Market Talk – September 17, 2020

ASIA:

US President Donald Trump raised questions on Wednesday about plans by China’s ByteDance to keep a majority stake in the U.S. operations of popular social media platform TikTok after six Republican lawmakers urged him to reject the proposal. Trump said he would be briefed on Thursday about a proposal that calls for Oracle Corp to become a “trusted technology provider” for TikTok’s U.S. operations, but he did not favor the idea of having the Chinese firm retain control.

Some high-frequency indicators are pointing towards stabilization in economic activity in India but the recovery is still not entrenched and will only be gradual, Reserve Bank of India Governor Shakti anta Das said on Wednesday. Despite India seeing one of the strictest lockdowns in the world, the country has crossed 5 million COVID-19 infections, and has the world’s second-highest number of cases.

Walmart Inc-controlled Indian e-commerce firm Flipkart is preparing for an initial public offering overseas as early as 2021, which could value the firm up to $50 billion, sources familiar with the company’s plans told Reuters. If achieved, that would mean Walmart would have more than doubled its investment.

The major Asian stock markets had a negative day today:

  • NIKKEI 225 decreased 156.16 points or -0.67% to 23,319.37
  • Shanghai decreased 13.49 points or -0.41% to 3,270.44
  • Hang Seng decreased 384.78 points or -1.56% to 24,340.85
  • ASX 200 decreased 72.90 points or -1.22% to 5,883.20
  • Kospi decreased 29.75 points or -1.22% to 2,406.17
  • SENSEX decreased 323.00 points or -0.82% to 38,979.85
  • Nifty50 decreased 88.45 points or -0.76% to 11,516.10

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.0016 or -0.22% to 0.72853
  • NZDUSD increased 0.00055 or 0.08% to 0.67319
  • USDJPY decreased 0.26 or -0.25% to 104.76
  • USDCNY increased 0.01558 or 0.23% to 6.76376

Precious Metals:

  • Gold decreased 14.37 USD/t oz. or -0.73% to 1,944.95
  • Silver decreased 0.35 USD/t. oz or -1.29% to 26.880

Some economic news from last night:

Japan:

Foreign Bonds Buying decreased from 377.7B to 300.1B

Foreign Investments in Japanese Stocks decreased from 11.5B to -896.0B

Australia:

Employment Change (Aug) decreased from 114.7K to 111.0K

Full Employment Change (Aug) decreased from 43.5K to 36.2K

Participation Rate (Aug) increased from 64.7% to 64.8%

Unemployment Rate (Aug) decreased from 7.5% to 6.8%

New Zealand:

RBNZ Offshore Holdings (Aug) decreased from 43.30% to 41.90%

GDP (QoQ) (Q2) decreased from -1.4% to -12.2%

GDP (YoY) (Q2) decreased from -0.1% to -12.4%

GDP Annual Average (Q2) decreased from 1.5% to -2.0%

GDP Expenditure (QoQ) (Q2) decreased from -1.3% to -9.8%

Singapore:

Non-Oil Exports (YoY) (Aug) increased from 5.90% to 7.70%

Non-Oil Exports (MoM) (Aug) increased from 1.20% to 10.50%

Trade Balance increased from 3.300B to 5.800B

Some economic news from today:

Japan:

BoJ Interest Rate Decision remain the same at -0.10%

Hong Kong:

Unemployment Rate (Aug) remain the same at 6.1%

Indonesia:

Loans (YoY) (Aug) decreased from 1.53% to 1.04%

Deposit Facility Rate (Sep) remain the same at 3.25%

Lending Facility Rate (Sep) remain the same at 4.75%

Interest Rate Decision remain the same at 4.00%

EUROPE/EMEA:

The head of the European Commission said on Wednesday the chances of reaching a trade deal with Britain were fading by the day as the British government pushes ahead with moves that would breach their divorce treaty. The British government announced draft legislation last week which it acknowledges would violate its international legal obligations and undercut parts of the divorce deal it signed before Britain formally left the European Union in January.

The major Europe stock markets had a negative day:

  • CAC 40 decreased 34.92 points or -0.69% to 5,039.50
  • FTSE 100 decreased 28.56 points or -0.47% to 6,049.92
  • DAX 30 decreased 47.25 points or -0.36% to 13,208.12

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00161 or 0.14% to 1.18238
  • GBPUSD decreased 0.00146 or -0.11% to 1.29482
  • USDCHF decreased 0.00056 or -0.06% to 0.90974

Some economic news from Europe today:

UK:

Car Registration (MoM) (Aug) decreased from 618.0% to -50.1%

Car Registration (YoY) (Aug) increased from -34.9% to -5.8%

BoE MPC vote cut (Sep) remain the same at 0

BoE MPC vote hike (Sep) remain the same at 0

BoE MPC vote unchanged (Sep) remain the same at 9

BoE QE Total (Sep) remain the same at 745B

BoE Interest Rate Decision (Sep) remain the same at 0.10%

Italy:

Italian Car Registration (MoM) (Aug) decreased from 32.8% to -35.0%

Italian Car Registration (YoY) (Aug) increased from -23.1% to -0.4%

Italian Trade Balance (Jul) increased from 6.228B to 9.694B

Italian Trade Balance EU (Jul) increased from 1.55B to 3.01B

Swiss:

Trade Balance (Aug) increased from 3.341B to 3.583B

Germany:

German Car Registration (YoY) (Aug) increased from -32.3% to -20.0%

German Car Registration (MoM) (Aug) decreased from 31.0% to -20.3%

France:

French Car Registration (MoM) (Aug) decreased from 142.8% to -42.1%

French Car Registration (YoY) (Aug) decreased from 1.2% to -19.8%

Euro Zone:

Construction Output (MoM) (Jul) decreased from 5.14% to 0.19%

Core CPI (YoY) (Aug) decreased from 1.2% to 0.4%

Core CPI (MoM) (Aug) decreased from -0.3% to -0.6%

CPI (YoY) (Aug) decreased from 0.4% to -0.2%

CPI (MoM) (Aug) remain the same at -0.4%

CPI ex Tobacco (YoY) (Aug) decreased from 0.2% to -0.3%

CPI ex Tobacco (MoM) (Aug) remain the same at -0.4%

HICP ex Energy & Food (YoY) (Aug) decreased from 1.3% to 0.6%

HICP ex Energy and Food (MoM) (Aug) decreased from -0.3% to -0.5%

US/AMERICAS:

President Trump is promoting a second round of stimulus checks. “Go for the much higher numbers, Republicans, it all comes back to the USA anyway (one way or another!)” the president tweeted. Both Democrats and Republican lawmakers have been hesitant about providing an additional direct stimulus check to families struggling from the coronavirus shutdown. Secretary Mnuchin has supported the president’s desire to send out a second round of stimulus checks, urging lawmakers not to focus on the federal deficit at this time.

According to the US weekly jobless claim by the Labor Department, the number filing fell by 33,000 to 860,000 on a seasonally adjusted basis. Reuters analysts had anticipated a rate of 850,000, signaling a slower than expected recovery. The data from the previous week was adjusted higher to reflect an additional 9,000 unemployment applications. Nearly 30 million Americans were unemployed at the end of August.

Canada’s job market improved in August after the economy added 246,000 new jobs, according to Statistics Canada. The number reflects a 40,000-position increase from July. August’s unemployment rate fell to 10.2% compared to 10.9% the month prior.

Carolyn Wilkins, Bank of Canada deputy, announced this Thursday that she will not run for a second term. “It has been a great honor and privilege to serve Canadians in this role, and throughout my 20 years at the Bank,” Senior Deputy Governor Wilkins noted. The central bank will begin to search for her successor as her official term ends on May 1, 2021.

US Market Closings:

  • Dow declined 130.4 points or -0.47% to 27,901.98
  • S&P 500 declined 28.48 points or -0.84% to 3,357.01
  • Nasdaq declined 140.19 points or -1.27% to 10,910.28
  • Russell 2000 declined 9.73 points or -0.63% to 1,542.6

Canada Market Closings:

  • TSX Composite declined 48.94 points or -0.3% to 16,246.72
  • TSX 60 declined 3.42 points or -0.35% to 970.37

Brazil Market Closing:

  • Bovespa advanced 422.15 points or 0.4% to 100,097.83

ENERGY:

The oil markets had a mixed day today:

  • Crude Oil increased 0.77 USD/BBL or 1.92% to 40.9300
  • Brent increased 1.09 USD/BBL or 2.58% to 43.3100
  • Natural gas decreased 0.244 USD/MMBtu or -10.80% to 2.0150
  • Gasoline increased 0.027 USD/GAL or 2.26% to 1.2222
  • Heating oil increased 0.0434 USD/GAL or 3.89% to 1.1598

The above data was collected around 12:48 EST on Thursday.

  • Top commodity gainers: Heating Oil (3.89%), Ethanol (18.18%), Lean Hogs (2.64%), and Copper (4.05%)
  • Top commodity losers: Natural Gas (-10.80%), Palladium (-3.65%), Platinum (-3.95%), and Lumber (-2.80%)

The above data was collected around 12:25 EST on Thursday.

BONDS:

Japan 0.01%(-1bp), US 2’s 0.13% (-1bps), US 10’s 0.68%(-2bps); US 30’s 1.43%(-3bps), Bunds -0.51% (-3bp), France -0.24% (-2bp), Italy 0.95% (-0bp), Turkey 13.24% (+27bp), Greece 0.98% (-7bp), Portugal 0.27% (-1bp); Spain 0.23% (+3bp) and UK Gilts 0.17% (-3bp).

 

  • US 4-Week Bill Auction decreased from 0.090% to 0.080%
  • US 8-Week Bill Auction decreased from 0.105% to 0.095%
  • Spanish 3-Year Bonos Auction decreased from -0.392% to -0.449%
  • Spanish 30-Year Obligacion Auction decreased from 1.205% to 1.091%
  • French 3-Year BTAN Auction decreased from -0.58% to -0.64%
  • French 5-Year BTAN Auction decreased from -0.45% to -0.53%