Market Talk – September 15, 2021

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ASIA:

China’s dramatic steps to contain the coronavirus this summer have taken a toll on consumer confidence in the country and are fueling concerns about the strength of the world’s second largest economy. Retail sales struggled in August, increasing just 2.5% compared to a year earlier, according to government statistics released Wednesday. That was much weaker than expected and a dramatic slowdown from the 8.5% uptick recorded in July. Industrial production rose 5.3% in August from a year earlier, also slower than July and the weakest growth generated by China’s factories in a year.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 158.39 points or -0.52% to 30,511.71
  • Shanghai decreased 6.38 points or -0.17% to 3,656.22
  • Hang Seng decreased 469.02 or -1.84% to 25,033.21
  • ASX 200 decreased 20.30 points or -0.27% to 7,417.00
  • Kospi increased 4.57 points or 0.15% to 3,153.40
  • SENSEX increased 476.11 points or 0.82% to 58,723.20
  • Nifty50 increased 139.45 points or 0.80% to 17,519.45

 

 

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00057 or 0.08% to 0.73240
  • NZDUSD increased 0.00083 or 0.12% to 0.71032
  • USDJPY decreased 0.36 or -0.33% to 109.36
  • USDCNY decreased 0.00994 or -0.15% to 6.42811

 

Precious Metals:

  • Gold decreased 11.95 USD/t oz. or -0.66% to 1,792.32
  • Silver decreased 0.103 USD/t. oz or -0.43% to 23.730

 

Some economic news from last night:

China:

House Prices (YoY) (Aug) decreased from 4.6% to 4.2%

Fixed Asset Investment (YoY) (Aug) decreased from 10.3% to 8.9%

Industrial Production (YoY) (Aug) decreased from 6.4% to 5.3%

Chinese Industrial Production YTD (YoY) (Aug) decreased from 14.4% to 13.1%

Retail Sales (YoY) (Aug) decreased from 8.5% to 2.5%

Chinese Retail Sales YTD (YoY) (Aug) decreased from 20.72% to 18.15%

Japan:

Reuters Tankan Index (Sep) decreased from 33 to 18

Core Machinery Orders (MoM) (Jul) increased from -1.5% to 0.9%

Core Machinery Orders (YoY) (Jul) decreased from 18.6% to 11.1%

South Korea:

Unemployment Rate (Aug) decreased from 3.3% to 2.8%

Exports (YoY) (Aug) decreased from 34.9% to 34.9%

Imports (YoY) (Aug) remain the same at 44.0%

Trade Balance (Aug) decreased from 1.67B to 1.65B

Australia:

Westpac Consumer Sentiment (Sep) increased from -4.4% to 2.0%

New Zealand:

Current Account (QoQ) (Q2) increased from -2.90B to -1.40B

Current Account (YoY) (Q2) decreased from -7.24B to -11.23B

Current Account % of GDP (Q2) decreased from -2.20% to -3.30%

Singapore:

Unemployment Rate (Q2) remain the same at 2.7%

 

Some economic news from today:

India:

Exports (USD) (Aug) decreased from 35.43B to 33.28B

Imports (USD) (Aug) increased from 47.01B to 47.09B

Trade Balance (Aug) decreased from -10.97B to -13.81B

Japan:

Tertiary Industry Activity Index (MoM) decreased from 2.2% to -0.6%

Indonesia:

Car Sales (YoY) decreased from 163.55% to 123.50%

Export Growth (YoY) (Aug) increased from 29.32% to 64.10%

Import Growth (YoY) (Aug) increased from 44.44% to 55.26%

Trade Balance (Aug) increased from 2.59B to 4.74B

 

EUROPE/EMEA:

The UK posted the biggest jump in annual inflation on record last month as global supply shortages, and rising wages magnified the scale of price increases after pandemic-related discounts a year ago. Consumer price inflation accelerated to 3.2per cent in the 12 months through August from 2% the previous month, the Office for National Statistics said Wednesday. Economists had forecast an inflation rate of 2.9%. Heading into an uncertain winter amid rising COVID-19 infections and worsening supply issues, the BoE may need to signal a faster pace of policy normalization to come without spooking likely already nervous markets, Berenberg said in a note to clients.

 

The major Europe stock markets had a negative day:

  • CAC 40 decreased 69.35 points or -1.04% to 6,583.62
  • FTSE 100 decreased 17.57 points or -0.25% to 7,016.49
  • DAX 30 decreased 106.99 points or -0.68% to 15,616.00

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00147 or 0.12% to 1.18160
  • GBPUSD increased 0.00332 or 0.24% to 1.38412
  • USDCHF decreased 0.00024 or -0.03% to 0.91988

 

Some economic news from Europe today:

UK:

House Price Index (YoY) decreased from 13.1% to 8.0%

Core CPI (YoY) (Aug) increased from 1.9% to 3.1%

Core CPI MoM (MoM) (Aug) increased from 0.5% to 0.7%

Core PPI Output (MoM) (Aug) remain the same at 1.0%

Core PPI Output (YoY) (Aug) increased from 4.2% to 5.3%

Core RPI (MoM) (Aug) increased from 0.5% to 0.7%

Core RPI (YoY) (Aug) increased from 3.9% to 4.9%

CPI (YoY) (Aug) increased from 2.0% to 3.2%

CPI (MoM) (Aug) increased from 0.5% to 0.7%

CPI, n.s.a (Aug) increased from 111.30 to 112.10

PPI Input (YoY) (Aug) increased from 10.4% to 11.0%

PPI Input (MoM) (Aug) decreased from 1.3% to 0.4%

PPI Output (MoM) (Aug) decreased from 0.8% to 0.7%

PPI Output (YoY) (Aug) increased from 5.1% to 5.9%

RPI (YoY) (Aug) increased from 3.8% to 4.8%

RPI (MoM) (Aug) increased from 0.5% to 0.6%

Norway:

Trade Balance (Aug) increased from 42.2B to 42.6B

France:

French CPI (MoM) (Aug) increased from 0.1% to 0.6%

French CPI (YoY) increased from 1.2% to 1.9%

French HICP (MoM) (Aug) increased from 0.1% to 0.7%

French HICP (YoY) (Aug) increased from 1.5% to 2.4%

Italy:

Italian CPI (YoY) (Aug) increased from 1.9% to 2.0%

Italian CPI (MoM) (Aug) decreased from 0.5% to 0.4%

Italian CPI Ex Tobacco (MoM) (Aug) increased from 1.9% to 2.1%

Italian HICP (YoY) (Aug) increased from 1.0% to 2.5%

Italian HICP (MoM) (Aug) increased from -1.0% to 0.2%

Euro Zone:

Reserve Assets Total (Aug) increased from 888.49B to 1,009.3B

Wages in euro zone (YoY) (Q2) decreased from 2.10% to -0.40%

Industrial Production (YoY) (Jul) decreased from 10.1% to 7.7%

Industrial Production (MoM) (Jul) increased from -0.1% to 1.5%

Labor Cost Index (YoY) (Q2) decreased from 1.30% to -0.10%

US/AMERICAS:

The homebuying frenzy in the US began to cool this August, according to a new report by Redfin. Around 58.7% of agents reported competing for a house last month, representing a new low for the year. Bidding wars peaked in April, with 74.3% of realtors reporting stiff competition. Competiton has also slowed from August 2020 when the rate was 59.4%.

Online goods have risen in price for the past 15 consecutive months. A report by Adobe Digital Insights found that for every $5 spent, Americans spend around $1 digitally online. Online prices grew 3.1% in August on an annual basis, while rising 0.1% from the previous month. The report also found that categories that tended to cater to brick and mortar shopping have moved online. American consumers have spent $541 billion online during the first eight months of 2021, marking a 58% increase YoY. An economist for the National Retail Federation cited “supply chain bottlenecks and low levels of inventories” as the cause of price increases.

President Biden is receiving backlash from the meat industry after accusing them of “pandemic profiteering.” While the cost of meat is noticeably higher, a trade group representing America’s largest meat processors accused the Biden Administration of “refusing to acknowledge” the real issue. “The Administration cannot ignore the fundamental principles of supply and demand,” Anna Potts of the North American Meat Institute. The meat industry is pointing to the same main culprit that other industries are experiencing – a labor shortage. Despite meeting with the USDA and White House Supply Chain Task Force, Potts noted that “not once in any meeting did White House or USDA staff suggest consumer prices were rising because of industry structure.” “The pandemic seems to be the vehicle spawning new bad ideas, and resurrecting other bad ideas, seemingly without recognizing economic realities and unintended consequences,” she continued.

US Market Closings:

  • Dow advanced 236.82 points or 0.68% to 34,814.39
  • S&P 500 advanced 37.65 points or 0.85% to 4,480.7
  • Nasdaq advanced 123.77 points or 0.82% to 15,161.53
  • Russell 2000 advanced 24.46 points or 1.11% to 2,234.45

 

Canada Market Closings:

  • TSX Composite advanced 140.54 points or 0.68% to 20,693.79
  • TSX 60 advanced 8.6 points or 0.7% to 1,237.06

 

Brazil Market Closing:

  • Bovespa declined 1,118.01 points or -0.96% to 115,062.54

 

ENERGY:

 

The oil markets had a green day today:

 

  • Crude Oil increased 2.33 USD/BBL or 3.31% to 72.7900
  • Brent increased 2.16 USD/BBL or 2.93% to 75.7600
  • Natural gas increased 0.308 USD/MMBtu or 5.86% to 5.5680
  • Gasoline increased 0.0449 USD/GAL or 2.07% to 2.2173
  • Heating oil increased 0.0545 USD/GAL or 2.52% to 2.2158

 

The above data was collected around 11:33 EST on Wednesday

 

  • Top commodity gainers: Natural Gas (5.86%) and Crude Oil (3.31%), Brent (2.93%) and Methanol (6.05%)
  • Top commodity losers: Gold (-0.66%), Silver (-0.43%), Lumber (-2.04%), and Steel (-3.09%)

 

The above data was collected around 11:43 EST on Wednesday.

 

BONDS:

 

Japan 0.034%(-1.1bp), US 2’s 0.2131%(+0.00%), US 10’s 1.3090%(+2.54bps); US 30’s 1.8740%(+0.02%),Bunds -0.3080% (+3.2bp), France -0.0220% (+3.7bp), Italy 0.6993% (+5.07bp), Turkey 16.53% (+3bp), Greece 0.7740% (+0.90bp), Portugal 0.235% (+2.8bp); Spain 0.346% (+3.46bp) and UK Gilts 0.7710% (+3.2bp).