Market Talk – October 2, 2020

ASIA:

China saw 108 million visits and raked in 76.5 billion yuan in tourism income on October 2, the second day of the National Day holiday, while the first day observed a total of 97 million visits with 76.7 billion yuan ($11.3 billion) in tourism income, according to the Ministry of Culture and Tourism, raising people’s expectation for a tourism boom. This year, the National Day coincided with the Mid-Autumn Festival, marking an extended holiday of eight days. It is the first long holiday over three days since the coronavirus epidemic broke out in January.

Indian equity markets were closed today on account of Mahatma Gandhi Jayanti. Commodity and currency markets were also shut for the day.

The Reserve Bank of India (RBI) has extended the enhanced borrowing facility provided to banks by six months to meet liquidity shortage till March 31, 2021. On March 27, the central bank had increased the borrowing limit for scheduled banks under the marginal standing facility (MSF) scheme from 2 percent to 3 percent of their net demand and time liabilities. Under the MSF, banks can borrow overnight at their discretion by dipping into the statutory liquidity ratio. The marginal standing facility rate currently stands at 4.25 percent.

The major Asian stock markets had a negative day today:

  • NIKKEI 225 decreased 155.22 points or -0.67% to 23,029.90
  • Shanghai closed
  • Hang Seng closed
  • ASX 200 decreased 81.40 points or -1.39% to 5,791.50
  • Kospi closed
  • SENSEX closed
  • Nifty50 closed

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.0027 or -0.38% to 0.71540
  • NZDUSD decreased 0.00213 or -0.32% to 0.66274
  • USDJPY decreased 0.2 or -0.19% to 105.36
  • USDCNY increased 0.00558 or 0.08% to 6.75541

Precious Metals:

  • Gold decreased 3.15 USD/t oz. or -0.17% to 1,901.90
  • Silver decreased 0.039 USD/t. oz or -0.16% to 23.851

Some economic news from last night:

Japan:

Jobs/applications ratio (Aug) decreased from 1.08 to 1.04

Unemployment Rate (Aug) increased from 2.9% to 3.0%

Monetary Base (YoY) increased from 11.5% to 14.3%

Australia:

Retail Sales (MoM) (Aug) decreased from 3.2% to -4.0%

 

Some economic news from today:

India:

FX Reserves, USD decreased from 545.04B to 542.02B

Exports (USD) (Sep) increased from 22.70B to 27.40B

Imports (USD) (Sep) increased from 29.47B to 30.31B

Trade Balance (Sep) increased from -6.77B to -2.91B

Japan:

Household Confidence (Sep) increased from 29.3 to 32.7

Singapore:

Manufacturing PMI (Sep) increased from 50.1 to 50.3

 

EUROPE/EMEA:

US retailer Walmart pulled out of Britain’s grocery market after selling control of Asda to TDR Capital and two British billionaire brothers in a deal valued at £6.8 billion ($8.79bn). Under the new ownership structure, brothers Mohsin and Zuber Issa, founders and co-chief executives of petrol station retailer EG Group, and private equity company TDR Capital, will acquire a majority stake in the supermarket chain on a debt-free and cash-free basis, according to a statement on Asda’s website. Walmart, the world’s largest retailer, will retain a minority stake and a seat on the board.

Saudi Arabia will exempt real estate transactions from a 15 percent VAT (value-added tax) and instead impose a new 5 per cent tax on property deals, according to a Royal Order issued Friday. The Saudi finance minister said on Twitter that the order also aimed to support Saudi citizens who want to buy homes. The country is facing a deep recession, with the economy shrinking by 7 percent in the second quarter and unemployment hitting a record high of 15.4 percent. The government had in July tripled VAT to 15 per cent to boost non-oil revenues, but the move set off limited domestic demand.

The major Europe stock markets had a mixed day:

  • CAC 40 increased 0.84 points or 0.02% to 4,824.88
  • FTSE 100 increased 22.67 points or 0.39% to 5,902.12
  • DAX 30 decreased 41.73 points or -0.33% to 12,689.04

 

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00364 or -0.31% to 1.17077
  • GBPUSD increased 0.00415 or 0.32% to 1.29269
  • USDCHF increased 0.00129 or 0.14% to 0.92028

 

Some economic news from Europe today:

France:

French Government Budget Balance (Aug) decreased from -151.0B to -165.7B

Spain:

Spanish Unemployment Change decreased from 29.8K to -26.3K

Italy:

Italian Public Deficit (Q2) increased from 9.8% to 10.3%

Italian GDP (QoQ) (Q2) decreased from -12.4% to -12.8%

Italian GDP (YoY) (Q2) decreased from -17.3% to -17.7%

Norway:

Unemployment Change (Sep) decreased from 134.57K to 122.63K

Unemployment Rate n.s.a. (Sep) decreased from 4.30% to 3.70%

Euro Zone:

Core CPI (MoM) increased from -0.6% to 0.2%

Core CPI (YoY) decreased from 0.4% to 0.2%

CPI (YoY) (Sep) decreased from -0.2% to -0.3%

CPI (MoM) increased from -0.4% to 0.1%

CPI, n.s.a (Sep) increased from 104.88 to 104.99

HICP ex Energy & Food (YoY) (Sep) decreased from 0.6% to 0.4%

HICP ex Energy and Food (MoM) increased from -0.5% to 0.1%

US/AMERICAS:

US President Donald Trump and First Lady Melania tested positive for coronavirus. A White House representative told reporters at the New York Times that the president is “showing symptoms of the novel coronavirus, but mild ones,” and he reportedly has “what one person described as cold-like symptoms.” Vice President Mike Pence and his wife both tested negative for the virus.

Employment in the US rose by 661,000 positions in September, as the unemployment rate fell to 7.9%. According to the Bureau of Labor Statistics, “notable job gains occurred in leisure and hospitality, in retail trade, in health care and social assistance, and in professional and business services.” Labor force participation decreased 0.3% last month to 61.4%, and there are an estimated 1.9 million Americans actively seeking employment. Nearly a quarter of the country (22.7%) continued to work remotely in September, which changed little from the month prior (24.3%).

US Market Closings:

  • Dow declined 133.49 points or -0.48% to 27,683.41
  • S&P 500 32.31 points or -0.96% to 3,348.49
  • Nasdaq declined 251.49 points or -2.22% to 11,075.02
  • Russell 2000 advanced 8.09 points or 0.53% to 1,539.3

Canada Market Closings:

  • TSX Composite advanced 14.71 points or 0.09% to 16,199.25
  • TSX 60 advanced 1.83 points or 0.19% to 971.32

Brazil Market Closing:

  • Bovespa declined 1,462.84 points or -1.53% to 94,015.68

ENERGY:

The oil markets had a negative day today:

  • Crude Oil decreased 1.3 USD/BBL or -3.36% to 37.4200
  • Brent decreased 1.35 USD/BBL or -3.30% to 39.5800
  • Natural gas decreased 0.013 USD/MMBtu or -0.52% to 2.4700
  • Gasoline decreased 0.0222 USD/GAL or -1.94% to 1.1243
  • Heating oil decreased 0.0289 USD/GAL or -2.58% to 1.0912

The above data was collected around 11:58 EST on Friday

  • Top commodity gainers: Coffee (1.59%), Aluminum (1.51%), Tin (1.13%), and Copper (3.32%)
  • Top commodity losers: Crude Oil (-3.36%), Brent (-3.30%), Heating Oil (-2.58%), and Palm Oil (-2.95%)

The above data was collected around 12:03 EST on Friday.

BONDS:

Japan 0.02%(+1bp), US 2’s 0.13% (+0bps), US 10’s 0.69%(+1bps); US 30’s 1.47%(+2bps), Bunds -0.54% (-2bp), France -0.26% (-1bp), Italy 0.80% (-4bp), Turkey 12.77% (+13bp), Greece 1.00% (-2bp), Portugal 0.23% (-3bp); Spain 0.22% (+5bp) and UK Gilts 0.25% (+1bp).