Market interview – 3 August 2022

ASIA:

China announced Tuesday that its People’s Liberation Army (PLA) will launch a series of targeted military operations on the island in response to House Speaker Nancy Pelosi’s visit to Taiwan and its steadfast defense of national sovereignty and territorial integrity. . The announcement came shortly after Pelosi’s landing in Taiwan, the first time in 25 years for a US House of Representatives spokesperson. China considers Taiwan its “breakaway province”. However, Taipei has insisted on its independence since 1949. The EPL’s Eastern Theater Command also announced it would hold joint military operations around Taiwan, with joint naval and air exercises in the north, southwest and southeast of Taiwan. island, long-range artillery fire in the Taiwan Strait and launched conventional missiles into sea areas east of the island since Tuesday evening, the Global Times reported in China.

Japan and the United States intend to combine their economic influence to prevent China from turning its vast resources into strategic victories. Foreign Minister Antony Blinken, Secretary of Commerce Gina Raimondo and their Japanese counterparts have stopped, citing the concept of “economic NATO” proposed by some US lawmakers and allies. Friday’s meeting fell under the banner of the US-Japan Economic Policy Advisory Committee, a new format for the quartet of diplomatic and economic policymakers to coordinate their efforts to “make our economies more competitive and resilient.”

Major Asian equity markets had a mixed day today:

  • NIKKEI 225 is up 147.17 points or 0.53% to 27,741.90
  • Shanghai fell 22.59 points or -0.71% to 3,163.67
  • Hang Seng is up 77.88 points or 0.40% to 19,767.09
  • ASX 200 decreased by 22.20 points or -0.32% to 6,975.90
  • Kospi was up 21.83 points or 0.89% to 2,461.45
  • SENSEX is up 214.17 points or 0.37% to 58,350.53
  • Nifty50 is up 42.70 points or 0.25% to 17,388.15

The major Asian currency markets had a mixed day today:

  • AUDUSD was up 0.00363 or 0.53% to 0.69395
  • NZDUSD was up 0.00014 or 0.02% to 0.62574
  • USDJPY is up 0.845 or 0.63% to 134.179
  • USDCNY fell by 0.01604 or -0.24% to 6.76116

Precious metals:

l Gold rose by USD 1.14 / toz. or 0.06% to 1,764.41

l Silver increased by USD 0.021 / t. oz or 0.11% at 19.988

Some economic news from last night:

China:

Caixin Services PMI (July) increased from 54.5 to 55.5

Hong Kong:

The manufacturing PMI (July) decreased from 52.4 to 52.3

Japan:

The services PMI (July) decreased from 54.0 to 50.3

South Korea:

FX – USD reserves (July) increased from 438.28 billion to 438.61 billion

Australia:

The AIG construction index (July) decreased from 46.2 to 45.3

The services PMI decreased from 52.6 to 50.9

Retail Sales (Monthly) decreased from 0.9% to 0.2%

Retail Sales (QoQ) (Q2) increased from 1.0% to 1.4%

New Zeland:

ANZ Commodity Price Index (MoM) decreased from -0.4% to -2.2%

Change in employment (QoQ) (Q2) remains the same at 0.0%

The labor cost index (year over year) (2nd quarter) increased from 3.1% to 3.4%

The labor cost index (QoQ) (Q2) increased from 0.7% to 1.3%

Participation rate (Q2) decreased from 70.90% to 70.80%

Unemployment rate (Q2) increased from 3.2% to 3.3%

Some economic news today:

India:

Nikkei Services PMI (July) fell from 59.2 to 55.5

EUROPE / EMEA:

The Bank of England (BoE) has made it clear that it will act vigorously to control record inflation, and markets are almost certain of a rare half percentage point interest rate hike this Thursday. A 50 basis point hike to 1.75% will be the highest interest rate in 27 years and accelerate a historic tightening of monetary policy to stifle the highest level of inflation in 40 years. Inflation hit 9.4% in June and the Bank of England expects a peak of 11% by the end of the year, well above its 2% target.

The European Central Bank (ECB) prefers CBDCs as a cross-border payment method over Bitcoin (BTC), stable banks and coins, among others, according to a report published by a major online newspaper. Although the study presented Bitcoin’s inherent scaling and speed issues, it overlooked the updates requested by Taproot and Lightning Network, which updated the network’s performance, assuming that “The underlying technology (and in particular its’ proof-of -work ‘) is inherently expensive and wasteful. ”In contrast, the ECB has recognized CBDCs as a more important counterparty for cross-border payments that have better compatibility with forex exchange (FX) transformations, as its benefits include safeguarding of monetary power and the comfort of instant payments through intermediaries identical to central banks.

Major European exchanges had a green day:

The CAC 40 increased by 62.26 points or 0.97% to 6,472.06

The FTSE 100 is up 36.57 points or 0.49% to 7,445.68

The DAX 30 is up 138.36 points or 1.03% to 13,587.56

The major European currency markets had a mixed day today:

  • EURUSD fell 0.0003 or -0.03% to 1.01534
  • GBPUSD fell 0.00076 or -0.06% to 1.21429
  • USDCHF is up by 0.00492 or 0.51% to 0.96232

Some economic news from Europe today:

Germany:

German Exports (Monthly) (June) increased from 1.3% to 4.5%

German Imports (Monthly) (June) decreased from 3.2% to 0.2%

The German trade balance (June) increased from 0.8 to 6.4 billion

The German composite PMI (July) decreased from 51.3 to 48.1

The German PMI on services (July) decreased from 52.4 to 49.7

Swiss:

CPI (Monthly) (July) decreased from 0.5% to 0.0%

CPI (YoY) (July) remains the same at 3.4%

Spain:

The Spanish services PMI (July) decreased from 54.0 to 53.8

Italy:

The Italian composite PMI (July) decreased from 51.3 to 47.7

The Italian services PMI (July) decreased from 51.6 to 48.4

Italian retail sales (year over year) (June) decreased from 6.8% to 1.4%

Italian Retail Sales (Monthly) (June) decreased from 2.0% to -1.1%

France:

The French government’s balance sheet (June) increased from -82.3 billion to -76.1 billion

The French S&P Global Composite PMI (July) fell from 52.5 to 51.7

The PMI French services index (July) decreased from 53.9 to 53.2

Euro zone:

S&P Global Composite PMI (July) fell from 52.0 to 49.9

The services PMI (July) decreased from 53.0 to 51.2

PPI (YoY) (Jun) decreased from 36.2% to 35.8%

PPI (Monthly) (June) increased from 0.5% to 1.1%

Retail sales (year over year) (June) fell from 0.4% to -3.7%

Retail Sales (Monthly) (June) decreased from 0.4% to -1.2%

UK:

The composite PMI (July) decreased from 53.7 to 52.1

The services PMI (July) decreased from 54.3 to 52.6

USA / AMERICA:

St. Louis Fed Chairman James Bullard expressed hawkish sentiments this Wednesday believing the central bank will need to raise rates once they meet again in September. His message comes as no surprise as the Fed said they will have to see compelling evidence of falling inflation for several months. Bullard, a voting member, would like to see rates rise from 3.75% to 4% by the end of the year. In September, however, he sees another 1.5 percentage point increase.

In further news from the central bank, San Francisco Fed Chair Mary Daly stressed that the fight against inflation is far from over. “The number of people who can’t afford this week what they easily paid for six months ago just means our work is far from done,” she told CNBC Tuesday. Despite recent strong rate hikes, Daly cautioned that this is not an indication that the Fed will back down before consistent data is available indicating a decrease in inflationary pressures.

The US market closes:

  • Dow advanced 416.33 points or 1.29% to 38,812.5
  • S&P 500 advanced 63.98 points or 1.56% to 4,155.17
  • The Nasdaq advanced 319.4 points or 2.59% to 12,668.16
  • Russell 2000 advanced 26.48 points or 1.41% to 1,908.93

Closing of the Canadian market:

  • TSX Composite advanced 40.61 points or 0.21% to 19,545.94
  • TSX 60 advanced 4.06 points or 0.21% at 19,545.94

Closing of the Brazilian market:

  • Bovespa advanced 412.98 points or 0.4% to 103,774.68

POWER:

Today the oil markets had a mixed day:

l Crude oil decreased USD 3.73 / BBL or -3.95% to 90.816

l Brent fell USD 3.81 / BBL or -3.79% to 96.600

l Natural gas increased by USD 0.541 / MMBtu or 7.02% to 8.2319

l Gasoline decreased by USD 0.1542 / GAL or -5.04% to 2.9018

l Heating oil increased by USD 0.0251 / GAL or 0.74% to 3.4042

The above data was collected around 2:55 PM EST on Wednesday

l Best commodity earnings: natural gas (7.02%), coffee (2.26%), orange juice (2.76%) and butter (1.94%)

l The main losing raw materials: timber (-4.99%), cheese (-10.05%), milk (-10.56%) and gasoline (-5.04%)

The above data was collected around 3:05 PM EST on Wednesday.

OBLIGATIONS:

Japan 0.189% (+1.4 bps), United States 2 3.10% (+ 0.019%), United States 10 2.7464% (+0.54 bps); US 30’s 2.98% (-0.008%), Bund 0.8740% (+9.2 bps), France 1.4400% (+6.1 bps), Italy 3.023% (-0.8 bps), Turkey 16.81% (-19bps), Greece 3.046% (+ 8.9bps), Portugal 1.914% (+4.6bps); Spain 1.984% (+5bps) and British Gilts 1.9140% (+4.8bps).

«Market interview – 2 August 2022