Market Talk – June 25, 2021

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ASIA:

Russia and China have presented a plan to build the joint International Lunar Research Station (ILRS). The proposed lunar base is intended to be ready for crewed visits by 2036 and is unrelated to the American-led Artemis program, which has pledged to land “the first woman and person of color” on the moon by 2024, although that date seems increasingly unlikely. The development of ILRS is split into three phases.

India’s airline fleet is expected to contract by 15 to 20 aircraft to less than 700 in the current fiscal year through March 2022, as carriers retire more planes than they induct due to weak passenger demand, consultant CAPA said. Airlines will also be forced to ground 250-300 planes in the first half of the current fiscal year, CAPA estimates, as a surge in COVID-19 infections in the South Asian nation earlier this year roils air travel. Indian carriers are expected to lose $4.1 billion in the current fiscal year on top of a similar loss last year, CAPA estimates, putting renewed pressure on them to raise cash or face the risk of having to downsize, consolidate or have their planes repossessed by lessors

The major Asian stock markets had a green day today:

  • NIKKEI 225 increased 190.95 points or 0.66% to 29,066.18
  • Shanghai increased 40.91 points or 1.15% to 3,607.56
  • Hang Seng increased 405.76 points or 1.40% to 29,288.22
  • ASX 200 increased 32.70 points or 0.45% to 7,308.00
  • Kospi increased 16.74 points or 0.51% to 3,302.84
  • SENSEX increased 226.04 points or 0.43% to 52,925.04
  • Nifty50 increased 69.90 points or 0.44% to 15,860.35

 

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00076 or 0.10% to 0.75896
  • NZDUSD increased 0.00006 or 0.01% to 0.70638
  • USDJPY decreased 0.0820 or -0.07% to 110.80
  • USDCNY decreased 0.00939 or -0.15% to 6.46129

 

Precious Metals:

Gold increased 2.93 USD/t oz. or 0.16% to 1,778.11

Silver increased 0.099 USD/t. oz or 0.38%% to 26.032

 

Some economic news from last night:

Japan:

Tokyo Core CPI (YoY) (Jun) increased from -0.2% to 0.0%

Tokyo CPI (YoY) (Jun) increased from -0.4% to 0.0%

CPI Tokyo Ex Food and Energy (MoM) (Jun) increased from -0.4% to -0.1%

New Zealand:

Exports (May) increased from 5.40B to 5.87B

Imports (May) increased from 4.99B to 5.40B

Trade Balance (YoY) (May) decreased from 760M to -60M

Trade Balance (MoM) (May) increased from 414M to 469M

South Korea:

Manufacturing BSI Index (Jul) increased from 98 to 101

 

Some economic news from today:

India:

FX Reserves, USD decreased from 608.08 to 603.93B

Singapore:

Industrial Production (YoY) (May) increased from 2.3% to 30.0%

Industrial Production (MoM) (May) increased from -0.4% to 7.2

 

EUROPE/EMEA:

 

The UK government ministers are being accused of wasting the benefits of Britain’s successful vaccination drive after changes to the traffic light system failed to win the support of the travel industry. The government on Thursday announced 14 countries and territories – including Malta, Spain’s Balearic Islands and some Caribbean destinations – would be opened up for quarantine-free travel.

 

German Chancellor Angela Merkel added to the uncertainty on Thursday by calling on other European nations to impose quarantine on British travelers as a result of the spread of the Delta variant of coronavirus. Spain insisted that each EU country should make its own decisions about who to admit.

 

The major Europe stock markets had a mixed day today:

  • CAC 40 decreased 8.28 points or -0.13% to 6,622.87
  • FTSE 100 increased 26.10 points, or 0.37% to 7,136.07
  • DAX 30 increased 18.74 points or 0.12% to 15,607.97

 

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00065 or 0.05% to 1.19358
  • GBPUSD decreased 0.00411 or -0.30% to 1.38778
  • USDCHF decreased 0.0006 or -0.07% to 0.91740

 

Some economic news from Europe today:

 

Germany:

GfK German Consumer Climate (Jul) increased from -6.9 to -0.3

Spain:

Spanish PPI (YoY) increased from 12.8% to 15.3%

Italy:

Italian Business Confidence (Jun) increased from 110.9 to 114.8

Italian Consumer Confidence (Jun) increased from 110.6 to 115.1

Italian Trade Balance Non-EU (May) decreased from 4.85B to 4.77B

UK:

CBI Distributive Trades Survey (Jun) increased from 18 to 25

France:

France Jobseekers Total decreased from 3,623.8K to 3,490.1K

Euro Zone:

M3 Money Supply (YoY) (May) decreased from 9.2% to 8.4%

Loans to Non Financial Corporations (May) decreased from 3.2% to 1.9%

Private Sector Loans (YoY) increased from 3.8% to 3.9%

 

US/AMERICAS:

May’s personal consumer expenditures price index, a key inflation indicator, jumped 3.4% YoY. According to the Commerce Department, this marks the fastest price increase since 1992. The core index advanced 0.5% in May, beneath the 0.6% estimate, and the PCE index rose 0.4% for the month and 3.9% YoY. Energy experienced a notable increase of 27.4% last month.

Robinhood’s IPO debut may be delayed due to an ongoing review by the SEC. The SEC is particularly interested in the platform’s cryptocurrency regulation, which they began offering in 2018. Robinhood came under intense scrutiny this year for halting trading on a handful of “meme stocks” and misleading investors about how they fund their business. Robinhood CEO Vlad Tenev is also now urging the SEC to change trading rules to allow exchanges to quote offers and bids for under a penny in order to compete with wholesalers. The CEO also stated that they plan to hire a new department of employees to handle their cryptocurrency section. While the IPO may not be available this month as expected, it is likely to go through after the SEC finishes their investigation.

Brazil’s central bank President Roberto Campos Neto believes interest rates need to rise. “When the balance is asymmetric, it means that you have to raise interest rates above what is projected,” he stated. The news comes shortly after the central bank voted for the third consecutive time to raise rates. The bank president believes the SELIC will rise to 6.25% by the end of 2021, and rise to 6.5% by the end of 2022. The neutral real interest rate currently sits at 3%, meaning the uptick will be an extensive change.

US Market Closings:

  • Dow advanced 238.01 points or 0.7% to 34,434.83
  • S&P 500 advanced 14.3 points or 0.34% to 4,280.79
  • Nasdaq declined 9.32 points or -0.06% to 14,360.39
  • Russell 2000 advanced 0.77 of a point or 0.03% to 2,334.4

 

Canada Market Closings:

  • TSX Composite advanced 15.14 points or 0.07% to 20,230.26
  • TSX 60 advanced 1.83 points or 0.15% to 1,213.5

 

Brazil Market Closing:

  • Bovespa declined 2,267.18 points or -1.75% to 127,246.44

ENERGY:

The oil markets had a mixed day today:

 

  • Crude Oil increased 0.62 USD/BBL or 0.85% to 73.9200
  • Brent increased 0.46 USD/BBL or 0.61% to 76.0200
  • Natural gas increased 0.078 USD/MMBtu or 2.28% to 3.4960
  • Gasoline decreased 0.0223 USD/GAL or -0.98% to 2.2586
  • Heating oil decreased 0.0179 USD/GAL or -0.83% to 2.1444

 

 

Top commodity gainers: Palm Oil (2.78%), Coffee (3.22%), Bitumen (2.98%), and Natural Gas (2.28%)

Top commodity losers: Corn (-2.56%), Soybeans (-3.01%), Wheat (-2.50%), and Lumber (-7.48%)

 

The above data was collected around 15:45 EST on Friday.

 

BONDS:

Japan 0.048%(-1bp), US 2’s 0.27% (+0.002%), US 10’s 1.5292%(+3.05bps); US 30’s 2.1577%(+0.05%), Bunds -0.149% (+4bp), France 0.198% (+4.6bp), Italy 0.9240% (+5bp), Turkey 16.75% (+4bp), Greece 0.869% (+4bp), Portugal 0.465% (+5bp), Spain 0.487% (+4.94bp) and UK Gilts 0.779% (+4bp).