Market Talk – September 12, 2019

ASIA:

US President Trump announced today that they will delay any tariffs on around 250 billion USD worth of Chinese goods as a “gesture of goodwill” ahead of the talks next month. China yesterday announced they will remove tariffs on 17 US products ranging from medicine to produce. According to a White House official, they will not be looking for any interim solutions to the trade deal and will only focus on long-term objectives.

The major Asian stock markets had a mixed day today:

  • Shanghai increased 22.42 points or 0.75% to 3,031.24
  • Kospi closed (public holiday)
  • ASX 200 increased 16.90 points or 0.25% to 6,654.90
  • NIKKEI 225 increased 161.85 points or 0.75% to 21,759.61
  • Hang Seng decreased 71.43 points or -0.26% to 27,087.63
  • SENSEX decreased 166.54 points or -0.45% to 37,104.28

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.0015 or 0.22% to 0.6876
  • NZDUSD increased 0.0017 or 0.26% to 0.6428
  • USDJPY increased 0.0760 or 0.07% to 107.8860
  • USDCNY decreased 0.0284 or 0.40% to 7.0788

Precious Metals:

  • Gold increased 0.35 USD/t oz. or 0.02% to 1,497.44
  • Silver decreased 0.022 USD/t. oz or -0.12%% to 18.0305

Some economic news from last night:

Australia:

  • MI Inflation Expectations decreased from 3.5% to 3.1%

New Zealand:

  • FPI (MoM) (Aug) decreased from 1.1% to 0.7%

Singapore:

  • Unemployment Rate (Q3) remain the same at 2.2%

Japan:

  • Reuters Tankan Index (Sep) decreased from -4 to -7
  • Core Machinery Orders (YoY) (Jul) decreased from 12.5% to 0.3%
  • Core Machinery Orders (MoM) (Jul) decreased from 13.9% to -6.6%
  • Foreign Bonds Buying decreased from 1,495.7B to 724.4B
  • Foreign Investments in Japanese Stocks decreased from -89.5B to -161.3B
  • PPI (MoM) (Aug) decreased from 0.0% to -0.3%
  • PPI (YoY) (Aug) decreased from -0.6% to -0.9%

Some economic news from today:

India:

  • CPI (YoY) (Aug) increased from 3.15% to 3.21%
  • Cumulative Industrial Production (Jul) decreased from 3.60% to 3.30%
  • Industrial Production (YoY) (Jul) increased from 1.2% to 4.3%
  • Manufacturing Output (MoM) (Jul) increased from 0.2% to 4.2%

China:

  • FDI (Aug) decreased from 7.30% to 6.90%

Japan:

  • Tertiary Industry Activity Index (MoM) increased from -0.1% to 0.1%

Singapore:

  • Retail Sales (YoY) (Jul) increased from -8.9% to -1.8%
  • Retail Sales (MoM) (Jul) increased from -2.2% to 2.6%

EUROPE/EMEA:

There are ongoing tensions within Parliament over UK PM Boris Johnson’s decision to dismiss Parliament. An appeal will be held regarding the Scottish high court’s decision for it to be deemed illegal.

Apparently, a leaked EU resolution shows that the EU is willing to offer the UK another extension ahead of the October 31st deadline. This will be the third extension. This will also give the UK some time to form another general election.

France is the first country to discuss the option of blocking the new Facebook currency libra, as it could potentially damage monetary sovereignty of countries. The finance minister outlined that the currency poses several risks to the financial markets.

The major Europe stock markets had a green day today:

  • CAC 40 increased 24.80 points or 0.44% to 5,642.86
  • FTSE 100 increased 6.64 points, or 0.09% to 7,344.67
  • DAX increased 51.18 points or 0.41% to 12,410.25

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00591 or 0.54% to 1.10681
  • GBPUSD increased 0.00224 or 0.18% to 1.23484
  • USDCHF decreased 0.0015 or -0.15% to 0.9911

Some economic news from Europe today:

UK:

  • RICS House Price Balance (Aug) increased from -9% to -4%
  • Thomson Reuters IPSOS PCSI (Sep) decreased from 48.3 to 48.1

Germany:

  • Germany Thomson Reuters IPSOS PCSI (Sep) increased from 54.17 to 54.56
  • German CPI (YoY) (Aug) decreased from 1.7% to 1.4%
  • German CPI (MoM) (Aug) decreased from 0.5% to -0.2%
  • German HICP (YoY) (Aug) decreased from 1.1% to 1.0%
  • German HICP (MoM) (Aug) decreased from 0.4% to -0.1%

Swiss:

  • PPI (YoY) (Aug) decreased from -1.7% to -1.9%
  • PPI (MoM) (Aug) decreased from -0.1% to -0.2%

France:

  • France Thomson Reuters IPSOS PCSI (Sep) decreased from 45.21 to 44.51
  • French CPI (YoY) decreased from 1.1% to 1.0%
  • French CPI (MoM) (Aug) increased from -0.2% to 0.5%
  • French HICP (YoY) (Aug) remain the same at 1.3%
  • French HICP (MoM) (Aug) increased from -0.2% to 0.5%

Euro Zone:

  • Industrial Production (MoM) (Jul) increased from -1.4% to -0.4%
  • Industrial Production (YoY) (Jul) increased from -2.4% to -2.0%
  • Deposit Facility Rate (Sep) decreased from -0.40% to -0.50%
  • ECB Marginal Lending Facility remain the same at 0.25%
  • ECB Interest Rate Decision (Sep) remain the same at 0.00%

Italy:

  • Italy Thomson Reuters IPSOS PCSI (Sep) decreased from 42.97 to 40.56
  • Italian Quarterly Unemployment Rate decreased from 10.3% to 9.9%

US/AMERICAS:

Actions are taking place to mend tensions between the US and China. US imposed tariffs on $250 billion worth of Chinese goods will be delayed by two weeks. “At the request of the Vice Premier of China, Liu He, and due to the fact that the People’s Republic of China will be celebrating their 70th Anniversary on October 1st, we have agreed, as a gesture of good will, to move the increased Tariffs on 250 Billion Dollars worth of goods (25% to 30%), from October 1st to October 15th,” President Trump posted on Twitter. This Thursday, the president announced that China will make good on their promise to purchase US agriculture.

Treasury Secretary Steven Mnuchin stated that the US may release a 50-year Treasury bond in 2020. In an interview with CNBC, Mnuchin said he believes there is a demand for “an ultra-long bond” and that the administration is “seriously considering” the issue.

Brazil’s Minister of Foreign Affairs Ernesto Araujo denied claims that the government is responsible for the ongoing Amazon wildfires. Araujo believes that other countries are using the wildfires as an excuse to “invade Brazil.” According to Brazil’s National Institute for Space Research, over 6.1 million acres have been lost to the fire.

US Market Closings:

  • Dow advanced 45.41 points or 0.17% to 27,182.45
  • S&P 500 advanced 8.64 points or 0.29% to 3,009.57
  • Nasdaq advanced 24.79 points or 0.30% to 8,194.47
  • Russell 2000 declined 0.65 of a points or -0.04% to 1,575.07

Canada Market Closings:

  • TSX composite advanced 32.14 points or 0.19% to 16,643.28
  • TSX 60 advanced 3.18 points or 0.32% to 996.14

Brazil Market Closing:

  • Bovespa advanced 925.31 points or 0.89% to 104,370.91

ENERGY:

 Prices continue to dribble down from the six-week high. Earlier this week, the Saudi minister announced more production cuts. However, tensions have eased in the Middle East since the firing of John Bolton pushed the prices down.

 The oil markets had a mixed day today:

  • Crude Oil decreased 0.65 USD/BBL or -1.17% to 55.2111
  • Brent decreased 0.64 USD/BBL or -1.05% to 60.2509
  • Natural gas increased 0.011 USD/MMBtu or 0.43% to 2.5579
  • Gasoline decreased 0.02 USD/GAL or -1.27% to 1.5470
  • Heating oil decreased 0.0211 USD/GAL or -1.11% to 1.8844
  • Top commodity gainers: Cotton (4.18%), Soybeans (2.99%), Palladium (2.41%), and Copper (1.19 %)
  • Top commodity losers: Oat (-8.01 %), Gasoline (-1.27%), Crude Oil (-1.17%), and Brent (-1.05%)

The above data was collected around 13:10 EST on Thursday.

 BONDS:

Japan -0.20%(+2bp), US 2’s 1.67% (+1bps), US 10’s 1.73%(+3bps), US 30’s 2.22%(+3bps), Bunds -0.54% (+0bp), France -0.24% (+1bp), Italy 1.00% (-3bp), Turkey 15.17% (-20bp), Greece 1.66% (+1bp), Portugal 0.27% (-1bp), Spain 0.26% (-0bp) and UK Gilts 0.64% (-0bp).

  • US 30-Year Bond Auction decreased from 2.335% to 0.000%
  • US 4-Week Bill Auction decreased from 2.025% to 0.000%
  • US 8-Week Bill Auction decreased from 1.960% to 1.920%
  • Italian 3-Year BTP Auction decreased from 0.49% to -0.01%
  • Italian 7-Year BTP Auction decreased from 1.24% to 0.56%
  • Italian 30-Year BTP Auction decreased from 3.650% to 2.060%