Market Talk – October 18, 2022

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ASIA:

 

The Bank of Japan is considering revising its inflation outlook upward for the current fiscal year to next March, factoring in a bigger-than-expected impact from the yen’s sharp drop and higher commodity prices, Reuters reported. The central bank is widely expected to maintain its ultralow rate policy as the pace of economic recovery will likely slow down, and the core consumer price index, excluding volatile fresh food items, is seen as undershooting the BOJ’s target of 2% in fiscal 2023 and 2024. Japan has seen wholesale inflation above 9% this year, caused by a surge in import prices inflated by the weaker yen. More companies have been passing on increased costs to consumers by hiking retail prices.

 

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 380.35 points or 1.42% to 27,156.14
  • Shanghai decreased 3.98 points or -0.13% to 3,080.96
  • Hang Seng increased 301.68 points or 1.82% to 16,914.58
  • Kospi increased 30.24 points or 1.36% to 2,249.95
  • ASX 200 increased 114.80 points or 1.72% to 6,779.20
  • SENSEX increased 549.62 points or 0.94% to 58,960.60
  • Nifty50 increased 175.15 points or 1.01% to 17,486.95

 

 

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00106 or -0.17% to 0.62890
  • NZDUSD increased 0.00359 or 0.64% to 0.56689
  • USDJPY increased 0.243 or 0.16% to 149.185
  • USDCNY increased 0.01569 or 0.22% to 7.22359

 

 

Precious Metals:

  • Gold increased 0.80 USD/t oz. or 0.05% to 1,650.74
  • Silver decreased 0.029 USD/t. oz or -0.16% to 18.651

 

Some economic news from last night:

South Koreaļ¼š

M2 Money supply (Aug) decreased from 7.10% to 6.80%

New Zealand:

RBNZ Offshore Holdings (Sep) decreased from 53.60% to 53.20%

CPI (YoY) (Q3) decreased from 7.3% to 7.2%

CPI (QoQ) (Q3) increased from 1.7% to 2.2%

 

Some economic news from today:

New Zealand:

GlobalDairyTrade Price Index decreased from -3.5% to -4.6%

 

 

EUROPE/EMEA:

 

The eurozone economy may be facing a recession but rate hikes remain absolutely necessary because persistently high inflation is damaging the economy and stability, European Central Bank policymaker Gabriel Makhlouf said on Tuesday. “The euro area is facing a difficult combination of high inflation and low economic growth, including the possibility of a technical recession,” Makhlouf, Ireland’s central bank governor said in Cyprus.

The Bank of England looks set to slow its interest rate hikes after Britain’s new finance minister ripped up a stimulus plan, raising the prospect of a deeper recession that will do some of the central bank’s inflation fighting for it. Jeremy Hunt on Monday stripped away most of Prime Minister Liz Truss’s planned tax cuts and shortened her huge energy price cap plan to six months from two years, tightening the screws on the world’s sixth-biggest economy in 2023. On Tuesday, bank ING said it now expected the BoE to raise rates by 75 basis points next month, not 100 as it thought before, even as it said the shorter energy price cap could push inflation in 2023 to 7.6% from a previously estimated 5.9%.

 

 

The major Europe stock markets had a green day:

  • CAC 40 increased 26.34 points or 0.44% to 6,067.00
  • FTSE 100 increased 16.50 points or 0.24% to 6,936.74
  • DAX 30 increased 116.58 points or 0.92% to 12,765.61

 

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00005 or -0.01% to 0.98449
  • GBPUSD decreased 0.00564 or -0.50% to 1.13107
  • USDCHF increased 0.0006 or 0.06% to 0.99690

 

Some economic news from Europe today:

Italy:

Italian Trade Balance (Aug) decreased from -0.460B to -9.569B

Italian Trade Balance EU (Aug) decreased from 2.37B to -1.81B

Germany:

German ZEW Current Conditions (Oct) decreased from -60.5 to -72.2

German ZEW Economic Sentiment (Oct) increased from -61.9 to -59.2

Spain:

Spanish Trade Balance decreased from -6.56B to -7.94B

Euro Zone:

ZEW Economic Sentiment (Oct) increased from -60.7 to -59.7

 

US/AMERICAS:

Homebuilder sentiment is on the decline in the US, according to data provided by the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). The index shed 8 points in October to 38. Anything beneath 50 is considered a contraction, and this reading is the lowest figure since 2012 aside from a brief plummet at the beginning of the pandemic. Rising rates are the main culprit for the curb in demand as the 30-year now sits at 7.12%, marking a 3% jump from the beginning of the year.

Netflixā€™s exceeded expectations after reported 2.41 million new subscribers. The stock rose 10% after the earnings report was released this Tuesday. The company originally forecast growth of only 1 million new subscribers. Revenue came in at $793 billion, while EPS rose to $3.10 compared to $2.13.

US Market Closings:

  • DowĀ advanced 337.98 points or 1.12% to 30,523.8
  • S&P 500Ā advanced 42.03 points or 1.14% to 3,719.98
  • NasdaqĀ advanced 96.6 points or 0.9% to 10,772.4
  • Russell 2000Ā advanced 20.2 points or 1.16% to 1,755.96

Canada Market Closings:

  • TSX CompositeĀ advanced 177.16 points or 0.95% to 18,798.18
  • TSX 60Ā advanced 12.03 points or 0.22% to 46,323.32

 

Brazil Market Closing:

  • BovespaĀ advanced 2,165.6 points or 1.91% to 115,789.58

 

 

ENERGY:

 

The oil markets had a negative day today:

 

  • Crude Oil decreased 2.457 USD/BBL or -2.88% to 83.003
  • Brent decreased 2.023 USD/BBL or -2.21% to 89.597
  • Natural gas decreased 0.2922 USD/MMBtu or -4.87% to 5.7068
  • Gasoline decreased 0.0492 USD/GAL or -1.90% to 2.5439
  • Heating oil decreased 0.0865 USD/GAL or -2.12% to 3.9987

 

The above data was collected around 12:36 EST on Tuesday

 

  • Top commodity gainers: Palm Oil (3.19%), Rhodium (0.73%), Lean Hogs (1.84%) and Orange Juice (5.02%)
  • Top commodity losers: Wheat (-2.27%), Crude Oil (-2.88%), Brent (-2.21%) and Natural Gas (-4.87%)

 

The above data was collected around 12:47 EST on Tuesday.

 

 

BONDS:

 

Japan 0.251%(+0.1bp), US 2ā€™s 4.44% (-0.015%), US 10ā€™s 4.0148% (-0.02bps); US 30ā€™s 4.05% (+0.033%), Bunds 2.283% (+1.2bp), France 2.837% (-1.4bp), Italy 4.659% (-0.1bp), Turkey 10.39% (-235p), Greece 4.985% (+6.1bp), Portugal 3.365% (+0.7bp); Spain 3.463% (+3.2bp) and UK Gilts 3.936% (-3.7bp).