Market Talk – November 11, 2020

ASIA:

China has proposed new regulations aimed at curbing the power of its biggest internet companies. The new rules could affect homegrown tech giants like Alibaba, Ant Group, and Tencent, as well as food delivery platform Meituan. Chinese tech shares were sharply lower after the proposed regulations were released on Tuesday.

The ongoing India-China border conflict may be resolved soon as the armies of the two countries have agreed for disengagement from parts of the Eastern Ladakh sector under which they would be moving back to their respective positions before April-May timeframe earlier this year. As per the discussions, the disengagement of tanks and armored personnel carriers was to be carried out within one day.

Dealers in India for Harley-Davidson Inc said on Tuesday they are exploring legal action against the iconic American motorcycle brand after it effectively exited the market as part of a broader restructuring plan. A number of dealers have hired leading Indian law firm AZB & Partners to review their paperwork with Harley-Davidson and suggest if there is a legal remedy, a dealer told Reuters. The U.S. company in September said it would discontinue its sales and manufacturing operations in India after a decade of struggling to gain a foothold. A month later it entered a distribution deal with India’s Hero MotoCorp, which will also develop motorcycles to be sold under the Harley-Davidson brand.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 444.01 points or 1.78% to 25,349.60
  • Shanghai decreased 17.95 points or -0.53% to 3,342.20
  • Hang Seng decreased 74.50 points or -0.28% to 26,226.98
  • ASX 200 increased 109.20 points or 1.72% to 6,449.70
  • Kospi increased 33.04 points or 1.35% to 2,485.87
  • SENSEX increased 316.02 points or 0.73% to 43,593.67
  • Nifty50 increased 118.05 points or 0.93% to 12,749.15

 

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00159 or -0.22% to 0.72667
  • NZDUSD increased 0.00435 or 0.64% to 0.68731
  • USDJPY increased 0.29 or 0.28% to 105.57
  • USDCNY increased 0.01667 or 0.25% to 6.61756

 

Precious Metals:

  • Gold decreased 13.55 USD/t oz. or -0.72% to 1,862.95
  • Silver decreased 0.017 USD/t. oz or -0.07% to 24.194

 

Some economic news from last night:

Japan:

M2 Money Stock (YoY) remain the same at 9.0%

M3 Money Supply (Oct) increased from 1,915.3T to 1,917.4T

South Korea:

Unemployment Rate (Oct) increased from 3.9% to 4.2%

Australia:

Westpac Consumer Sentiment (Nov) decreased from 11.9% to 2.5%

New Zealand:

RBNZ Interest Rate Decision remain the same at 0.25%

Indonesia:

Retail Sales (YoY) (Sep) increased from -9.2% to -8.7%

 

Some economic news from today:

China:

M2 Money Stock (YoY) (Oct) decreased from 10.9% to 10.5%

New Loans (Oct) decreased from 1,900.0B to 689.8B

Outstanding Loan Growth (YoY) (Oct) decreased from 13.0% to 12.9%

Japan:

Machine Tool Orders (YoY) increased from -15.0% to -5.9%

 

EUROPE/EMEA:

Britain and the European Union are likely to miss their mid-November deadline to clinch a post-Brexit trade because talks in London to break a deadlock are expected to run through the end of this week, Reuters reported on Wednesday. Ambassadors of the 27 EU member states in Brussels will not be updated on the talks at a regular meeting on Wednesday and the issue is now penciled in for their meeting on Nov. 18, a senior diplomat of the bloc said.

US President-elect Joe Biden on Tuesday had congratulatory calls with leaders of France, Germany, Ireland and the United Kingdom. In addition to bilateral issues, they discussed efforts to address global challenges like Covid-19 together. During the call, President-elect Biden thanked President Emmanuel Macron of France for his congratulations and expressed his desire to strengthen relations between the United States and France, its oldest ally. Biden conveyed his interest in reinvigorating bilateral and trans-Atlantic ties, including through NATO and the European Union, according to a readout of the call issued by Biden-Harris Transition.

 

The major Europe stock markets had a green day:

  • CAC 40 increased 26.24 points or 0.48% to 5,445.21
  • FTSE 100 increased 85.25 points or 1.35% to 6,382.10
  • DAX 30 increased 53.07 points or 0.40% to 13,216.18

 

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.0051 or -0.43% to 1.17663
  • GBPUSD decreased 0.00608 or -0.46% to 1.32017
  • USDCHF increased 0.00328 or 0.36% to 0.91830

 

US/AMERICAS:

Georgia announced that it will recount their election votes as requested by the Trump campaign. “With the margin being so close, it will require a full, by-hand recount in each county,” Secretary of State Brad Raffensperger stated today. “We’ll be counting every single piece of paper, every single ballot. every single lawfully cast, legal ballot,” he followed. The recount must be done by hand to ensure accuracy, and the undertaking is no small one as over five million residents cast their votes this year. Georgia has until November 20 to submit their official result. The Trump campaign is seeking a recount in Wisconsin as well.

Today the European Union announced that it foresees a less “complicated” relationship with the US under President-elect Joe Biden. “You can rest assured that we are ready to engage fast with the new administration,” EU foreign affairs chief Josep Borrell said this Wednesday. Borrell called the EU’s relationship under President Trump “bumpy,” citing disagreements on issues ranging from climate change to tariffs.

Brazil’s National Health Surveillance Agency (Anvisa) reversed their suspension of a Chinese-led coronavirus vaccine trial after originally citing “a serious adverse event.” China’s biopharmaceutical company Sinovac began phase three of the trial with a sample size of 13,000. Sao Paulo’s state-run Butantan Institute had planned to produce the “CoronaVac” and was surprised by the government’s decision on Monday to discontinue the trial. Sao Paulo state’s health secretary, Jean Gorinchteyn, said that the majority of those tested who received two doses of the vaccine produced COVID-19 antibodies to fight off the virus.

US Market Closings:

  • Dow declined 23.29 points or -0.08% to 29,397.63
  • S&P 500 advanced 27.13 points or 0.77% to 3,572.66
  • Nasdaq advanced 232.57 points or 2.01% to 11,786.43
  • Russell 2000 declined 0.07 of a point or 0% to 1,736.94

Canada Market Closings:

  • TSX Composite advanced 158.77 points or 0.96% to 16,774.14
  • TSX 60 advanced 9.87 points or 0.99% to 1,003.13

Brazil Market Closing:

  • Bovespa declined 258.13 points or -0.25% to 104,808.83

ENERGY:

The oil markets had a green day today:

  • Crude Oil increased 0.8 USD/BBL or 1.93% to 42.1600
  • Brent increased 0.78 USD/BBL or 1.79% to 44.3900
  • Natural gas increased 0.004 USD/MMBtu or 0.14% to 2.9530
  • Gasoline increased 0.0056 USD/GAL or 0.47% to 1.1996
  • Heating oil increased 0.0145 USD/GAL or 1.16% to 1.2670

The above data was collected around 12:00 EST on Wednesday

  • Top commodity gainers: Brent (1.79%), Crude Oil (1.93%), Bitumen (3.58%), and Coffee (2.19%)
  • Top commodity losers: Palladium (-5.38%), Lumber (-1.29%), Platinum (-2.35%), and Wheat (-1.44%)

The above data was collected around 12:09 EST on Wednesday.

BONDS:

Japan 0.04%(+1bp), US 2’s 0.19%(+0bps), US 10’s 0.97%(+1bps); US 30’s 1.76%(+1bps), Bunds -0.48% (+1bp), France -0.25% (-1bp), Italy 0.70% (-2bp), Turkey 12.50% (-54bp), Greece 0.85% (-1bp), Portugal 0.14% (-2bp); Spain 0.16% (-3bp) and UK Gilts 0.41% (+1bp).

  • German 30-Year Bund Auction increased from -0.160% to -0.060%
  • Italian 12-Month BOT Auction decreased from -0.436% to -0.478%