Market Talk – October 13, 2020

ASIA:

The Australian government is seeking assurances from China over the impact of reported curbs of coal imports, while calling on Beijing to end the freeze on ministerial talks as concerns grow about widening trade tensions. There has not yet been any official confirmation of the move – first reported by S&P Global Platts and Argus Media – but Australia’s trade minister, Simon Birmingham, said the government had made approaches to China “through diplomatic channels overnight”.

The IMF said in its report Indian economy will contract by 10.3% in 2020. The 2020 projection for India is a downgrade of -5.8 percentage points from the IMF’s June projection for the country. India is expected to rebound in 2021 with 8.8 percent growth – an upgrade of 2.8 percentage points relative to the June update.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 43.09 points or 0.18% to 23,601.78
  • Shanghai increased 1.28 points or 0.04% to 3,359.75
  • Hang Seng closed
  • ASX 200 increased 63.70 points or 1.04% to 6,195.70
  • Kospi decreased 0.58 points or -0.02% to 2,403.15
  • SENSEX increased 31.71 points or 0.08% to 40,625.51
  • Nifty50 increased 3.55 points or 0.03% to 11,934.50

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00482 or -0.67% to 0.71596
  • NZDUSD decreased 0.00066 or -0.10% to 0.66411
  • USDJPY increased 0.23 or 0.22% to 105.56
  • USDCNY increased 0.00201 or 0.03% to 6.74584

Precious Metals:

  • Gold decreased 28.80 USD/t oz. or -1.50% to 1,893.15
  • Silver decreased 1.05 USD/t. oz or -4.19% to 24.059

Some economic news from last night:

China:

Exports (YoY) (Sep) increased from 9.5% to 9.9%

Imports (YoY) (Sep) increased from -2.1% to 13.2%

Trade Balance (USD) (Sep) decreased from 58.93B to 37.00B

Japan:

Reuters Tankan Index (Oct) increased from -29 to -26

M2 Money Stock (YoY) increased from 8.6% to 9.0%

M3 Money Supply (Sep) increased from 1,906.3T to 1,915.2T

New Zealand:

Electronic Card Retail Sales (YoY) (Sep) increased from -0.8% to 7.3%

Electronic Card Retail Sales (MoM) (Sep) increased from -8.9% to 5.4%

FPI (MoM) (Sep) decreased from 0.7% to -1.0%

Some economic news from today:

Indonesia:

Loans (YoY) (Sep) decreased from 1.04% to 0.12%

Interest Rate Decision remain the same at 4.00%

Deposit Facility Rate (Oct) remain the same at 3.25%

Lending Facility Rate (Oct) remain the same at 4.75%

 

EUROPE/EMEA:

The UK economy is set for a dramatic slowdown due to a resurgence in infections and the ensuing new restrictions, according to a Deutsche Bank economist who commented after the latest data showed a rise in joblessness. Deutsche Bank economist Sanjay Raja said the UK economy will grow about 16% quarter-on-quarter in the third quarter, before slowing to just 2% growth in the fourth quarter, with risks “tilted firmly to the downside.”

The major Europe stock markets had a negative day:

  • CAC 40 decreased 31.68 points or -0.64% to 4,947.61
  • FTSE 100 decreased 31.67 points or -0.53% to 5,969.71
  • DAX 30 decreased 119.42 points or -0.91% to 13,018.99

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00784 or -0.66% to 1.17348
  • GBPUSD decreased 0.01107 or -0.85% to 1.29546
  • USDCHF increased 0.00581 or 0.64% to 0.91483

Some economic news from Europe today:

UK:

BRC Retail Sales Monitor (YoY) (Sep) increased from 4.7% to 6.1%

Average Earnings ex Bonus (Aug) increased from 0.2% to 0.8%

Average Earnings Index +Bonus (Aug) increased from -1.0% to 0.0%

Claimant Count Change (Sep) decreased from 73.7K to 28.0K

Employment Change 3M/3M (MoM) (Aug) decreased from -12K to -153K

Unemployment Rate (Aug) increased from 4.1% to 4.5%

Germany:

German CPI (YoY) (Sep) decreased from 0.0% to -0.2%

German CPI (MoM) (Sep) decreased from -0.1% to -0.2%

German HICP (MoM) (Sep) decreased from -0.2% to -0.4%

German HICP (YoY) (Sep) decreased from -0.1% to -0.4%

German ZEW Current Conditions (Oct) increased from -66.2 to -59.5

German ZEW Economic Sentiment (Oct) decreased from 77.4 to 56.1

Euro Zone:

ZEW Economic Sentiment (Oct) decreased from 73.9 to 52.3

US/AMERICAS:

One of the most profitable online sales began this Tuesday, the annual Amazon Prime Day. Amazon’s stock has already gained 86% this year, and analysts’ are predicting a lucrative pay day for the company. Amazon CEO Jeff Bezos, the largest Amazon shareholder, became the richest man in the world this year with a net worth of $200 billion as online sales skyrocketed due to the coronavirus closures. The company eMarketer anticipates that the company will profit $9.91 billion, which is a jump from last year’s Prime Day earnings of $7.1 billion.

Johnson & Johnson discontinued its coronavirus vaccine study after a participant fell unexplainably ill. This is the second high profile halt of a coronavirus vaccine study, as AstraZeneca was also forced to discontinue their study after someone became ill. In both studies, adenoviruses were given to patients to trigger an autoimmune response. Both companies are receiving US government funding through Operation Warp Speed that is designed to create a coronavirus vaccine as quickly as possible. Later in the day, drugmaker Eli Lilly and Co. also announced that they are discontinuing their vaccine trial program “to cautiously ensure the safety of the patients participating in this study,” a spokesperson said.

Facebook announced this Tuesday that they will ban any ads discouraging people from taking a coronavirus vaccine. “If an ad that advocates for/against legislation or government policies explicitly discourages a vaccine, it will be rejected. That includes portraying vaccines as useless, ineffective, unsafe or unhealthy, describing the diseases vaccines are created for as harmless, or the ingredients in vaccines as harmful or deadly,” a spokesperson told CNBC.

US Market Closings:

  • Dow declined 157.71 points or -0.55% to 28,679.81
  • S&P 500 declined 22.29 points or -0.63% to 3,511.93
  • Nasdaq declined 12.36 points or -0.1% to 11,863.9
  • Russell 2000 declined 12.21 points or -0.74% to 1,636.85

Canada Market Closings:

  • TSX Composite declined 51.98 points or -0.31% to 16,510.83
  • TSX 60 declined 3.12 points or -0.31% to 987.83

Brazil Market Closing:

  • Bovespa advanced 1,019.51 points or 1.05% to 98,502.82

ENERGY:

The oil markets had a mixed day today:

  • Crude Oil increased 0.84 USD/BBL or 2.13% to 40.2700
  • Brent increased 0.7 USD/BBL or 1.68% to 42.4200
  • Natural gas decreased 0.028 USD/MMBtu or -0.97% to 2.8530
  • Gasoline decreased 0.0002 USD/GAL or -0.02% to 1.1776
  • Heating oil increased 0.0078 USD/GAL or 0.67% to 1.1680

The above data was collected around 12:39 EST on Tuesday

  • Top commodity gainers: Crude Oil (2.13%), Brent (1.68%), Bitumen (3.52%), and Sugar (1.52%)
  • Top commodity losers: Coal (-3.43%), Palladium (-3.84%), Cocoa (-2.66%), and Silver (-4.19%)

The above data was collected around 12:50 EST on Tuesday.

BONDS:

Japan 0.03%(+0bp), US 2’s 0.14% (-1bps), US 10’s 0.73%(-4bps); US 30’s 1.52%(-5bps), Bunds -0.55% (-1bp), France -0.29% (-1bp), Italy 0.66% (-2bp), Turkey 13.17% (-3bp), Greece 0.82% (+1bp), Portugal 0.17% (+1bp); Spain 0.16% (+8bp) and UK Gilts 0.23% (-4bp).

  • US 3-Month Bill Auction increased from 0.095% to 0.105%
  • US 6-Month Bill Auction increased from 0.110% to 0.115%
  • Spanish 3-Month Letras Auction decreased from -0.505% to -0.676%
  • Italian 3-Year BTP Auction decreased from 0.07% to -0.14%
  • Italian 30-Year BTP Auction decreased from 1.910% to 1.480%
  • Italian 7-Year BTP Auction decreased from 0.75% to 0.34%