Market Talk – September 12, 2022

Asia:

The Biden administration plans to expand restrictions on US shipments to China of semiconductors used in artificial intelligence and chip-making tools next month, Reuters reported. Informed sources said the Commerce Department plans to publish new regulations based on the restrictions announced earlier this year in letters to three US companies – KLA Corp, Lam Research Corp and Applied Materials Inc. The rules will also codify restrictions in Commerce Department letters sent last month to Nvidia Corp and Advanced Micro Devices ordering them to halt shipments of many AI computer chips to China unless they obtain licenses. Some sources said the regulations are likely to include additional measures against China. Restrictions can also change, and rules can be published later than expected.

Five exporters told Reuters on Friday that rice loading had stopped at Indian ports and nearly 1 million tons of grain was stuck there as buyers refuse to pay the government’s new export tax of 20 percent on top of the agreed contract price. India on Thursday banned exports of broken rice and imposed a 20% tariff on exports of various other types, as the world’s top grain exporter tries to boost domestic supplies and cool prices after below-average monsoon rains limited farming. India ships around 2 million tons of rice per month, with a large amount being loaded from eastern ports such as Kakinada and Visakhapatnam in Andhra Pradesh.

Major Asian stock markets had a green day today:

  • The NIKKEI 225 increased 327.36 points, or 1.16%, to 28542.11
  • Shanghai is closed
  • Close Hang Seng
  • Cosby closed
  • The ASX 200 rose 70.30 points, or 1.02%, to 6,964.50
  • The SENSEX Index rose 321.99 points, or 0.54%, to 60,115.13 points
  • Nifty50 rose 103.00 points or 0.58% to 17,936.35

The major Asian currency markets had a mixed day today:

  • AUDUSD rose 0.00500 or 0.73% to 0.68931
  • NZDUSD rose 0.00400 or 0.66% to 0.61532
  • USDJPY fell 0.138 or -0.10% to 142.418
  • USDCNY fell 0.02380 or -0.34% to 6.91244

Precious metals:

Gold rose by $13.05/ton per ounce. or 0.76% to 1,729.10

Silver rose 1.064 dollars / ton. ounces or 5.66% to 19.842

Some economic news from last night:

New Zealand:

Increasing outbound migration and visitors (July) from 83.50% to 344.20%

Permanent/Long Term Migration (July) increased from -389 to -376

Visitor arrivals (monthly) increased from 30.1% to 41.8%

Some economic news of the day:

Japan:

Machine tool orders increased (YoY) from 5.5% to 10.7%

India:

CPI (YoY) (August) increased from 6.71% to 7.00%

Cumulative industrial production (July) fell from 12.70% to 10.00%

Industrial Production (YoY) down (July) from 12.3% to 2.4%

Manufacturing Output (MoM) (July) decreased from 12.5% ​​to 3.2%

Europe/Europe, Middle East and Africa:

A Reuters poll showed on Monday that the Russian Central Bank is expected to cut its key interest rate by 50 basis points to 7.5% on Friday to encourage lending as inflation continues to slow. The bank is gradually backing away from the emergency rate hike to 20% in late February, which followed Russia’s February 24 move to send tens of thousands of troops to Ukraine and in response to ever-increasing Western sanctions. Twenty of 23 analysts and economists polled by Reuters on Monday expected Russia to cut its benchmark price by another 50 basis points on Friday. Last week’s data showed year-on-year inflation in Russia slowed to 14.3% in August, while consumer prices fell for the ninth consecutive week, thanks in part to a seasonal fall in fruit and vegetable prices. Inflation remains well above the central bank’s 4% target, but has fallen from 20-year highs shortly after Moscow sent troops into Ukraine.

A draft EU plan showed on Monday that fossil fuel companies may have to share excess profits to help European households and industry deal with soaring energy bills, as the cost of an “energy war” between the West and Russia rises. A draft European Commission proposal due to be unveiled this week will see the 27 EU countries make a “solidarity contribution” to the fossil fuel industry. Oil, gas, coal and refining companies will have to make a financial contribution based on tax surplus profits made in the 2022 fiscal year, according to the proposal, which can still be changed and will then have to be approved by EU governments.

Major European stock markets had a green day:

  • The CAC 40 Index rose 121.26 points, or 1.95%, to 6,333.59 points
  • The FTSE 100 rose 121.96 points, or 1.66%, to 7,473.03 points
  • The DAX 30 rose 314.06 points, or 2.40%, to 13,402.27

The major European currency markets had a mixed day today:

  • EURUSD rose 0.00882 or 0.88% to 1.01332
  • The British pound rose against the US dollar by 0.01086 or 0.94% to 1.16974
  • USDCHF fell 0.00722 or -0.75% to 0.95268

Some economic news from Europe today:

United kingdom:

GDP (MoM) increased from -0.6% to 0.2%

Industrial Production (MoM) (July) increased from -0.9% to -0.3%

Industrial Production (MoM) (July) increased from -1.6% to 0.1%

3-month/3-month GDP monthly change increased from -0.1% to 0.0%

Trade Balance (July) increased from -22.85 billion to -19.36 billion

Trade balance outside the EU (July) increased from -12.29 billion to -10.19 billion

Italia:

Italian Industrial Production Down (YoY) (July) from -1.1% to -1.4%

Italian Industrial Production (MoM) (July) increased from -2.0% to 0.4%

Germany:

German current account balance (July) decreased from 14.3 billion to 5.0 billion

United States / America:

The August survey of consumer expectations released by the Federal Reserve in New York today showed that Americans are becoming more optimistic about inflation. People now expect inflation to fall to 5.7% in one year, compared to a 6.2% forecast in July. This indicates the highest level of confidence in low inflation since October 2021. However, it is still well above the Fed’s target. People think inflation will be 2.8%, closer to the 2% target, within three years.

The Department of Justice is cracking down on short selling of many blue-chip stocks. The Department of Justice has summoned several companies such as Amazon, Microsoft and JPMorgan Chase to learn more about their trading information and whether the practices comply with regulations. The Department of Justice and the Securities and Exchange Commission may require a large investor to disclose their short positions in the future.

US market closing:

  • The Dow advanced 229.63 points, or 0.71%, to 3,2381.34 points
  • The S&P 500 advances 43.05 points, or 1.08%, to 4110.41
  • Nasdaq advanced 154.1 points, or 1.27%, to 12,266.41
  • Russell 2000 advanced 23.24 points or 1.23% to 1906.09 points

Canada market closing:

  • Composite TSX advances 213.89 points, or 1.08%, to 19987.23
  • TSX 60 advances 11.58 points, or 0.97%, to 1207.79

Brazil market closing:

  • Bovespa advances 1106.14 points or 0.98% to 113406.55

energy:

Oil markets had a green day today:

Crude Oil rose $0.99/BBL or 1.14% to 87.780

Brent rose $0.996/BBL, or 1.07%, to 93.836

Natural gas rose $0.2622/MMBtu or 3.28% to 8.2582

Gasoline rose $0.0085/gallon, or 0.35%, to 2.4416

Heating oil increased $0.0503/gallon or 1.41% to 3.6290

The above data was collected around 14:06 EST on Monday

Top Commodity Gainers: Silver (5.66%), Oats (4.08%), Wood (7.07%), Soybeans (4.58%)

Biggest losers in commodities: coffee (-0.85%), wheat (-1.58%), high-quality steel (-1.83%) and lean pork (-1.24%)

The above data was collected at around 14:17 EST on Monday

Bonds:

Japan 0.245% (-0.5 basis points), US 2 by 3.56% (-0.010%), US$10 3.3539% (+3.29 basis points); US 30 3.50% (+0.047%), Bond 1.645% (-5.5bp), France 2.223% (-4bp), Italy 3.955% (-5bp), Turkey 11.11% (-5bp) , Greece 4.215% (-4.4 basis points), Portugal 2.711% (-6.4 basis points); Spain 2.834% (-3.2 basis points) and the UK 3.0820% (-1.3 basis points) bonds.

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