Market Talk – June 27, 2019

ASIA / AUSTRALIA:

Tomorrow,  the G20 meeting will commence in Osaka, Japan. Chinese President Xi Jinping has met Japanese Prime Minister Shinzo Abe prior to the meeting in order to try and build a relationship going forward. Meanwhile, the U.S. and China have reportedly agreed to delay any tariffs until the two sides meet at the G20 meeting.

In other news, Japan has purportedly urged the UK to try and avoid a no-deal with the EU. Japan was one of the first countries to engage the prospects of a post-Brexit UK and Japan trade deal.

The major Asian stock markets had a mixed day today:

Shanghai increased 20.51 points or 0.69% to 2,996.79, Kospi increased 12.47 points or 0.59% to 2,134.32; ASX 200 increased 25.80 points or 0.39% to 6,666.30; NIKKEI 225 increased 251.58 points or 1.19% to 21,338.17; Hang Seng increased 399.44 points or 1.42% to 28,621.42; and SENSEX decreased 5.67 points or -0.01% to 39,586.41.

The major Asian currency markets had a mixed day today. AUDUSD increased 0.0020 or 0.28% to 0.7003; NZDUSD increased 0.0022 or 0.33% to 0.6700; USDJPY decreased 0.0280 or 0.03% to 107.7420; and USDCNY decreased 0.0136 or 0.20% to 6.8736.

Gold decreased 1 USD/t oz. or -0.07% to 1,410.16 and silver increased 0.004 USD/t. oz or 0.03% to 15.2493.

Some economic news:

New Zealand:

  • ANZ Business Confidence (Jun) decreased from -32.0 to -38.1
  • NBNZ Own Activity (Jun) decreased from 8.5% to 8.0%

Japan:

  • Foreign Bonds Buying increased from 330.5B to 445.4B
  • Foreign Investments in Japanese Stocks decreased from -94.3B to -313.4B
  • Retail Sales (YoY) (May) increased from 0.4% to 1.2%

South Korea:

  • Manufacturing BSI Index (Jul) increased from 72 to 76

EUROPE/EMEA:

UK PM Theresa May and President Putin will meet at the G20 on Saturday to seek an improved relationship between the two nations, which has been assumed tenuous in recent years – magnified by a spy was murdered in London.

Concerns over the health of German Chancellor Angela Merkel have been raised as she was seen unsteady or trembling for the second time in public recently. Some have been questioning her long-term health as potential reasons for her not taking over Europe’s top job.

Israel has blamed Russia for recent issues with the GPS signal at Ben Gurion airport in Israel. They have reportedly noticed disruptions to the GPS signal over the last few weeks.

Meanwhile, Iran’s foreign minister made a statement in retaliation to U.S. president’s tweet that a war with Iran would be over quickly. They reiterated that he would be mistaken in believing a war between two countries “will not last long.”

The major European stock markets had a mixed day today. CAC 40 decreased 7.11 points or -0.13% to 5,493.61, FTSE 100 decreased 14.06 points or -0.19% to 7,402.33, and DAX increased 25.71 points or 0.21% to 12,271.03.

The major European currency markets had a mixed day today. EURUSD increased 0.0001 or 0.01% to 1.1369, GBPUSD decreased 0.0012 or 0.10% to 1.2676, and USDCHF decreased 0.0017 or 0.18% to 0.9763.

Some economic news:

Germany:

  • German CPI (MoM) (Jun) increased from 0.2% to 0.3%
  • German CPI (YoY) (Jun) increased from 1.4% to 1.6%
  • German HICP (MoM) (Jun) decreased from 0.3% to 0.1%
  • German HICP (YoY) (Jun) remain the same at 1.3%

Spain:

  • Spanish Business Confidence decreased from -3.3 to -3.7
  • Spanish CPI (YoY) decreased from 0.8% to 0.4%
  • Spanish CPI (MoM) decreased from 0.2% to -0.1%
  • Spanish HICP (YoY) (Jun) decreased from 0.9% to 0.6%
  • Spanish HICP (MoM) decreased from 0.2% to -0.1%

Norway:

  • Core Retail Sales (MoM) (May) decreased from 1.9% to -1.3%

Italy:

  • Italian Business Confidence (Jun) decreased from 101.9 to 100.8
  • Italian Consumer Confidence (Jun) decreased from 111.6 to 109.6
  • Italian Trade Balance Non-EU (May) increased from 1.89B to 3.11B

Eurozone:

  • Business and Consumer Survey (Jun) decreased from 105.2 to 103.3
  • Business Climate (Jun) decreased from 0.30 to 0.17
  • Consumer Confidence (Jun) decreased from -6.5 to -7.2
  • Consumer Inflation Expectation (Jun) decreased from 23.2 to 21.9
  • Selling Price Expectations (Jun) decreased from 5.3 to 3.3
  • Services Sentiment (Jun) decreased from 12.1 to 11.0
  • Industrial Sentiment (Jun) decreased from -2.9 to -5.6

U.S./AMERICAS:

Today the U.S. Supreme Court blocked a request to add a question to the 2020 census report concerning U.S. citizenship. The census report is constitutionally required every ten years and asks a wide variety of personal questions from religious affiliation to fertility. In the past, the census included a question regarding citizenship but that was discontinued after 1950. President Trump is now asking for the next census, scheduled for April 2020, to be pushed back until the matter can be discussed further.

In the current digital age, numerous world leaders use social media platforms as their soap box. Social media platforms, such as Twitter, provide public figures with the ability to instantly spread their thoughts to millions of people around the world. As seen several times with President Trump, a single tweet can send the marketplace into a frenzy. This Thursday, Twitter announced a new policy where it will now place a notice over posts from world leaders that users will be required to acknowledge before reading the tweet. The notice is as follows: “The Twitter Rules about abusive behavior apply to this Tweet. However, Twitter has determined that it may be in the public’s interest for the Tweet to remain available.”

The political atmosphere is heating up before the G20 summit. Last night, Trump tweeted that he looks forward to speaking to Indian PM Modi about the recently implemented tariff hike. India was previously benefiting from a duty-free trade program under the Generalised System of Preferences (GSP) that was reserved for developing countries. However, India now hosts the world’s fifth largest economy and the U.S. revoked their duty-free privileges at the beginning of the month. India imposed higher tariffs on U.S. products, which many see as a retaliation.

On Wall Street, the Dow underperformed this Thursday after declining 10.24 points (-0.04%) to 26,526.58. The S&P 500 closed in the green for the first time this week after adding 11.14 points (+0.38%) to 2,924.92. The Nasdaq continued its positive momentum this Thursday, adding 57.79 points (+0.73%) to 7,967.76. The Russell 2000 climbed 28.77 points (+1.90%) to 1,546.55.

The Canadian markets had a mixed performance today. The TSX Composite lost 4.49 points (-0.03%) to 16,307.73, and the TSX 60 added 0.17 of a point (+0.02%) to 975.06.

Brazil’s Bovespa added 35.34 points (+0.04%) to 100,723.97.

ENERGY:

Crude gave up some returns over yesterday’s EIA report, suggesting a large draw in Crude.

The Crude traders will have their eyes fixed on the outcome of the G20 summit to see if there is any breakthrough on trade that could strengthen the global economy and boost oil demand.

The oil markets had a mixed day today. Crude Oil decreased 0.14 USD/BBL or -0.24% to 59.3393, Brent decreased 0.15 USD/BBL or -0.23% to 66.4029, Natural gas increased 0.031 USD/MMBtu or 1.35% to 2.3203, Gasoline decreased 0.0297 USD/GAL or -1.51% to 1.9406, and Heating oil decreased 0.0238 USD/GAL or -1.21% to 1.9514.

Top commodity gainers: Sugar (4.41%), Palladium (1.58%), Live Cattle (1.47%), and Natural Gas (1.40%). Top commodity losers: Oat (-3.34%), Cotton (-2.22%), Cocoa (-1.73%), and Gasoline (-1.55%)

The above data was collected around 15:00 EST on Thursday.

BONDS:

Japan -0.14%(+1bp), US 2’s 1.74% (-3bps), US 10’s 2.02%(-3bps), US 30’s 2.55%(-2bps), Bunds -0.32% (-1bp), France 0.00% (-2bp), Italy 2.13% (-1bp), Turkey 16.05% (+22bp), Greece 2.50% (+3bp), Portugal 0.49% (+1bp), Spain 0.40% (+0bp) and UK Gilts 0.82% (-1bp).

  • Italian 5-Year BTP Auction decreased from 1.81% to 1.34%
  • Italian 10-Year BTP Auction decreased from 2.60% to 2.09%
  • US 4-Week Bill Auction increased from 2.140% to 2.145%
  • US 8-Week Bill Auction increased from 2.105% to 2.120%
  • US 7-Year Note Auction decreased from 2.144% to 1.889%