Market Talk – October 30, 2020

ASIA:

China’s gasoline demand could hit a peak around 2027, according to a new report from Goldman Sachs. Demand could fall by around 6 percent from that peak by 2030. However, Goldman Sachs does not see crude oil demand hitting a peak this decade, “due to sustained non-OECD economic growth.” In the next five years, China and India still exhibit strong demand growth, averaging 2 and 3 percent CAGR, respectively.

India’s infrastructure output in September contracted 0.8% from a year earlier, government data released on Thursday showed. Infrastructure output, which comprises eight sectors including coal, crude oil and electricity and accounts for nearly 40% of industrial output, contracted 14.9% in the six months through September from a year earlier, the data showed.

The major Asian stock markets had a negative day today:

  • NIKKEI 225 decreased 354.81 points or -1.52% to 22,977.13
  • Shanghai decreased 48.19 points or -1.47% to 3,224.53
  • Hang Seng decreased 479.18 points or -1.95% to 24,107.42
  • ASX 200 decreased 32.70 points or -0.55% to 5,927.60
  • Kospi decreased 59.52 points or -2.56% to 2,267.15
  • SENSEX decreased 135.78 points or -0.34% to 39,614.07
  • Nifty50 decreased 28.40 points or -0.24% to 11,642.40

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.0009 or -0.12% to 0.70282
  • NZDUSD decreased 0.0028 or -0.42% to 0.66014
  • USDJPY increased 0.1090 or 0.10% to 104.67
  • USDCNY decreased 0.0087 or -0.13% to 6.69649

 

Precious Metals:

  • Gold increased 12.12 USD/t oz. or 0.65% to 1,879.25
  • Silver increased 0.37 USD/t. oz or 1.57% to 23.640

 

Some economic news from last night:

Japan:

Jobs/applications ratio (Sep) decreased from 1.04 to 1.03

Tokyo Core CPI (YoY) (Oct) decreased from -0.2% to -0.5%

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

CPI Tokyo Ex Food and Energy (MoM) (Oct) increased from -0.1% to 0.3%

Unemployment Rate (Sep) remain the same at 3.0%

Industrial Production (MoM) (Sep) increased from 1.0% to 4.0%

Industrial Production forecast 1m ahead (MoM) (Oct) decreased from 5.7% to 4.5%

Industrial Production forecast 2m ahead (MoM) (Nov) decreased from 2.9% to 1.2%

South Korea:

Industrial Production (MoM) (Sep) increased from -0.3% to 5.4%

Industrial Production (YoY) (Sep) increased from -2.6% to 8.0%

Retail Sales (MoM) decreased from 3.0% to 1.7%

Service Sector Output (MoM) (Sep) increased from -1.0% to 0.3%

Australia:

Housing Credit (Sep) increased from 0.2% to 0.4%

PPI (YoY) (Q3) remain the same at -0.4%

PPI (QoQ) (Q3) increased from -1.2% to 0.4%

Private Sector Credit (MoM) (Sep) increased from -0.1% to 0.1%

Singapore:

Bank Lending (Sep) decreased from 677.9B to 677.5B

Unemployment Rate (Q3) increased from 2.8% to 3.6%

Indonesia:

Motorbike Sales (YoY) (Sep) increased from -46.90% to -33.20%

 

Some economic news from today:

Japan:

Housing Starts (YoY) (Sep) decreased from -9.1% to -9.9%

Construction Orders (YoY) (Sep) decreased from 28.5% to -10.6%

India:

FX Reserves, USD increased from 555.12B to 560.53B

Hong Kong:

GDP (YoY) (Q3) increased from -9.0% to -3.4%

GDP (QoQ) (Q3) increased from -0.1% to 3.0%

M3 Money Supply (Sep) decreased from 12.1% to 10.7%

Singapore:

Business Expectations (Q3) increased from -7.00 to -3.00

EUROPE/EMEA:

The UK inflation rose in September as the price of eating out increased after the Treasury’s eat-out-to-help-out scheme came to an end, and transportation and the price of cultural activities increased slightly. The consumer price index (CPI) increased to 0.5%, from 0.2% in August, but the effect of the pandemic on the UK economy means inflation remains significantly below the 2% target the government sets for the Bank of England. Surveys of business activity show the UK recovery from the first Covid lockdown flattened out this month and in the eurozone threatened to slip into a double-dip recession. As new restrictions to tackle the second wave drag down activity, the IHS Markit/Cips Flash UK Composite PMI data index fell from 56.5 at the end of September to 52.9 for October

Analysts from a financial information service firm Factset said on Friday Germany is expected to unveil a strong rebound in GDP for the third quarter, but relief could be short-lived as the country stands on the brink of new shutdowns to contain a second coronavirus wave. The survey predicted a rebound of 7.4 percent in July to September after a plunge of almost 10 percent during the second quarter. But Germany, like the rest of the continent, has in recent weeks been engulfed by a second wave of the pandemic, with ECB chief Christine Lagarde noting that recovery in the single currency zone was “losing momentum more rapidly than expected.”

The major Europe stock markets had a mixed day:

  • CAC 40 increased 24.57 points or 0.54% to 4,594.24
  • FTSE 100 decreased 4.48 points or -0.08% to 5,577.27
  • DAX 30 decreased 41.59 points or -0.36% to 11,556.48

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00283 or -0.24% to 1.16485
  • GBPUSD increased 0.00236 or 0.18% to 1.29539
  • USDCHF increased 0.0015 or 0.16% to 0.91687

Some economic news from Europe today:

France:

French GDP (QoQ) (Q3) increased from -13.7% to 18.2%

French Consumer Spending (MoM) (Sep) decreased from 2.2% to -5.1%

French CPI (MoM) increased from -0.5% to -0.1%

French CPI (YoY) remain the same at 0.0%

French HICP (MoM) increased from -0.6% to -0.1%

French HICP (YoY) remain the same at 0.0%

UK:

Nationwide HPI (YoY) (Oct) increased from 5.0% to 5.8%

Nationwide HPI (MoM) (Oct) decreased from 0.9% to 0.8%

Germany:

German Retail Sales (YoY) (Sep) increased from 3.0% to 6.5%

German Retail Sales (MoM) (Sep) decreased from 1.8% to -2.2%

German GDP (YoY) (Q3) increased from -11.3% to -4.1%

German GDP (QoQ) (Q3) increased from -9.8% to 8.2%

Norway:

Credit Indicator (YoY) (Sep) decreased from 4.7% to 4.6%

Central Bank Currency Purchase (Nov) remain the same at -1,600.0M

Unemployment Change (Oct) decreased from 122.63K to 117.91K

Unemployment Rate n.s.a. (Oct) decreased from 3.70% to 3.50%

Swiss:

Retail Sales (YoY) (Sep) decreased from 4.0% to 0.3%

KOF Leading Indicators (Oct) decreased from 110.1 to 106.6

Italy:

Italian Monthly Unemployment Rate (Sep) decreased from 9.7% to 9.6%

Italian GDP (YoY) (Q3) increased from -17.9% to -4.7%

Italian GDP (QoQ) (Q3) increased from -13.0% to 16.1%

Italian CPI (YoY) (Oct) increased from -0.5% to -0.3%

Italian CPI (MoM) (Oct) decreased from 0.3% to 0.2%

Italian HICP (YoY) (Oct) decreased from -0.5% to -0.6%

Italian HICP (MoM) (Oct) increased from -1.3% to 0.6%

Spain:

Spanish GDP (YoY) (Q3) increased from -21.5% to -8.7%

Spanish GDP (QoQ) (Q3) increased from -17.8% to 16.7%

Spanish Current account (Aug) decreased from 1.45B to 1.35B

Euro Zone:

Core CPI (MoM)  increased from 0.1% to 0.2%

Core CPI (YoY) remain the same at 0.2%

CPI (MoM) increased from 0.1% to 0.2%

CPI (YoY) (Oct) remain the same at -0.3%

CPI, n.s.a (Oct) increased from 104.97 to 105.15

GDP (QoQ) increased from -11.8% to 12.7%

GDP (YoY) (Q3) increased from -14.7% to -4.3%

HICP ex Energy & Food (YoY) (Oct) remain the same at 0.4%

Unemployment Rate (Sep) remain the same at 8.3%

US/AMERICAS:

More positive data was released today, reflecting a 0.9% rise in personal income last month, according to the US Bureau of Economic Analysis. Analysts had anticipated an increase of only 0.4%. Furthermore, personal spending grew 1.4%, showing a strengthening consumer economy.

There are only four days left until the 2020 US presidential election, which is poised to be one of the most volatile elections in American history. Although the polls show President Trump and Joe Biden in a neck-to-neck race, rallies for the Biden-Harris ticket seem lackluster. On Wednesday, Biden’s running mate Kamala Harris hosted a campaign rally in Asheville, North Carolina, with only ten people in attendance. North Carolina is one of the swing states where undecided voters typically tilt the results toward blue or red. Colorado, Florida, Iowa, Michigan, Minnesota, Nevada, New Hampshire, Ohio, Pennsylvania, Virginia, and Wisconsin are the other key states for candidates to secure.

The presidential candidates are keenly focused on Florida voters this year, a state infamous for recounts in election history. Biden proclaimed, “it’s over,” for Trump if his campaign secures the Sunshine State vote. Data tracking firm Kantar/CMAG has shown Biden’s campaign outspending Trump in Florida three to one. During a rally in Florida, Trump reiterated the importance of the state’s voters. “For half a century, Joe Biden has been outsourcing your jobs, opening your borders, and sacrificing American blood and treasure in endless foreign wars. Joe Biden is a corrupt politician—If Biden Wins, China Wins. When We Win, Florida Wins—and America Wins!” Trump tweeted after the event.

President Trump also reiterated that, if re-elected, he will not shut down the US economy again. “I disagree with that because we’re never going to lock down again. We locked down, we understood the disease and now we’re open for business,” Trump announced.

According to Statistics Canada, Canada’s real GDP grew at a faster than anticipated rate of 1.2% in August, beating expectations of 0.9%. July’s growth was revised to 3.1% from 3% as well. “This fourth consecutive monthly increase continued to offset the steepest drops on record in Canadian economic activity observed in March and April, however, overall economic activity was still about 5% below February’s pre-pandemic level,” Statistics Canada said in an official statement. The report also noted that good-producing industry increased 0.5%, service industries increased 1.5%, and 15 of the 20 tracked industrial sectors remained unchanged in August.

US Market Closings:

  • Dow declined 157.51 points or -0.59% to 26,501.6
  • S&P 500 declined 40.15 points or -1.21% to 3,269.96
  • Nasdaq declined 274 points or -2.45% to 10,911.59
  • Russell 2000 declined 23.1 points or -1.48% to 1,538.48

Canada Market Closings:

  • TSX Composite declined 90.06 points or -0.57% to 15,580.64
  • TSX 60 declined 5.93 points or -0.63% to 928.9

Brazil Market Closing:

  • Bovespa declined 2,629.76 points or -2.72% to 93,952.4

ENERGY:

The oil markets had a mixed day today:

  • Crude Oil decreased 0.6 USD/BBL or -1.66% to 35.5700
  • Brent decreased 0.17 USD/BBL or -0.45% to 37.4200
  • Natural gas increased 0.065 USD/MMBtu or 1.97% to 3.3660
  • Gasoline increased 0.00 USD/GAL or 0.04% to 1.0520
  • Heating oil decreased 0.00 USD/GAL or -0.24% to 1.0828
  • Top commodity gainers: Natural Gas (1.97%), Rubber (2.32%), Orange Juice (1.77%), and Silver (1.57%)
  • Top commodity losers: Ethanol (-15.03%), Bitumen (-3.54%), Palm Oil (-1.96%), and Cocoa (-1.97%)

The above data was collected around 16:17 EST on Friday.

BONDS:

Japan 0.04%(+1bp), US 2’s 0.15%(+0bps), US 10’s 0.87%(+4bps); US 30’s 1.65%(+2bps), Bunds -0.64% (+0bp), France -0.35% (+0bp), Italy 0.72% (+2bp), Turkey 14.10% (-7bp), Greece 1.07% (+10bp), Portugal 0.10% (-1bp); Spain 0.13% (+5bp) and UK Gilts 0.27% (+5bp).