Market Talk – July 2, 2021

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We wish our US readers a Happy Fourth of July. Market Talk will resume on Tuesday, July 6.

 

ASIA:

Expansion in China’s factory sector slowed in June, as export demand weakened while supply bottlenecks held back production, official data showed Wednesday. The hints of weakness on both fronts come as economists lowered expectations for growth in the world’s second-largest economy. In recent weeks, Morgan Stanley and Barclays, among others, have downgraded their forecasts for China’s full-year gross domestic product to below 9%, citing the impact of higher raw material prices on production and weaker-than-expected consumption. On Wednesday, China’s National Bureau of Statistics said its official manufacturing purchasing managers index fell slightly to 50.9 in June, from 51.0 in May.

 

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 76.24 points or 0.27% to 28,783.28
  • Shanghai decreased 70.02 points or -1.95% to 3,518.76
  • Hang Seng decreased 517.53 or -1.80% to 28,310.42
  • ASX 200 increased 43.00 points or 0.59% to 7,308.60
  • Kospi decreased 0.28 points or -0.01% to 3,281.78
  • SENSEX increased 166.07 points or 0.32% to 52,484.67
  • Nifty50 increased 42.20 points or 0.27% to 15,722.20

 

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00305 or 0.41% to 0.74989
  • NZDUSD increased 0.00381 or 0.55% to 0.70059
  • USDJPY decreased 0.34 or -0.31% to 111.23
  • USDCNY increased 0.00444 or 0.07% to 6.47704

 

Precious Metals:

  • Gold increased 5.28 USD/t oz. or 0.30% to 1,781.88
  • Silver increased 0.335 USD/t. oz or 1.29% to 26.346

 

Some economic news from last night:

Japan:

Monetary Base (YoY) decreased from 22.4% to 19.1%

South Korea:

CPI (YoY) (Jun) decreased from 2.6% to 2.4%

CPI (MoM) (Jun) decreased from 0.1% to -0.1%

Australia:

Invest Housing Finance (MoM) increased from 2.1% to 13.3%

Home Loans (MoM) decreased from 4.3% to 1.9%

 

Some economic news from today:

India:

Bank Loan Growth increased from 5.7% to 5.8%

Deposit Growth increased from 9.7% to 10.3%

FX Reserves, USD increased from 603.93B to 609.00B

Exports (USD) (Jun) increased from 32.27B to 32.46B

Imports (USD) (Jun) increased from 38.55B to 41.86B

Trade Balance (Jun) decreased from -6.28B to -9.40B

Singapore:

Manufacturing PMI (Jun) increased from 50.7 to 50.8

 

EUROPE/EMEA:

Britain’s coronavirus-ravaged economy suffered a bigger hit than expected in the first quarter of this year, before lockdown restrictions began to ease, revised official data showed on Wednesday. Gross domestic product contracted by 1.6 percent between January and March, down from the previous figure of 1.5 percent, according to the Office for National Statistics, with households stockpiling cash while spending options were curtailed. This means GDP was 8.8 percent below its pre-pandemic levels at the start of the year, slightly higher than the initial estimate of 8.7 percent. The economy is expected to fully reopen on July 19, after the government delayed the date by four weeks due to surging Delta-plus infections. However, the high vaccination rate is helping to reduce the number of hospital admissions and deaths.

 

The major Europe stock markets had a mixed day:

  • CAC 40 decreased 0.96 points or -0.02% to 6,552.86
  • FTSE 100 decreased 1.89 points or -0.03% to 7,123.27
  • DAX 30 increased 46.28 points or 0.30% to 15,650.09

 

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.0002 or -0.02% to 1.18435
  • GBPUSD increased 0.00432 or 0.31% to 1.38035
  • USDCHF decreased 0.00308 or -0.33% to 0.92283

 

Some economic news from Europe today:

France:

French Government Budget Balance (May) decreased from -91.4B to -118.8B

Spain:

Spanish Unemployment Change decreased from -129.4K to -166.9K

Norway:

Unemployment Change (Jun) decreased from 112.51K to 103.20K

Unemployment Rate n.s.a. (Jun) decreased from 3.30% to 2.90%

Euro Zone:

PPI (YoY) (May) increased from 7.6% to 9.6%

PPI (MoM) (May) increased from 0.9% to 1.3%

US/AMERICAS:

The jobs report for June exceeded expectations, pointing to a strong workforce recovery in the US. Nonfarm payrolls advanced by 850,000, while analysts expected the figure to be only 706,000. May’s figure was optimistically revised up to reflect 583,000. Although the number of jobs added increased, unemployment figures did as well with the rate now sitting at 5.9% compared to the 5.6%. Average hourly earnings rose by 0.33% in June (3.6% YoY).

The S&P 500 saw its seventh consecutive day of gains and hit a new high shortly after the release of this morning’s jobs report. The index rose 32.4 points to finish the week at 4,352.34. Oracle Corp led the index’s rally after advancing 2.86%, followed by Paycome Software (2.74%), Hilton Worldwide Holdings (2.51%), and Carmax Inc (2.481%).

Statistics Canada reported a 0.3% decline in GDP during April, which was more optimistic than expectations of a 0.8% decrease. Preliminary data for May suggests a 0.3% decline due to continued coronavirus restrictions and lockdowns. Analysts are optimistic that consumer spending and the overall economic recovery will see a notable uptick in June as restrictions wane.

US Market Closings:

  • Dow advanced 152.82 points or 0.44% to 34,786.35
  • S&P 500 advanced 32.4 points or 0.75% to 4,352.34
  • Nasdaq advanced 116.95 points or 0.81% to 14,639.33
  • Russell 2000 declined 23.6 points or 1.01% to 2,305.76

 

Canada Market Closings:

  • TSX Composite advanced 60.53 points or 0.3% to 20,226.11
  • TSX 60 advanced 3.23 points or 0.27% to 1,212.38

 

Brazil Market Closing:

  • Bovespa advanced 1,955.46 points or 1.56% to 127,621.65

 

ENERGY:

 

The oil markets had a mixed day today:

 

  • Crude Oil decreased 0.07 USD/BBL or -0.09% to 75.1600
  • Brent increased 0.21 USD/BBL or 0.28% to 76.0500
  • Natural gas increased 0.024 USD/MMBtu or 0.66% to 3.6850
  • Gasoline increased 0.0242 USD/GAL or 1.07% to 2.2918
  • Heating oil increased 0.0179 USD/GAL or 0.83% to 2.1741

 

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

 

  • Top commodity gainers: Silver (1.29%), Sugar (1.17%), Aluminum (1.29%) and Palm Oil (2.26%)
  • Top commodity losers: Methanol (-1.46%), Corn (-4.58%), Wheat (-2.13%), and Cocoa (-1.51%)

 

The above data was collected around 13:08 EST on Friday.

 

BONDS:

 

Japan 0.043%(+0bp), US 2’s 0.24%(-0.017%), US 10’s 1.4306%(-2.89bps); US 30’s 2.0464%(-0.02%), Bunds -0.2390% (-3.9bp), France 0.0890% (-4bp), Italy 0.771% (-4bp), Turkey 16.85% (-2bp), Greece 0.8000% (-3bp), Portugal 0.364% (-2bp); Spain 0.373% (-3.37bp) and UK Gilts 0.700% (-3.1bp).