closing:

  • Bovespa advanced 573.91 points or 0.45% to 128,167.74



OPEC+ is yet to make progress closing divisions between Saudi Arabia and the United Arab Emirates that last week prevented a deal to raise oil output, making another policy meeting this week less likely, Reuters reported. A dispute between the two Gulf OPEC allies was exposed last week, scuppering for now a deal that would have boosted output from August. Oil prices, already near their highest since 2018 due to a tightening market, rose further on the lack of a deal. OPEC+ agreed last year to record oil output cuts of almost 10 million barrels per day (bpd), or about 10% of world output, as the pandemic hit demand. The curbs have been gradually relaxed and currently stand at about 5.8 million bpd.


The oil markets had a mixed day today:


  • Crude Oil increased 1.22 USD/BBL or 1.65% to 75.3200


  • Brent increased 1.34 USD/BBL or 1.78% to 76.5000


  • Natural gas decreased 0.053 USD/MMBtu or -1.41% to 3.6960


  • Gasoline increased 0.0366 USD/GAL or 1.61% to 2.3138


  • Heating oil increased 0.0348 USD/GAL or 1.62% to 2.1845


The above data was collected around 14:20 EST on Tuesday


  • Top commodity gainers: Palm Oil (2.95%), Rice (2.92%), Orange Juice (2.29%) and Corn (5.79%)


  • Top commodity losers: Oat (-5.56%), Rubber (-1.80%), Natural Gas (-1.41%), and Lumber (-12.41%)


The above data was collected around 14:25 EST on Tuesday.



Japan 0.025%(-0bp), US 2’s 0.2568%(+0.03%), US 10’s 1.4082%(+4.04bps); US 30’s 2.0349%(+0.04%), Bunds -0.2900% (+1bp), France 0.0370% (-1bp), Italy 0.7212% (-2bp), Turkey 16.81% (+1bp), Greece 0.729% (-1bp), Portugal 0.306% (-2bp); Spain 0.332% (-2bp) and UK Gilts 0.635% (-2bp).


  • US 30-Year Bond Auction decreased from 2.172% to 2.000%


  • US 52-Week Bill Auction increased from 0.070% to 0.075%


  • Italian 3-Year BTP Auction increased from -0.22% to -0.19%


  • Italian 7-Year BTP Auction decreased from 0.46% to 0.38%


  • German 2-Year Schatz Auction increased from -0.680% to -0.670%


  • Spanish 3-Month Letras Auction increased from -0.632% to -0.618%