Market Talk – September 29, 2020

ASIA:

Chinese online media firm Sina Corp. is quitting Wall Street as Chinese tech companies come under heightened scrutiny in the United States. The Beijing-based firm is being taken private by its chairman and chief executive, Charles Chao, in a deal that values the company at $2.6 billion, Sina (SINA) said in a statement on Monday. Sina’s deal comes as tensions rise between the United States and China. In recent weeks, the two countries have clashed over US threats and restrictions against Chinese tech firms that have ensnared apps like TikTok and WeChat and chipmaker SMIC.

The Reserve Bank of India (RBI) is expected to keep key rates unchanged this week, but may for the first time since February provide guidance on how the economy is performing amid the coronavirus pandemic. A Reuters pool suggest repo rate to remain unchanged at 4.0% after its policy review on Thursday, and a large majority see no cuts until the January-March quarter. The RBI will then likely stay on hold until the end of 2021. The RBI has so far refrained from providing any forecasts on growth or inflation due to the heightened uncertainty and risk of projections having to be revised frequently.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 27.48 points or 0.12% to 23,539.10
  • Shanghai increased 6.82 points or 0.21% to 3,224.36
  • Hang Seng decreased 200.52 points or -0.85% to 23,275.53
  • ASX 200 decreased 0.20 points or 0.00% to 5,952.10
  • Kospi increased 19.81 points or 0.86% to 2,327.89
  • SENSEX decreased 8.41 points or -0.02% to 37,973.22
  • Nifty50 decreased 5.15 points or -0.05% to 11,222.40

 

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00436 or 0.62% to 0.71292
  • NZDUSD increased 0.00294 or 0.45% to 0.65913
  • USDJPY increased 0.1650 or 0.16% to 105.64
  • USDCNY decreased 0.00218 or -0.03% to 6.81588

 

Precious Metals:

  • Gold increased 17 USD/t oz. or 0.90% to 1,897.85
  • Silver increased 0.503 USD/t. oz or 2.12%% to 24.213

 

Some economic news from last night:

Japan:

Tokyo Core CPI (YoY) (Sep) increased from -0.3% to -0.2%

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

CPI Tokyo Ex Food and Energy (MoM) (Sep) increased from -0.3% to -0.2%

South Korea:

Manufacturing BSI Index (Oct) increased from 68 to 70

Industrial Production (YoY) (Aug) decreased from -2.4% to -3.0%

Industrial Production (MoM) (Aug) decreased from 1.9% to -0.7%

Retail Sales (MoM) increased from -6.0% to 3.0%

Service Sector Output (MoM) (Aug) decreased from 0.3% to -1.0%

EUROPE/EMEA:

The final scheduled round of negotiations for the future trading relationship between the UK and EU commences today (29 September) amid renewed hope that a deal can be reached. This week’s talks have long been touted as pivotal, with both sides previously saying an agreement needs to be secured before the EU leaders’ summit in two weeks’ time. The summit has been positioned as a deadline for the negotiations because European parliaments need to have sufficient time to ratify the final deal before the transition period ends on 31 December 2020.

France’s government presented its 2021 budget on Monday, a plan that aims to rescue the country’s beleaguered economy from the impact of the coronavirus pandemic by injecting a 42 billion-euro (USD 49 billion) stimulus next year. France’s economy is expected to shrunk 10 percent this year, in its worst recession since World War II. Earlier this month, French President Emmanuel Macron’s centrist government unveiled a 100 billion-euro (USD 117 billion) recovery plan aimed at creating jobs and saving struggling businesses. The government hopes the economy will grow 8 percent next year, boosted by the recovery plan.

The major Europe stock markets had a negative day today:

  • CAC 40 decreased 11.20 points or -0.23% to 4,832.07
  • FTSE 100 decreased 30.43 points, or -0.51% to 5,897.50
  • DAX 30 decreased 45.05 points or -0.35% to 12,825.82

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00704 or 0.60% to 1.17408
  • GBPUSD increased 0.00102 or 0.08% to 1.28580
  • USDCHF decreased 0.00466 or -0.50% to 0.91962

 

Some economic news from Europe today:

France:

French Consumer Confidence (Sep) remain the same at 95

Spain:

Spanish CPI (YoY) (Sep) increased from -0.5% to -0.4%

Spanish CPI (MoM) increased from 0.0% to 0.2%

Spanish HICP (MoM) increased from 0.0% to 0.1%

Spanish HICP (YoY) (Sep) remain the same at -0.6%

Spanish Retail Sales (YoY) (Aug) increased from -3.9% to -2.4%

Spanish Business Confidence increased from -10.0 to -9.1

Italy:

Italian PPI (MoM) (Aug) decreased from 0.2% to 0.1%

Italian PPI (YoY) (Aug) increased from -4.2% to -3.0%

Germany:

German CPI (MoM) (Sep) decreased from -0.1% to -0.2%

German CPI (YoY) (Sep)  decreased from 0.0% to -0.2%

German HICP (YoY) (Sep) decreased from -0.1% to -0.4%

German HICP (MoM) (Sep) decreased from -0.2%  to -0.4%

UK:

BoE Consumer Credit (Aug) decreased from 1.100B to 0.300B

M4 Money Supply (MoM) (Aug) decreased from 0.8% to -0.4%

Mortgage Approvals (Aug) increased from 66.30k To 84.70K

Mortgage Lending (Aug) increased from 2.90B to 3.10B

Net Lending to Individuals decreased from 3.9B to 3.4B

Euro Zone:

Business and Consumer Survey (Sep) increased from 87.7 to 91.1

Business Climate (Sep) increased from -1.33 to -1.19

Consumer Confidence (Sep) remain the same at -13.9

Consumer Inflation Expectation (Sep) decreased from 16.9 to 12.5

Selling Price Expectations (Sep) increased from -2.1 to -0.6

Services Sentiment (Sep) increased from -17.2 to -11.1

Industrial Sentiment (Sep) increased from -12.7 to -11.1

US/AMERICAS:

Home prices in the US advanced 4.8% in July, according to the Case-Shiller index. The 10-City Composite increased 3.3%, a 2.8% improvement from the month prior, and the 20-City Composite rose 3.9%, up from 3.5% in June. Phoenix reported the most significant annual gain at 9.2%, followed by Seattle (7%), and Charlotte (6%).

Bankruptcies in New York spiked 40% during the pandemic, according to a new Bloomberg report. Over 610 businesses in New York filed for bankruptcy between March 16 and September 27. Data from Yelp indicates that over 4,000 businesses in the city permanently closed since the coronavirus crisis began in March.

House Democrats revealed a new $2.2 trillion coronavirus stimulus bill. This proposed package would include another direct stimulus payment check to Americans who qualify. Republican Treasury Secretary Mnuchin and Democratic House Speaker Pelosi are said to have had a “positive” discussion about the bill today. The plan would also reinstate the additional $600 unemployment relief benefits through January and provide billions in rental and mortgage assistance.

Amy Coney Barrett was selected by President Donald Trump to replace the late Justice Ruth Ginsberg. “We truly do believe that Judge Barrett represents the best of America, personally, in terms of her great intellect and her great background,” Vice President Pence told reporters. If appointed, Barrett would be the youngest Supreme Court Justice at 48-years-old and could be in the position for life as there is no term limit. If confirmed, the Republicans will

US Market Closings:

  • Dow declined 131.4 points or -0.48% to 27,452.66
  • S&P 500 declined 16.13 points or -0.48% to 3,335.47
  • Nasdaq declined 32.28 points or -0.29% to 11,085.25
  • Russell 2000 declined 5.62 points or -0.37% to 1,504.73

Canada Market Closings:

  • TSX Composite declined 31.29 points or -0.19% to 16,211.52
  • TSX 60 declined 2.8 points or -0.29% to 973.77

Brazil Market Closing:

  • Bovespa declined 1,086.02 points or -1.15% to 93,580.35

ENERGY:

The oil markets had a negative day today:

  • Crude Oil decreased 1.61 USD/BBL or -3.97% to 38.9900
  • Brent decreased 1.66 USD/BBL or -3.91% to 40.7700
  • Natural gas decreased 0.292 USD/MMBtu or -10.43% to 2.5070
  • Gasoline decreased 0.0548 USD/GAL or -4.38% to 1.1962
  • Heating oil decreased 0.0367 USD/GAL or -3.22% to 1.1040
  • Top commodity gainers: Lumber (4.30%), Sugar (3.18%), Orange Juice(3.45%), and Palladium (2.47%)
  • Top commodity losers: Natural Gas (-10.43%), Crude Oil (-3.97%), Brent (-3.91%), and Gasoline (-4.38%)

The above data was collected around 16:30 EST on Tuesday.

BONDS:

Japan 0.03%(+0bp), US 2’s 0.13% (-0bps), US 10’s 0.65%(-1bps);US 30’s 1.42%(-1bps), Bunds -0.53% (-1bp), France -0.26% (-1bp), Italy 0.85% (-3bp), Turkey 13.09% (+8bp), Greece 1.02% (-2bp), Portugal 0.26% (-1bp), Spain 0.25% (+6bp) and UK Gilts 0.18% (-2bp).

 

  • Italian 5-Year BTP Auction decreased from 0.58% to 0.35%
  • Italian 10-Year BTP Auction decreased from 1.11% to 0.89%