Market Talk – November 18, 2021

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ASIA:

Recent outbreaks of the Delta variant have prompted travel restrictions and lockdowns in some cities in China, damping economic activities, while Beijing’s tough stance to deleverage the property sector, which contributes 14 percent to China’s gross domestic product (GDP), will further slow growth in the coming months, according to Andrew Fennell, a senior director at Fitch Ratings. Fitch has already cut its forecast for China’s growth in 2021 to 8.1 percent from 8.4 percent, while the US ratings agency has also lowered its 2022 GDP growth forecast to 5.2 percent from 5.5 percent.

 

India is likely to bar the use of cryptocurrencies for transactions or making payments but allow them to be held as assets like gold, shares or bonds, a major Indian financial daily reported on Wednesday. Citing sources from government the newspaper said this approach would avoid implementing a complete ban, though the government was keen to stop crypto companies, including exchanges and platforms from actively trying to attract new investors. The crypto community has made several representations to Indian authorities asking to be classified as an asset rather than as a currency, in order to gain acceptance and avoid a ban. India’s digital currency market was worth $6.6 billion in May 2021, compared with $923 million in April 2020, according to blockchain data platform Chainalysis.

 

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 89.67 or -0.30% to 29,598.66
  • Shanghai decreased 16.66 or -0.47% to 3,520.71
  • Hang Seng decreased 330.36 points or -1.29% to 25,319.72
  • ASX 200 increased 9.30 points or 0.13 to 7,379.20
  • Kospi decreased 15.04 points or -0.51% to 2,947.38
  • SENSEX decreased 372.32 points or -0.62% to 59,636.01
  • Nifty50 decreased 133.85 points or -0.75% to 17,764.80

 

 

The major Asian currency markets had a green day today:

  • AUDUSD increased 0.00079 or 0.11% to 0.72743
  • NZDUSD increased 0.00317 or 0.45% to 0.70324
  • USDJPY increased 0.03 or 0.02% to 114.23
  • USDCNY increased 0.00527 or 0.08% to 6.37940

 

Precious Metals:

  • Gold decreased 7.11 USD/t oz. or -0.38% to 1,859.85
  • Silver decreased 0.195 USD/t. oz or -0.78% to 24.854

 

Some economic news from last night:

Japan:

Foreign Investments in Japanese Stocks increased from 146.3B to 164.9B

Foreign Bonds Buying decreased from 1,290.6B to 456.3B

New Zealand:

Inflation Expectations (QoQ) increased from 2.3% to 3.0%

 

Some economic news from today:

Indonesia:

Deposit Facility Rate (Nov) remain the same at 2.75%

Lending Facility Rate (Nov) remain the same at 4.25%

Loans (YoY) (Oct) increased from 2.21% to 3.24%

Interest Rate Decision remain the same at 3.50%

 

EUROPE/EMEA:

The Bank of England faces another decision next month on whether to become the first of the world’s major central banks to raise interest rates since the coronavirus pandemic struck the global economy. The BoE shocked financial markets on Nov. 4 when its policymakers voted 7-2 to keep Bank Rate at 0.1%, even as it said inflation was heading towards 5%. Since then, data has suggested the labor market withstood the end of the government’s furlough scheme – something the BoE wanted to see before any rate hike, and inflation hit a 10-year high of 4.2% in October. The BoE’s Monetary Policy Committee is due to announce its next policy decisions on Dec. 16 and Feb. 3.

 

Germany’s inflation rate will drop noticeably at the start of next year when the effects of one-off factors peter out, the economy ministry said on Monday. A base effect resulting from last year’s cut in value-added tax, part of the government’s COVID-19 relief measures, has contributed to the current inflation rate of 4.5% – the highest since 1993. Its impact has been compounded by a sharp rise in prices for raw materials and a rise in energy prices. That sentiment, shared by central banks, was called into question by Deutsche Bank CEO Christian Sewing, who said that the situation required swift countermeasures.

 

The major Europe stock markets had a negative day:

  • CAC 40 decreased 14.87 points or -0.21% to 7,141.98
  • FTSE 100 decreased 35.24 points or -0.48% to 7,255.96
  • DAX 30 decreased 29.40 points or -0.18% to 16,221.73

 

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00512 or 0.45% to 1.13689
  • GBPUSD increased 0.00112 or 0.08% to 1.35018
  • USDCHF decreased 0.00306 or -0.33% to 0.92563

 

Some economic news from Europe today:

UK:

Car Registration (YoY) (Oct) increased from -34.4% to -24.6%

Car Registration (MoM) (Oct) decreased from 216.5% to -50.6%

Italy:

Italian Car Registration (YoY) (Oct) decreased from -32.7% to -35.7%

Italian Car Registration (MoM) (Oct) decreased from 62.6% to -4.0%

Germany:

German Car Registration (MoM) (Oct) decreased from 1.9% to -9.3%

German Car Registration (YoY) (Oct) decreased from -25.7% to -34.9%

France:

French Car Registration (YoY) (Oct) decreased from -20.5% to -30.7%

French Car Registration (MoM) (Oct) decreased from 52.0% to -11.4%

Swiss:

Trade Balance (Oct) increased from 5.010B to 5.651B

US/AMERICAS:

Initial unemployment claims remained relatively stable over the past two weeks, according to the Labor Department. Claims for the week ending on November 13 totaled 268,000, marking a 1,000 person decline from the week prior. Still, this is the lowest level of unemployment since the pandemic began. The four-week moving average was adjusted to 272,750.

According to recent data, child care costs have surged by 210% from 1990 to 2019. According to Penny Hoarder’s survey, around 40% of US families are in debt due to rising child care costs. Consequently, 26% of US families reported relocating due to the high cost of child care. An additional 38% stated that they took on a second job to pay for child care, while 28% borrowed money from relatives and friends. Around 25% reported that they have had to abandon their pets due to rising costs.

US Market Closings:

  • Dow declined 60.1 points or -0.17% to 35,870.95
  • S&P 500 advanced 15.87 points or 0.34% to 4,704.54
  • Nasdaq advanced 72.14 points or 0.45% to 15,993.71
  • Russell 2000 declined 13.42 points or -0.56% to 2,363.59

 

Canada Market Closings:

  • TSX Composite declined 15.48 points or -0.07% to 21,637.54
  • TSX 60 advanced 1.72 points or 0.13% to 1,304.79

 

Brazil Market Closing:

  • Bovespa declined 522.45 points or -0.51% to 102,426.00

 

ENERGY:

The oil markets had a mixed day today:

 

  • Crude Oil increased 0.73 USD/BBL or 0.93% to 79.0900
  • Brent increased 1.01 USD/BBL or 1.26% to 81.2800
  • Natural gas increased 0.093 USD/MMBtu or 1.93% to 4.9090
  • Gasoline increased 0.0104 USD/GAL or 0.46% to 2.2907
  • Heating oil decreased 0.0066 USD/GAL or -0.28% to 2.3578

 

The above data was collected around 14:15 EST on Thursday

 

  • Top commodity gainers: Palm Oil (2.04%) and Lumber (6.32%), Natural Gas (1.93%) and Oat (2.47%)
  • Top commodity losers: Bitumen (-3.22%), Palladium (-2.74%), Orange Juice (-3.75%), and Cotton (-1.84%)

 

The above data was collected around  14:21 EST on Thursday

 

BONDS:

 

Japan 0.082%(+0.7bp), US 2’s 0.4961% (-0.00%), US 10’s 1.5838%(-0.16bps); US 30’s 1.9699% (+0.00%), Bunds -0.269% (-2.5bp), France 0.0660% (-4.9bp), Italy 0.9340% (-4.6bp), Turkey 19.11% (+16bp), Greece 1.191% (-3.5bp), Portugal 0.357% (-3.6bp); Spain 0.453% (-4.01bp) and UK Gilts 0.925