Market Talk – January 20, 2023

Asia:

China kept its benchmark lending rates unchanged for a fifth month on Friday, as expected, but analysts say future cuts are possible as the central bank pledges to prop up an economy ravaged by the coronavirus. The one-year loan prime rate — which most new and maturing loans are based on — was left at 3.65%. The five-year LPR, considered a reference rate for mortgages, was held at 4.30%. China last cut both LPRs in August.

Major Asian stock markets had a mixed day today:

  • NIKKEI 225 rose 148.30 points, or 0.56%, to 26,553.53
  • The Shanghai index rose 24.53 points, or 0.76%, to 3,264.81 points.
  • The Hang Seng Index rose 393.67 points, or 1.82%, to 22,044.65.
  • The ASX 200 rose 16.90 points, or 0.23%, to 7,452.20
  • The Kospi Index rose 14.92 points, or 0.63%, to 2,395.26.
  • Sensex shares fell 236.66 points, or -0.39%, to 60,621.77.
  • Nifty50 fell by 80.20 points, or -0.44%, to 18,027.65 points.

Major Asian currency markets had a green day today:

  • AUDUSD rose 0.00498, or 0.72%, to 0.69588
  • NZDUSD rose 0.00706, or 1.10%, to 0.64626
  • USDJPY rose 1.331, or 1.04%, to 129.751
  • USDCNY rose 0.01637, or 0.24%, to 6.78647

Valuable minerals:

  • Gold fell by $6.17/ton ounce. or -0.32% to 1,925.22
  • The price of silver decreased by $0.022/ton. ounces or -0.09% to 23.806

Some economic news from last night:

China:

The base interest rate for the People’s Bank of China (PBoC) loan remains unchanged at 3.65%.

Japan:

Core National Consumer Price Index (YoY) increased (Dec) from 3.7% to 4.0%

New Zealand:

New Zealand Business PMI (Dec) decreased from 47.4 to 47.2

Some economic news from today:

Hong Kong:

CPI (YoY) increased (Dec) from 1.8% to 2.0%

India:

Foreign exchange reserves, the US dollar increased from 561.58 billion to 572.00 billion

Europe/EMEA:

The European Central Bank will not stop at a single 50 basis point hike at its next rate-setting meetings, a CNBC board member said Thursday. The European Central Bank raised interest rates four times throughout 2022, bringing the deposit rate to 2%. The central bank said in December that it would raise interest rates further in 2023 to tackle very high inflation. The inflation rate in December was 9.2 percent in the eurozone, according to preliminary figures. This was the second consecutive monthly decline in price increases across the Eurozone. However, Knot doesn’t think all of the recent data is “encouraging.”

Major European stock markets had a green day:

  • The CAC 40 index rose 44.12 points, or 0.63%, to 6,995.99.
  • The FTSE 100 rose 23.30 points, or 0.30%, to 7,770.59.
  • The DAX 30 rose 113.20 points, or 0.76%, to 15,033.56.

The major European currency markets had a mixed day today:

  • EURUSD rose 0.00159, or 0.15%, to 1.08429
  • GBPUSD fell by 0.00037, or -0.03%, to 1.23853
  • USDCHF rose 0.00594, or 0.65%, to 0.92214

Some economic news from Europe today:

United kingdom:

Core Retail Sales (MoM) decreased (Dec) from -0.3% to -1.1%

Core Retail Sales (YoY) decreased (Dec) from -5.6% to -6.1%

Retail Sales (MoM) decreased (Dec) from -0.5% to -1.0%

Retail Sales Decreased (YoY) (Dec) From -5.7% to -5.8%

Germany:

German PPI (MoM) increased (Dec) from -3.9% to -0.4%

United States / America:

Wall Street saw a steady rally on Friday which closed all major advances in the green. Today marks the end of three-day losing streaks for the S&P 500 and Dow. On a weekly level, the S&P 500 and the Dow broke their two-week streak of positive gains after falling 0.76% and 2.8%, respectively. Meanwhile, Nasdaq posted its third consecutive week of gains, advancing 0.5% for the week.

The US National Association of Realtors reported that home sales fell 1.5% in December on a monthly basis. The seasonally adjusted pace came in at 4.02 million units, down 34% from December 2023 and the slowest pace since November 2010 during the Great Recession. Total sales across the US fell 17.8% in 2022 from the previous year. This is the 11th straight month of declining home sales, due in part to higher mortgage rates, limited inventory and inflated home prices. The median home price in the US is now $366.9000, up 2.3% from 2021.

US market close:

  • The Dow advanced 330.93 points, or 1%, to 33,375.49
  • The S&P 500 advanced 73.76 points, or 1.89%, to 3,972.61.
  • The Nasdaq advanced 288.17 points, or 2.66%, to 11,140.43
  • Russell 2000 advanced 30.99 points, or 1.69%, to 1,867.34.

Canada Market Close:

  • The TSX Composite advanced 161.77 points, or 0.8%, to 20,503.21.
  • TSX 60 advanced 9.42 points, or 0.77%, to 1,235.21

Brazil Market Close:

  • Bovespa fell 881.24 points, or -0.78%, to 112,040.64 points.

energy:

The oil markets had a mixed day today:

  • Crude Oil rose $1.053/BBL, or 1.31%, to 81.663
  • Brent crude rose $1.396/BBL, or 1.62%, to 87.556
  • Natural gas fell $0.0401/MMBtu, or -1.22%, to 3.2349.
  • Gasoline rose $0.0603/gallon, or 2.32%, to 2.6571
  • Heating oil increased $0.102/gallon, or 3.02%, to 3.4779

The above data was collected at approximately 13:02 EST on Friday

  • Top commodity gainers: gasoline (2.32%), heating oil (3.02%), cotton (3.53%) and lean hog (1.85%)
  • The biggest losers in commodities: canola (-1.35%), palladium (-1.62%), zinc (-1.46%) and natural gas (-1.22%).

The above data was collected at approximately 13:11 EST on Friday.

Bonds:

Japan 0.348% (-6.3 bps), US 2’s 4.17% (+0.057%), US 10’s 3.4824% (+8.34 bps); US 30 3.65% (+0.086%), Bund 2.166% (+11.3bp), France 2.614% (+13bp), Italy 3.983% (+22.3bp), Turkey 9.92% (+3bp) Greece 4.129% (+9.7 bp), Portugal 3.058% (+14.9 bp); Spain 3.167% (+14.7 bps) and the United Kingdom 3.365% (+8.7 bps).

Market Talk – January 19, 2023

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