Market Talk – November 16, 2022

Asia:

China’s interbank market self-regulatory authority said on Tuesday it will expand bond financing to private companies, including real estate developers, with support from the central bank. The National Association of Financial Market Investment Institutions (NAFMII) said Tuesday that the plan is expected to subsidize about 250 billion yuan ($34.47 billion) in bond financing by private companies and will be expanded further if needed.

Japan looks set to experience a prolonged period of low growth and a weak yen as the US Federal Reserve is expected to continue raising interest rates, likely slowly but to higher levels, among the major central banks in their aggressive monetary tightening. than previously thought. The massive economic stimulus package with a total fiscal spending of 39 trillion yen that was unveiled last month is widely expected to boost the economy at a time when rising energy, raw material and food prices threaten to derail the recovery from the COVID-19 pandemic, although many Economists doubt that this will boost the world’s third largest economy.

Major Asian stock markets had a mixed day today:

  • The NIKKEI 225 increased 38.13 points, or 0.14%, to 28,028.30.
  • The Shanghai index fell 14.10 points, or -0.45%, to 3,119.98 points.
  • The Hang Seng Index fell 86.64 points, or -0.47%, to 18,256.48 points.
  • The Kospi Index fell 2.88 points, or -0.12%, to 2,477.45.
  • The ASX 200 fell 19.40 points, or -0.27%, to 7,122.20
  • SENSEX shares rose 107.73 points, or 0.17%, to 61,980.72.
  • Nifty50 rose 6.25 points, or 0.03%, to 18,409.65

The major Asian currency markets had a mixed day today:

  • AUDUSD fell 0.00246, or -0.36%, to 0.67384
  • NZDUSD fell 0.0004, or -0.06%, to 0.61530
  • USDJPY rose 0.469, or 0.34%, to 139.488
  • USDCNY rose 0.0511, or 0.73%, to 7.09710

Precious metals:

  • Gold decreased by $3.16/ton ounce. or -0.18% to 1,775.09
  • The price of silver decreased by $0.037/ton. ounces or -0.17% to 21.501

Some economic news from last night:

China:

Home Prices Decreased (YoY) (Oct) From -1.5% to -1.6%

Japan:

Third Industry Activity Index (MoM) decreased from 0.7% to -0.4%

Australia

The wage price index (QoQ) increased (Q3) from 0.8% to 1.0%

Europe/EMEA:

Bank of England chief economist Howe Bell said interest rates were likely to rise further because the bank could not secure a victory in its attempt to stem inflation to integrate into the economy. He added that interest rates are likely to rise further to prevent inflation leading to a spiral of higher wages and prices. UK CPI inflation returned to a 40-year high of 10.1% in September on higher food prices and is expected to rise further in October. Thanks to this compromise, last week the bank raised interest rates by the most in 30 years, raising interest rates to 3%.

Senior policymakers at the European Central Bank said they expect interest rates to rise beyond the point at which they curb demand and dampen growth to reduce inflation, rejecting criticism from eurozone policymakers over moves to tighten monetary policy. Comments from several members of the European Central Bank’s rate-setting board reflect the notion that it could take a “dovish stance” and stop raising interest rates soon, echoing a similar message last week from the US central bank. Next month’s decision will depend on whether inflation continues to set new records in the eurozone after reaching 10.7 percent in October, well above the European Central Bank’s target of 2 percent.

Major European stock markets had a negative day:

  • The CAC 40 fell 34.44 points, or -0.52%, to 6,607.22.
  • The FTSE 100 fell 18.25 points, or -0.25%, to 7,351.19
  • The DAX 30 fell 144.48 points, or -1.00%, to 14,234.03.

The major European currency markets had a mixed day today:

  • EURUSD rose 0.00375, or 0.36%, to 1.03850
  • GBPUSD rose 0.00249, or 0.21%, to 1.18967
  • USDCHF fell by 0.00024, or -0.03%, to 0.94386.

Some economic news from Europe today:

United kingdom:

CPI (MoM) increased (Oct) from 0.5% to 2.0%

CPI (YoY) increased (October) from 10.1% to 11.1%

Labor productivity fell from 0.4% to 0.2%

Input PPI (MoM) decreased (Oct) from 0.9% to 0.6%

Italia:

Italian CPI (MoM) increased (Oct) from 0.3% to 3.4%

United States / America:

The Bureau of Labor Statistics reported that wholesale sales inflation in America fell 0.2% in October. This puts the annual rate at an increase of 8%. Excluding energy and food, wholesale costs rose 0.2% compared to 0.3% in the previous month, and up 5.4% for the year.

Although Brainard said Monday that the Fed may begin to slow hikes, Bank of San Francisco President Daley said rate hikes will continue, albeit in a less aggressive form. “A pause is not on the table now. Daly said this Wednesday. Daly believes the Bank will raise interest rates by at least another percentage point and personally believes the appropriate range would be 4.75% to 5.25%. The last four hikes were 0.75 percentage points. Despite promising numbers, inflation remains at 7.7%.

US market close:

  • The Dow fell 39.09 points, or -0.12%, to 33,553.83.
  • The S&P 500 fell 32.94 points, or -0.83%, to 3,958.79.
  • The Nasdaq fell 174.75 points, or -1.54%, to 11,183.66.
  • Russell 2000 fell 36.04 points, or -1.91%, to 1,853.17

Canada market closing:

  • The TSX Composite Index fell 36.82 points, or 19,957.96 points
  • The TSX 60 fell 0.45 points, or -0.04%, to 1,210.17.

Brazil Market Close:

  • Bovespa fell 2,917.95 points, or -2.58%, to 110,243.33 points.

energy:

Oil markets had a negative day today:

  • Crude Oil fell $1.529/BBL, or -1.76%, to 85.391
  • Brent fell $1.529/BBL, or -1.63%, to 92.331.
  • Natural gas fell $0.1566/MMBtu, or -2.60%, to 5.8774.
  • Gasoline fell $0.0363/gallon, or -1.44%, to 2.4798
  • Heating oil fell $0.0478/gallon, or -1.31%, to 3.5935

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

  • Top gainers in commodities: steel (2.38%), cotton (0.75%), orange juice (2.73%) and cheese (0.34%)
  • The biggest losers in commodities: Butter (-2.19%), Bitumen (-9.69%), Wood (-4.84%) and Natural Gas (-2.60%).

The above data was collected at approximately 13:09 EST on Wednesday.

Bonds:

Japan 0.250% (+0.2bp), US 2’s 4.36% (+0.002%), US 10’s 3.7176% (-8.14bp); US 30 3.90% (-0.086%), Bund 1.986% (-11.2 bps), France 2.464% (-14.3 bps), Italy 3.926% (-13.4 bps), Turkey 11.58% (+0 bps) , Greece 4.257% (-1.2 basis points), Portugal 2.99% (-8.2 basis points); Spain 3.031% (-11.3 basis points) and British Bonds 3.152% (-13.9 basis points).

Market Talk – November 15, 2022

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