Market Talk – October 6, 2021


ASIA:

The US plans to launch new trade talks with China, but will maintain tariffs on Chinese imports as it presses Beijing to fulfill pledges to buy more US goods and services, according to Biden administration officials. The Biden administration will directly engage with Beijing in the coming days to enforce commitments in their trade deal and start a new process to exclude certain products from US tariffs in an effort to help American workers and businesses. While the Biden administration won’t take any tools off the table when dealing with Beijing, it doesn’t intend to escalate the trade tensions, an administration official said in a call with reporters. The official acknowledged that China may not change its practices and therefore the US needs a strategy that takes that into account.

Ratings agency Moody’s Investors Service on Tuesday upgraded its outlook on India to stable from negative, saying downside risks in Asia’s third largest economy and its financial institutions have reduced. Moody’s affirmed India’s sovereign credit rating at Baa3. Moody’s said India’s decision to keep the financial institutions flush with liquidity also reduced the risk to the country from the financial sector. The Indian economy has shown signs of a strong rebound after a second wave of COVID-19 infection killed thousands of people in April and May.

 

The major Asian stock markets had a negative day today:

  • NIKKEI 225 decreased 293.25 or -1.05% to 27,528.87
  • Shanghai closed
  • Hang Seng decreased 137.66 or -0.57% to 23,966.49
  • ASX 200 decreased 41.90 points or -0.58% to 7,206.50
  • Kospi decreased 53.86 points or -1.82% to 2,908.31
  • SENSEX decreased 555.15 points or -0.93% to 59,189.73
  • Nifty50 decreased 176.30 points or -0.99% to 17,646.00

 

 

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00426 or -0.58% to 0.72448
  • NZDUSD decreased 0.00509 or -0.73% to 0.69047
  • USDJPY decreased 0.14 or -0.12% to 111.37
  • USDCNY increased 0.01476 or 0.23% to 6.46323

 

Precious Metals:

  • Gold decreased 2.43 USD/t oz. or -0.14% to 1,757.53
  • Silver decreased 0.299 USD/t. oz or -1.32% to 22.361

 

Some economic news from last night:

Hong Kong:

Manufacturing PMI (Sep) decreased from 53.3 to 51.7

South Korea:

FX Reserves – USD (Sep) increased from 463.93B to 463.97B

CPI (YoY) (Sep) decreased from 2.6% to 2.5%

CPI (MoM) (Sep) decreased from 0.6% to 0.5%

New Zealand:

RBNZ Interest Rate Decision increased from 0.25% to 0.50%

 

Some economic news from today:

India:

M3 Money Supply decreased from 9.4% to 9.3%

 

EUROPE/EMEA:

Britain’s inflation rate hit 3.2% in August, its highest in almost a decade. Some one-off factors accounted for the record jump from July but the BoE thinks inflation is heading above 4%, more than double its 2% target. The BoE is watching for any signs that consumers are losing confidence that inflation will be contained in the longer run. The shortage of workers, something seen in other economies around the world, has worsened since Britain decided to leave the European Union and end the free movement of workers from the bloc. But Prime Minister Boris Johnson denied on Tuesday that Britain was in crisis and said its “natural ability to sort out its logistics and supply chains is very strong.”

The major Europe stock markets had a negative day:

  • CAC 40 decreased 83.16 points or 1.27% to 6,493.12
  • FTSE 100 decreased 81.23 points or -1.15% to 6,995.87
  • DAX 30 decreased 221.16 points or -1.46% to 14,973.33

 

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00623 or -0.54% to 1.15339
  • GBPUSD decreased 0.00697 or -0.51% to 1.35560
  • USDCHF increased 0.0004 or 0.04% to 0.92876

 

Some economic news from Europe today:

Spain:

Spanish Industrial Production (YoY) (Aug) decreased from 3.3% to 1.8%

Germany:

German Factory Orders (MoM) (Aug) decreased from 4.9% to -7.7%

IHS Markit Construction PMI (Sep) increased from 44.6 to 47.1

Euro Zone:

Retail Sales (YoY) (Aug) decreased from 3.1% to 0.0%

Retail Sales (MoM) (Aug) increased from -2.6% to 0.3%

UK:

Construction PMI (Sep) decreased from 55.2 to 52.6

Housing Equity Withdrawal (QoQ) increased from 6.1B to 7.2B

US/AMERICAS:

Job hirings in the US surpassed expectations this September, according to the ADP. Private sector positions advanced by 568,000 compared to estimates of 425,000. August’s reading was revised down to 340,000 compared to 374,000. The fragile leisure and hospitality sector saw the most notable gains with 226,000 new hires. The sector remains muted from the pandemic with an unemployment rate above 9% and nearly 2 million unfilled job openings. The Labor Department will release their detailed nonfarm payrolls data on Friday, and economists are anticipating a strong report after August’s disappointing slowdown of 235,000 hires.

Defense Secretary Lloyd Austin warned the public that defaulting on debt will threaten US national security. “It would also seriously harm our service members and their families because, as Secretary, I would have no authority or ability to ensure that our service members, civilians, or contractors would be paid in full or on time,” Austin stated. A default would threaten the benefits paid out to 2.4 million military retirees as well as 400,000 combat survivors. A bipartisan group of former defense chiefs issued a similar warning, stating. “We should not ask our all-volunteer military to serve our nation without pay. If we do that, we will not have a highly capable military to fight and win the nation’s wars.”

Prime Minister Justin Trudeau has plans to impose a vaccine mandate in Canada for all domestic and foreign travelers over the age of 12. “By the end of November, if you’re 12 or older and want to fly or take the train, you’ll have to be fully vaccinated,” said Trudeau, noting that “testing will no longer be an option before boarding a train or a flight,” Trudeau toted. Additionally, all federal employees must be vaccinated by October 29 or they will risk being put on leave without pay as early as November 15. The Trudeau Administration will soon announce a mandate for Canadian Armed Forces as well. “These travel measures, along with mandatory vaccination for federal employees, are some of the strongest in the world,” the prime minister admitted.

US Market Closings:

  • Dow advanced 102.32 points or 0.3% to 34,416.99
  • S&P 500 advanced 17.83 points or 0.41% to 4,363.55
  • Nasdaq advanced 68.08 points or 0.47% to 14,501.91
  • Russell 2000 declined 13.36 points or -0.6% to 2,215.00

 

Canada Market Closings:

  • TSX Composite advanced 8.23 points or 0.04% to 20,191.66
  • TSX 60 advanced 1.7 points or 0.14% to 1,213.09

 

Brazil Market Closing:

  • Bovespa advanced 101.93 points or 0.09% to 110,559.57

 

ENERGY:

 

The oil markets had a negative day today:

 

  • Crude Oil decreased 1.39 USD/BBL or -1.76% to 77.5400
  • Brent decreased 1.42 USD/BBL or -1.72% to 81.1400
  • Natural gas decreased 0.474 USD/MMBtu or -7.51% to 5.8380
  • Gasoline decreased 0.0505 USD/GAL or -2.15% to 2.3003
  • Heating oil decreased 0.0412 USD/GAL or -1.65% to 2.4524

 

The above data was collected around 11:35 EST on Wednesday

 

  • Top commodity gainers: Platinum (1.16%) and Rhodium (1.49%), Rubber (1.34%) and Palm Oil (2.81%)
  • Top commodity losers: Palladium (-2.25%), Natural Gas (-7.51%), Gasoline (-2.15%), and Crude Oil (-1.76%)

 

The above data was collected around 11:45 EST on Wednesday.

 

 

BONDS:

 

Japan 0.078%(+2.4bp), US 2’s 0.3015%(+0.02%), US 10’s 1.5119%(-1.56bps); US 30’s 2.0590%(-0.04%),Bunds -0.1850% (+0.3bp), France 0.1670% (+0.5bp), Italy 0.8926% (+3.1bp), Turkey 17.91% (+11bp), Greece 0.9070% (+4.9bp), Portugal 0.373% (+1bp); Spain 0.472% (+1.25bp) and UK Gilts 1.073% (-1.4bp).

 

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