Market Talk – June 7, 2022

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ASIA:

China is moving to spur spending that was depressed by COVID curbs in some of its biggest cities, but piecemeal measures such as vouchers, subsidies for car buyers and digital yuan payments have been modest compared with other big global economies. Policymakers have instead stuck to their preferred approach to stimulus, which focuses on businesses and infrastructure. Those measures, analysts said, will not be enough to drive a recovery in consumer spending, which accounted for more than two-thirds of first-quarter growth in China’s economy, as it rebalances away from a heavy dependence on exports and investments. That will, in turn, impede the strength of the recovery in the world’s second-largest economy, a crucial engine of global growth.

India’s gold imports in May jumped 677% from a year ago to the highest level in a year as a correction in prices just before a key festival and wedding season boosted retail jewelry purchases, Reuters reported. Higher imports by the world’s second-biggest bullion consumer could support benchmark gold prices, but the surge could increase India’s trade deficit and put pressure on the ailing rupee. India imported 101 tonnes of gold in May, compared to 13 tonnes a year earlier, as per a report published by Reuters.

 

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 28.06 points or 0.10% to 27,943.95
  • Shanghai increased 5.39 points or 0.17% to 3,241.76
  • Hang Seng decreased 122.23 points or -0.56% to 21,531.67
  • ASX 200 decreased 110.60 points or -1.53% to 7,095.70
  • Kospi decreased 44.31 points or -1.66% to 2,626.34
  • SENSEX decreased 567.98 points or -1.02% to 55,107.34
  • Nifty50 decreased 153.20 points or -0.92% to 16,416.35

 

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00241 or 0.34% to 0.72095
  • NZDUSD decreased 0.0011 or -0.17% to 0.64720
  • USDJPY increased 0.363 or 0.27% to 132.578
  • USDCNY increased 0.01886 or 0.28% to 6.67656

 

Precious Metals:

  • Gold increased 10.06 USD/t oz. or 0.55% to 1,851.06
  • Silver increased 0.075 USD/t. oz or 34% to 22.130

 

Some economic news from last night:

Japan:

Household Spending (YoY) (Apr) increased from -2.3% to -1.7%

Household Spending (MoM) (Apr) decreased from 4.1% to 1.0%

South Korea:

FX Reserves – USD (May) decreased from 449.30B to 447.71B

Australia:

AIG Services Index (May) decreased from 57.8 to 49.2

Building Approvals (MoM) decreased from 19.2% to -2.4%

Private House Approvals increased from -3.0% to 0.5%

New Zealand:

ANZ Commodity Price Index (MoM) decreased from -1.9% to -2.8%

 

Some economic news from today:

China:

FX Reserves (USD) (May) increased from 3.120T to 3.128T

Hong Kong:

Foreign Reserves (USD) (May) decreased from 465.70B to 465.00B

India:

M3 Money Supply decreased from 9.3% to 8.8%

Australia:

RBA Interest Rate Decision (Jun) increased from 0.35% to 0.85%

Singapore:

Foreign Reserves USD (MoM) (May) decreased from 365.2B to 345.3B

New Zealand:

GlobalDairyTrade Price Index increased from -2.9% to 1.5%

 

EUROPE/EMEA:

Britain will begin live testing of crypto blockchain technology for traditional market activities such as trading and settlement of stocks and bonds next year as part of a drive to become a global “crypto hub,” the finance ministry said on Tuesday. Gwyneth Nurse, the ministry’s director general for financial services, said the use of distributed ledger technology (DLT), which underpins crypto assets, is a key priority for making financial market infrastructure more innovative and efficient for users. Britain will launch a financial market infrastructure “sandbox” next year for testing DLT projects under the control of regulators.

German industrial orders fell more than expected in April, the third decline in a row, driven by weakened demand and heightened uncertainty due to the Russian invasion of Ukraine, data showed on Tuesday. Orders for industrial goods dropped by 2.7% on the month in seasonally adjusted terms after an upwardly revised decline of 4.2% in March, figures from the Federal Statistical Office showed.

 

The major Europe stock markets had a negative day:

  • CAC 40 decreased 48.43 points or -0.74% to 6,500.35
  • FTSE 100 decreased 9.29 points or -0.12% to 7,598.93
  • DAX 30 decreased 97.19 points or -0.66% to 14,556.62

 

The major Europe currency markets had a green day today:

  • EURUSD increased 0.00066 or 0.06% to 1.06952
  • GBPUSD increased 0.0059 or 0.47% to 1.25789
  • USDCHF increased 0.00164 or 0.17% to 0.97319

 

Some economic news from Europe today:

Germany:

German Factory Orders (MoM) (Apr) increased from -4.2% to -2.7%

IHS Markit Construction PMI (May) decreased from 46.0 to 45.4

Spain:

Spanish Industrial Production (YoY) (Apr) increased from 0.1% to 2.4%

UK:

Composite PMI (May) decreased from 58.2 to 53.1

Services PMI (May) decreased from 58.9 to 53.4

Euro Zone:

Sentix Investor Confidence (Jun) increased from -22.6 to -15.8

 

US/AMERICAS:

New data from the Federal Reserve indicated that the US is heading into a recession. The Atlanta Fed’s GDPNow tracking is showing annualized growth of 0.9% for Q2, revised down from 1.3% forecast one week prior. As growth was negative during Q1 at -1.5%, a second consecutive quarter of negative growth would meet some criteria for a recession. On record, there has not been a time period of consecutive months with negative growth that did not indicate a recession since 1947.

The US trade deficit declined to $87.1 billion this April, down more than $20 billion from the month prior. The Fed expects trade to decline overall GDP by 0.13 percentage points in Q2.

US Market Closings:

  • Dow advanced 264.36 points or 0.8% to 33,180.14
  • S&P 500 advanced 39.25 points or 0.95% to 4,160.68
  • Nasdaq advanced 113.86 points or 0.94% to 12,175.23
  • Russell 2000 advanced 29.68 points or 1.57% to 1,919.56

 

Canada Market Closings:

  • TSX Composite advanced 109.12 points or 0.52% to 20,928.21
  • TSX 60 advanced 5.47 points or 0.43% to 1,263.26

 

Brazil Market Closing:

  • Bovespa declined 116.15 points or -0.11% to 110,069.76

 

ENERGY:

 

The oil markets had a mixed day today:

 

  • Crude Oil increased 0.96 USD/BBL or 0.81% to 119.460
  • Brent increased 0.98 USD/BBL or 0.82% to 120.49
  • Natural gas increased 0.012 USD/MMBtu or 0.13% to 9.3340
  • Gasoline decreased 0.0867 USD/GAL or -2.07% to 4.1063
  • Heating oil decreased 0.0397 USD/GAL or -0.91% to 4.3204

The above data was collected around 11:54 EST on Tuesday

  • Top commodity gainers: Corn (2.22%), Soybeans (1.59%),  Brent (0.82%) and Bitumen (1.34%)
  • Top commodity losers: Wheat (-2.24%), Coffee (-2.80%), Sugar (-2.66%) and Coal (-2.95%)

 

The above data was collected around 11:59 EST on Tuesday.

 

 

BONDS:

 

Japan 0.248%(+0.8bp), US 2’s 2.71% (-0.020%), US 10’s 2.9754% (-6.45bps); US 30’s 3.13% (-0.061%), Bunds 1.287% (-3.5bp), France 1.8040% (-3.6bp), Italy 3.386% (-2.1bp), Turkey 22.64% (+78bp), Greece 3.821% (-6.1bp), Portugal 2.47% (-5.9bp); Spain 2.409% (-6.2bp) and UK Gilts 2.2160% (-3.2bp).