Market Talk – September 3, 2021

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ASIA:

BNP Paribas’ asset management arm is in talks to form a wealth management venture with a unit of Agricultural Bank of China (AgBank), as the French firm pursues a bigger slice of China’s $19 trillion market, Reuters reported. China further deregulated its financial markets in 2019, allowing foreign asset managers to form majority-owned wealth management ventures with local banks. Foreign expertise can help Chinese lenders grow their investment capabilities as they phase out risky shadow banking businesses. French rival Amundi and US fund giant BlackRock have already formed Chinese wealth management ventures, while Schroders and Goldman Sachs are following suit. Meanwhile, JPMorgan Asset Management has partnered with China Merchants Bank’s wealth management unit.

India’s gasoline demand is set to hit a record this fiscal year, with consumption accelerating as more people hit the road for business and leisure travel after the easing of COVID-19 curbs. Shunning trains, buses, and planes, safety-conscious Indians are buying more cars and increasingly using personal vehicles to commute as they embark on ‘revenge travel’ — flocking to tourist destinations after months of restrictions, despite record-high fuel prices. Annual passenger vehicle sales in India rose by 45% to 264,442 units in July, driven by pent-up demand, according to data from the Society of Indian Automobile Manufacturers.

 

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 584.60 points or 2.05% to 29,128.11
  • Shanghai decreased 15.31 points or -0.43% to 3,581.73
  • Hang Seng decreased 188.44 or -0.72% to 25,901.99
  • ASX 200 increased 37.20 points or 0.50% to 7,522.90
  • Kospi increased 25.21 points or 0.79% to 3,201.06
  • SENSEX increased 277.41 points or 0.48% to 58,129.95
  • Nifty50 increased 89.45 points or 0.52% to 17,323.60

 

 

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00423 or 0.57% to 0.74415
  • NZDUSD increased 0.00345 or 0.49% to 0.71432
  • USDJPY decreased 0.29 or -0.27% to 109.65
  • USDCNY decreased 0.01199 or -0.19% to 6.43714

 

Precious Metals:

  • Gold increased 19.95 USD/t oz. or 1.10% to 1,829.35
  • Silver increased 0.83 USD/t. oz or 3.47% to 24.709

 

Some economic news from last night:

China:

Caixin Services PMI (Aug) decreased from 54.9 to 46.7

Japan:

Services PMI (Aug) decreased from 47.4 to 42.9

South Korea:

FX Reserves – USD (Aug) increased from 458.68B to 463.93B

Hong Kong:

Manufacturing PMI (Aug) increased from 51.3 to 53.3

Australia:

Retail Sales (MoM) decreased from -1.8% to -2.7%

AIG Construction Index (Aug) decreased from 48.7 to 38.4

Services PMI decreased from 44.2 to 42.9

 

Some economic news from today:

India:

Nikkei Services PMI (Aug) increased from 45.4 to 56.7

FX Reserves, USD increased from 616.90B to 633.56

Singapore:

Retail Sales (MoM) (Jul) decreased from 1.9% to 0.8%

Retail Sales (YoY) (Jul) decreased from 26.0% to 0.2%

 

EUROPE/EMEA:

Britain’s economic recovery from the COVID-19 pandemic lost more momentum last month than originally estimated as staff shortages and supply chain issues weighed on companies in the country’s huge services sector, a survey showed on Friday. The IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) fell to 55.0 in August, revised lower from a preliminary “flash” reading of 55.5, and down sharply from 59.6 in July. Overall, the survey added to signs that British economic growth has slowed somewhat in the last month or so. IHS Markit said consumer demand slowed last month after an initial post-lockdown surge. The composite PMI, which combines the services and manufacturing sectors, fell to 54.8 in August from 59.2 in July.

The major Europe stock markets had a negative day:

  • CAC 40 decreased 73.09 points or -1.08% to 6,689.99
  • FTSE 100 decreased 25.55 points or -0.36% to 7,138.35
  • DAX 30 decreased 59.39 points or -0.37% to 15,781.20

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00059 or 0.05% to 1.18795
  • GBPUSD increased 0.00249 or 0.18% to 1.38595
  • USDCHF decreased 0.00055 or -0.06% to 0.91385

 

Some economic news from Europe today:

France:

French Government Budget Balance (Jul) decreased from -131.3B to -166.6B

French Markit Composite PMI (Aug) decreased from 56.6 to 55.9

French Services PMI (Aug) decreased from 56.8 to 56.3

Spain:

Spanish Services PMI (Aug) decreased from 61.9 to 60.1

Italy:

Italian Composite PMI (Aug) increased from 58.6 to 59.1

Italian Services PMI (Aug) remain the same at 58.0

Germany:

German Composite PMI (Aug) decreased from 62.4 to 60.0

German Services PMI (Aug) decreased from 61.8 to 60.8

Norway:

Unemployment Change (Aug) decreased from 101.76K to 93.91K

Unemployment Rate n.s.a. (Aug) decreased from 3.10% to 2.70%

House Price Index (YoY) (Aug) increased from 8.50% to 9.40%

UK:

Composite PMI (Aug) decreased from 59.2 to 54.8

Services PMI (Aug) decreased from 59.6 to 55.0

Euro Zone:

Markit Composite PMI (Aug) decreased from 60.2 to 59.0

Services PMI (Aug) decreased from 59.8 to 59.0

Retail Sales (MoM) (Jul) decreased from 1.8% to -2.3%

Retail Sales (YoY) (Jul) decreased from 5.4% to 3.1%

US/AMERICAS:

The US Labor Department released a disappointing jobs report for August that fell well beneath analysts’ expectations. The US economy added only 235,000 jobs last month compared to the expected 720,000 – around three times beneath expectations. Leisure and hospitality saw the most notable increase over the past six months after advancing by 350,000 on average. However, hiring in the sector became stagnant in August, with hospitality workers facing an unemployment rate of 9.1%. Professional and business services saw the most notable gains after adding 74,000 jobs. Transportation and warehousing advanced by 53,000 positions, private education by 40,000 positions, and manufacturing by 37,000. The unemployment rate declined by 0.2% from July and now stands at 5.2%.

Wages in the US are on the rise after expanding 0.6% from July to August and 4.3% on an annual basis. Discouraged workers declined from 9.6% in July to 8.9% in August. According to the job application site Indeed, over 10.5 million jobs are available despite the labor shortage. An additional 400,000 unemployed individuals said they would not work due to COVID concerns last month, bringing the number of people who are out of the workforce due to fears of the coronavirus to 5.6 million.

Far-left Democrats are urging President Joe Biden to displace Federal Reserve Chairman Jerome Powell. In a published statement, the group expressed a desire to “re-image a Federal Reserve focused on eliminating climate risk and advancing racial and economic justice.” They cited two main concerns with Powell’s approach for 1) not focusing on climate change and 2) a lack of financial regulations. In response to their sole monetary policy gripe, the group said Powell “substantially weakened many of the reforms enacted in the wake of the Great Recession regulating the largest banks, including capital and liquidity requirements, stress tests, the Volcker Rule and living will requirements.” However, Powell is receiving some support within the Biden Administration, with former Fed chair and current Treasury Secretary Janet Yellen backing his re-election.

US Market Closings:

  • Dow declined 74.73 points or -0.21% to 35,369.09
  • S&P 500 declined 1.52 points or -0.03% to 4,535.43
  • Nasdaq advanced 32.34 points or 0.21% to 15,363.52
  • Russell 2000 declined 11.97 points or -0.52% to 2,292.05

 

Canada Market Closings:

  • TSX Composite advanced 26.31 points or 0.13% to 20,821.43
  • TSX 60 advanced 0.72 of a point or 0.06% to 1,245.66

 

Brazil Market Closing:

  • Bovespa advanced 256.16 points or 0.22% to 116,933.24

 

 

ENERGY:

 

The oil markets had a mixed day today:

 

  • Crude Oil decreased 0.29 USD/BBL or -0.41% to 69.7000
  • Brent decreased 0.08 USD/BBL or -0.11% to 72.9500
  • Natural gas increased 0.039 USD/MMBtu or 0.84% to 4.6800
  • Gasoline decreased 0.0077 USD/GAL or -0.36% to 2.1558
  • Heating oil decreased 0.0093 USD/GAL or -0.43% to 2.1584

 

The above data was collected around 11:47 EST on Friday

 

  • Top commodity gainers: Lumber (4.08%) and Silver (3.47%), Platinum (2.11%) and Steel (1.89%)
  • Top commodity losers: Oat (-5.33%), Coffee (-1.74%), Tin (-1.51%), and Sugar (-1.56%)

 

The above data was collected around 12:00 EST on Friday

 

BONDS:

 

Japan 0.04%(+1bp), US 2’s 0.21%(-0.004%), US 10’s 1.3257%(+4.05bps); US 30’s 1.9468%(+0.05%),Bunds -0.3620% (+2.2bp), France -0.0190% (+1.7bp), Italy 0.7087% (+3.74bp), Turkey 16.45% (+8bp), Greece 0.784% (+4bp), Portugal 0.226% (+2bp); Spain 0.34% (+1.8bp) and UK Gilts 0.7170% (+3.5bp).

Best Regards