Market Talk – September 9, 2021

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ASIA:

China’s GDP grew by 7.9% year on year in the second quarter of 2021, which was lower than the Caixin survey of economists that showed the median estimate for the second quarter was 8.2% growth. Chinese economists broadly agree that China’s potential growth rate is 6%. So, taking into consideration the base effect, China’s year-on-year growth rate in the four quarters of 2021 should be 19.1%, 8.3%, 6.7%, and 5.5%. Yet, in the first quarter, growth amounted to 18.3%. This weaker-than-expected performance is, to a significant extent, a result of official policy. While Chinese authorities implemented expansionary fiscal and monetary policy early in the pandemic, they proved eager to normalize it for fear that it would fuel inflation and compound financial risks. China’s general government expenditures increased by only 4.5%, while revenues increased by 21.8%.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 173.02 points or -0.57% to 30,008.19
  • Shanghai increased 17.94 points or 0.49% to 3,693.13
  • Hang Seng decreased 604.93 or -2.30% to 25,716.00
  • ASX 200 decreased 142.50 points or -1.90% to 7,369.50
  • Kospi decreased 48.29 points or -1.53% to 3,114.70
  • SENSEX increased 54.81 points or 0.09% to 58,305.07
  • Nifty50 increased 15.75 points or 0.09% to 17,369.25

 

 

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00163 or 0.22% to 0.73798
  • NZDUSD increased 0.00259 or 0.36% to 0.71245
  • USDJPY decreased 0.47 or -0.42% to 109.77
  • USDCNY decreased 0.00765 or -0.12% to 6.44938

 

Precious Metals:

  • Gold increased 3.19 USD/t oz. or 0.18% to 1,792.12
  • Silver increased 0.09 USD/t. oz or 0.38% to 24.050

 

Some economic news from last night:

China:

CPI (MoM) (Aug) decreased from 0.3% to 0.1%

CPI (YoY) (Aug) decreased from 1.0% to 0.8%

PPI (YoY) (Aug) increased from 9.0% to 9.5%

Japan:

Foreign Bonds Buying increased from -546.9B to 1,043.1B

Foreign Investments in Japanese Stocks increased from 24.1B to 421.6B

M3 Money Supply (Aug) increased from 1,992.2T to 1,996.3T

New Zealand:

Manufacturing Sales Volume (QoQ) (Q2) decreased from 0.4% to -0.1%

 

Some economic news from today:

India:

M3 Money Supply decreased from 10.5% to 9.5%

Japan:

Machine Tool Orders (YoY) decreased from 93.4% to 86.2%

Indonesia:

Retail Sales (YoY) (Jul) decreased from 2.5% to -2.9%

 

EUROPE/EMEA:

The European Central Bank kept its monetary policy unchanged on Thursday but opted to slow down the pace of net asset purchases under its pandemic emergency purchase program. The Governing Council voted to maintain the interest rate on the ECB’s main refinancing operations at 0%, the marginal lending facility at 0.25%, and the deposit facility at -0.5%. Markets eagerly awaited the Frankfurt institution’s latest policy decision for signs of an imminent unwinding of pandemic-era stimulus amid surging inflation and strong economic growth. The euro gained 0.2% against the dollar following the decision to trade at around $1.1837, while European stocks pared earlier losses.

The major Europe stock markets had a mixed day:

  • CAC 40 increased 15.83 points or 0.24% to 6,684.72
  • FTSE 100 decreased 71.32 points or -1.01% to 7,024.21
  • DAX 30 increased 12.87 points or 0.08% to 15,623.15

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00075 or 0.06% to 1.18257
  • GBPUSD increased 0.00868 or 0.63% to 1.38519
  • USDCHF decreased 0.00444 or -0.48% to 0.91749

 

Some economic news from Europe today:

Germany:

Germany Thomson Reuters IPSOS PCSI (Sep) decreased from 58.34 to 55.14

Gemran Current Account Balance n.s.a (Jul) decreased from 22.5B to 17.6B

German Exports (MoM) (Jul) decreased from 1.3% to 0.5%

German Imports (MoM) (Jul) decreased from 0.6% to -3.8%

German Trade Balance (Jul) increased from 13.6B to 17.9B

UK:

Thomson Reuters IPSOS PCSI (Sep) decrease from 55.3 to 54.1

RICS House Price Balance (Aug) decreased from 77% to 73%

Italy:

Italy Thomson Reuters IPSOS PCSI (Sep) increased from 46.09 to 48.31

France:

France Thomson Reuters IPSOS PCSI (Sep) increased from 47.34 to 49.03

Euro Zone:

Deposit Facility Rate (Aug) remain the same at -0.50%

ECB Marginal Lending Facility remain the same at 0.25%

ECB Interest Rate Decision (Aug) remain the same at 0.00%

US/AMERICAS:

Shares of drugmaker Moderna spiked during early trading after the company announced plans for a booster shot that would protect against the coronavirus as well as the flu. The vaccine would consist of one dosage, but it is unclear how long the effects will last. CEO Stéphane Bancel also announced that Moderna is using mRNA technology to develop cancer treatments and is currently enrolling patients in clinical test trials. We believe this is just the beginning of a new age of information-based medicines,” Bancel stated. Since launching their vaccine in December 2020, over 147 million doses have been distributed in the US alone.

Weekly jobless claims in the US reached a new pandemic low last week, according to the Labor Department. First-time filings during the week ending on September 4 totaled 310,000, marking the lowest number of first-time filers since the coronavirus took hold of the global economy. This figure is likely to be revised as Hurricane Ida has left hundreds of thousands without power. Continuing claims declined by 22,000 to 2.78 million, but still landed about analysts’ estimates. This also marks a low since the March 14, 2020, coronavirus panic. Total recipients of unemployment benefits declined by 255,757 to 11.93 after the federal enhanced employment benefits ceased on Monday. During the same time period last year, unemployment program recipients totaled 30.4 million, showing a positive recovery in the US workforce.

US Market Closings:

  • Dow declined 151.69 points or -0.43% to 34,879.38
  • S&P 500 declined 20.79 points or -0.46% to 4,493.28
  • Nasdaq declined 38.38 points or -0.25% to 15,248.25
  • Russell 2000 declined -0.6% to -0.03% to 2,249.13

 

Canada Market Closings:

  • TSX Composite declined 36.52 points or -0.18% to 20,705.27
  • TSX 60 declined 2.96 points or -0.24% to 1,239.63

 

Brazil Market Closing:

  • Bovespa advanced 1,948.02 points or 1.72% to 115,360.86

 

ENERGY:

 

The oil markets had a mixed day today:

 

  • Crude Oil decreased 0.12 USD/BBL or -0.17% to 69.1800
  • Brent decreased 0.14 USD/BBL or -0.19% to 72.4600
  • Natural gas increased 0.035 USD/MMBtu or 0.71% to 4.9490
  • Gasoline decreased 0.0041 USD/GAL or -0.19% to 2.1280
  • Heating oil decreased 0.0041 USD/GAL or -0.19% to 2.1323

 

The above data was collected around 12:13 EST on Thursday

 

  • Top commodity gainers: Steel (2.99%) and Bitumen (2.02%), Tin (1.77%) and Aluminum (1.67%)
  • Top commodity losers: Palm Oil (-1.94%), Rubber (-1.91%), Oat (-3.03%), and Wheat (-2.04%)

 

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

 

BONDS:

 

Japan 0.04%(-0.40bp), US 2’s 0.22%(-0.002%), US 10’s 1.3190%(-1.69bps); US 30’s 1.9324%(-0.02%),Bunds -0.3610% (-4.1bp), France -0.0360% (-5.6bp), Italy 0.6731% (-8.51bp), Turkey 16.70% (+7bp), Greece 0.813% (-4.50bp), Portugal 0.225% (-3.40bp); Spain 0.316% (-6bp) and UK Gilts 0.7340% (-1.10bp).