Market Talk – November 13, 2020

ASIA:

China has extended congratulations to the US president-elect, Joe Biden, becoming one of the last countries to acknowledge his electoral victory over Donald Trump. On Friday, nearly a week after Biden was declared the winner, foreign ministry spokesman Wang Wenbin commended the Democratic candidate and his running mate, Kamala Harris.

Indian states are expected to cut their total capital spending by USD 33.61 billion to USD 36.3 billion due to the strain the coronavirus pandemic has put on their revenue, Indian rating agency ICRA said. It said states’ debt levels were also expected to deteriorate sharply to 28.9% of gross state domestic product in the fiscal year to March 2021 compared with 21.9% in 2018/19 and an estimated 22.3% in 2019/20. The sample of states surveyed include 12 of the biggest, whose combined gross state domestic product was equivalent to three-quarters of national GDP in 2018/19, ICRA said.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 135.01 points or -0.53% to 25,385.87
  • Shanghai decreased 28.57 points or -0.86% to 3,310.10
  • Hang Seng decreased 12.52 points or -0.05% to 26,156.86
  • ASX 200 decreased 13.00 points or -0.20% to 6,405.20
  • Kospi increased 18.25 points or 0.74% to 2,493.87
  • SENSEX increased 85.81 points or 0.20% to 43,443.00
  • Nifty50 increased 29.15 points or 0.23% to 12,719.95

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.0024 or 0.33% to 0.72627
  • NZDUSD increased 0.00019 or 0.03% to 0.68397
  • USDJPY decreased 0.52 or -0.49% to 104.59
  • USDCNY decreased 0.00451 or -0.07% to 6.60910

 

Precious Metals:

  • Gold increased 16.19 USD/t oz. or 0.86% to 1,891.95
  • Silver increased 0.485 USD/t. oz or 2.00% to 24.715

 

Some economic news from last night:

China:

China Thomson Reuters IPSOS PCSI (Nov) decreased from 78.79 to 70.97

Japan:

Thomson Reuters IPSOS PCSI (Nov) decreased from 39.54 to 38.98

South Korea:

M2 Money supply (Sep) increased from 7.60% to 8.30%

New Zealand:

Business NZ PMI (Oct) decreased from 54.0 to 51.7

FPI (MoM) (Oct) increased from -1.0% to -0.7%

 

Some economic news from today:

Hong Kong:

GDP (QoQ) (Q3) decreased from 3.0% to 2.8%

GDP (YoY) (Q3) decreased from -3.4% to -3.5%

India:

FX Reserves, USD increased from 560.72B to 568.49B

Exports (USD) (Oct) decreased from 27.58B to 24.98B

Imports (USD) (Oct) increased from 30.31B to 33.61B

Trade Balance (Oct) decreased from -2.72B to -8.71B

 

EUROPE/EMEA:

The U.K. economy grew by 15.5% in the third quarter, according to preliminary figures published Thursday, as it begins to rebound from a sharp downturn. Economists polled by Reuters had expected a 15.8% quarter-on-quarter expansion in GDP (gross domestic product) in the three months to September. It comes after an unprecedented 19.8% plunge in the previous quarter as nationwide lockdown measures crippled activity. The third-quarter bounce marks the U.K.’s sharpest quarterly expansion since records began in 1955, but GDP is still 9.7% below where it was at the end of 2019, the Office for National Statistics said Thursday. Compared with the third quarter of last year, GDP fell by 9.6%.

Britain’s transport minister said he would be making an announcement on changes to the country’s 14-day quarantine rule for travelers into the country “very soon”, giving hope to airlines desperate for travel to restart. He had previously said the government was considering shortening quarantine for those who could show a negative coronavirus test result.

The major European stock markets had a mixed day:

  • CAC 40 increased 17.59 points or 0.33% to 5,380.16
  • FTSE 100 decreased 22.55 points or -0.36% to 6,316.39
  • DAX 30 increased 23.77 points or 0.18% to 13,076.72

The major European currency markets had a mixed day today:

  • EURUSD increased 0.00225 or 0.19% to 1.18277
  • GBPUSD increased 0.00595 or 0.45% to 1.31820
  • USDCHF decreased 0.00181 or -0.20% to 0.91309

Some economic news from Europe today:

Germany:

German WPI (YoY) (Oct) decreased from -1.8% to -1.9%

German WPI (MoM) (Oct) decreased from 0.0% to -0.2%

 

Swiss:

PPI (MoM) (Oct) decreased from 0.1% to 0.0%

PPI (YoY) (Oct) increased from -3.1% to -2.9%

France:

French CPI (MoM) (Oct) increased from -0.5% to 0.0%

French CPI (YoY) remain the same at 0.0%

French HICP (MoM) (Oct) increased from -0.6% to 0.0%

French HICP (YoY) (Oct) increased from 0.0% to 0.1%

Spain:

Spanish CPI (YoY) (Oct) decreased from -0.4% to -0.8%

Spanish CPI (MoM) (Oct) increased from 0.2% to 0.5%

Spanish HICP (YoY) (Oct) decreased from -0.6% to -0.9%

Spanish HICP (MoM) (Oct) decreased from 0.4% to 0.3%

Euro Zone:

Employment Change (QoQ) increased from -2.9% to 0.9%

Employment Change (YoY) increased from -3.1% to -2.0%

Employment Overall (Q3) increased from 155,892.7K to 157,346.0K

GDP (YoY) (Q3) increased from -14.8% to -4.4%

GDP (QoQ) (Q3) increased from -11.8% to 12.6%

Trade Balance (Sep) increased from 13.9B to 24.8B

US/AMERICAS:

Boeing’s 737 MAX may be ready for flight after being prohibited from flying in March 2019 following two plane crashes that claimed the lives of 346 people. The US Federal Aviation Administration (FAA) said that the ongoing inspection of the aircraft could be complete within days. However, airlines are concerned that passengers will not want to board the 737 MAX. American Airlines announced that they will clearly identify which flights will implement the 737 MAX. “The aircraft type will be visible through the booking path, and if schedules change, there will be notification,” stated American Airlines spokesperson Curtis Blessing. Southwest, which had one of the largest 737 MAX fleets, said it is not ready to use that model yet. United Airlines stated that they will allow passengers to rebook flights if they do not feel safe flying on that model.

The seven-day average of coronavirus cases surpassed 131,400 on Thursday (32% increase from the week prior), causing companies to implement additional precautions. McDonald’s announced that it will begin to conduct COVID-19 safety checks at its franchise locations over the next six weeks. “After all, McDonald’s success – just like the success of Walmart, Apple, Starbucks, or any other U.S.-based business – depends on all of us getting back to some version of normal as quickly as possible,” McDonald’s US Chief Field Officer Charlie Strong, National Franchisee Leadership Alliance Chair Mark Salebra and franchisee Tracy Johnstone wrote in a collective letter.

Brazil’s economy grew for the fifth consecutive month in September, according to the central bank’s IBC-Br index. They anticipate the cumulative Q3 increase to reach 9.5%, which is still 2.5% below February’s pre-pandemic level. Economy Minister Paulo Guedes believes the economy will fall by -4.7% in 2020, but will recover in a “V-shaped” formation more rapidly than other nations due to government and central banking policies.

US Market Closings:

  • Dow advanced 399.64 points or 1.37% to 29,479.81
  • S&P 500 advanced 48.14 points or 1.36% to 3,585.15
  • Nasdaq advanced 119.7 points or 1.02% to 11,829.29
  • Russell 2000 advanced 35.57 points or 2.08% to 1,744.04

Canada Market Closing:

  • TSX Composite advanced 93.46 points or 0.56% to 16,675.64
  • TSX 60 advanced 4.3 points or 0.43% to 994.82

Brazil Market Closing:

  • Bovespa advanced 2,215.99 points or 2.16% to 104,723

ENERGY:

The oil markets had a mixed day today:

 

  • Crude Oil decreased 0.67 USD/BBL or -1.63% to 40.4500
  • Brent decreased 0.5 USD/BBL or -1.15% to 43.0300
  • Natural gas increased 0.07 USD/MMBtu or 2.35% to 3.0450
  • Gasoline decreased 0.0242 USD/GAL or -2.09% to 1.1329
  • Heating oil decreased 0.0246 USD/GAL or -1.99% to 1.2087

The above data was collected around 12:50 EST on Friday

 

  • Top commodity gainers: Rubber (5.18%), Lumber (4.31%), Cocoa (8.55%), and Orange Juice (2.46%)
  • Top commodity losers: Oat (-1.92%), Ethanol (-2.07%), Gasoline (-2.09%), and Heating Oil (-1.99%)

The above data was collected around 12:55 EST on Friday.

BONDS:

Japan 0.03%(-0bp), US 2’s 0.18%(+0bps), US 10’s 0.89%(+0bps); US 30’s 1.65%(-1bps), Bunds -0.55% (-2bp), France -0.30% (-2bp), Italy 0.65% (-0bp), Turkey 12.18% (+8bp), Greece 0.87% (+5bp), Portugal 0.11% (-0bp); Spain 0.13% (-0bp) and UK Gilts 0.35% (-0bp).