Market Talk - Friday, Dec. 3

ASIA:

China’s foreign exchange regulator issued guidelines on foreign exchange trading on Friday, targeting market manipulation, fraud, and abuses. The guidelines would help regulate foreign exchange market trading and promote “honest, fair, orderly, and efficient” market operations, the State Administration of Foreign Exchange said. According to the guidelines, market participants would be barred from manipulating closing currency prices or other benchmark prices and barred from abusing dominant market positions to influence prices.

India is likely to buy more Malaysian palm oil after export levies imposed by top producer Indonesia hit record highs in the past year, B.V. Mehta, executive director of India’s Solvent Extractors’ Association, said on Thursday. Indonesia had imposed higher export taxes and levies in the past year, making prices of palm oil – which had already reached record highs this year – more costly for the top buyer. Indonesia started taxing crude palm oil exports again after three years of absence in February last year, while export levies for the edible oil reached a record high of $255 per tonne in February earlier this year. Indonesia set its crude palm oil export reference price higher for December, meaning that palm oil taxes and levies remain at the top bracket of $200 per tonne and $175 per tonne, respectively.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 276.20 points or 1.00% to 28,029.57
  • Shanghai increased 33.60 or 0.94% to 3,607.43
  • Hang Seng decreased 22.24 points or -0.09% to 22,766.69
  • ASX 200 increased 16.00 points or 0.22 to 7,241.20
  • Kospi increased 23.06 points or 0.78% to 2,968.33
  • SENSEX decreased 764.83 points or -1.31% to 57,696.46
  • Nifty50 decreased 204.95 points or -1.18% to 17,196.70

The major Asian currency markets had a negative day today:

  • AUDUSD decreased 0.00786 or -1.11% to 0.70088
  • NZDUSD decreased 0.00543 or -0.80% to 0.67522
  • USDJPY decreased 0.23 or -0.20% to 112.82
  • USDCNY decreased 0.00012 or 0.00% to 6.37259

Precious Metals:

  • Gold increased 13.34 USD/t oz. or 0.75% to 1,781.98
  • Silver increased 0.085 USD/t. oz or 0.38% to 22.460

Some economic news from last night:

China:

Caixin Services PMI (Nov) decreased from 53.8 to 52.1

Japan:

Services PMI (Nov) increased from 50.7 to 53.0

South Korea:

FX Reserves – USD (Nov) decreased from 469.21B to 463.91B

Australia:

AIG Construction Index (Nov) decreased from 57.6 to 57.0

Services PMI increased from 51.8 to 55.7

Hong Kong:

Manufacturing PMI (Nov) increased from 50.8 to 52.6

Some economic news from today:

India:

Nikkei Services PMI (Nov) decreased from 58.4 to 58.1

Bank Loan Growth decreased from 7.1% to 7.0%

Deposit Growth decreased from 11.4% to 9.8%

FX Reserves, USD decreased from 640.40B to 637.69B

Singapore:

Retail Sales (MoM) (Oct) decreased from 6.1% to 0.7%

Retail Sales (YoY) (Oct) increased from 6.8% to 7.5%

EUROPE/EMEA:

The strongest inflation pressures in at least 23 years crimped the recovery of British services companies from the COVID-19 pandemic in November and dented optimism for the coming year, a survey showed on Friday. The IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) fell to 58.5 in November from 59.1 in October, revised down slightly from a preliminary “flash” reading of 58.6. The composite PMI – a combination of the services survey and Wednesday’s manufacturing PMI – eased to 57.6 in November from 57.8 in October. The survey’s gauges of costs paid by services companies and prices they charged to customers hit their highest levels since records started in 1998, which some Bank of England officials may view as backing the case for an interest rate hike on Dec. 16 at its next policy announcement.

A 17 billion euro ($19.23 billion) French arms deal with the United Arab Emirates will secure the industrial supply chain for France’s Rafale warplane for the next decade and directly support 7,000 domestic jobs, a French defense ministry official said. The deal, sealed on Friday, includes the largest-ever overseas sale of the French warplanes. It brings the number of new or second-hand Rafales sold for export to 236 and will trigger an increase in production for the warplane, the official told reporters. The deal is worth 14 billion euros for 80 of Dassault Aviation’s Rafale fighters, 2 billion for air-to-air and cruise missiles supplied by European consortium MBDA (AIR.PA), (BAES.L), (LDOF.MI) and 1 billion for 12 Airbus H225M Caracal helicopters, the official said.

The major Europe stock markets had a negative day:

  • CAC 40 decreased 30.23 points or -0.44% to 6,765.52
  • FTSE 100 decreased 6.89 points or -0.10% to 7,122.32
  • DAX 30 decreased 93.13 points or -0.61% to 15,169.98

The major Europe currency markets had a negative day today:

  • EURUSD decreased 0.0022 or -0.19% to 1.13178
  • GBPUSD decreased 0.00519 or -0.39% to 1.32490
  • USDCHF decreased 0.00368 or -0.40% to 0.91720

Some economic news from Europe today:

France:

French Government Budget Balance (Oct) increased from -175.1B to -171.6B

French Industrial Production (MoM) (Oct) increased from -1.5% to 0.9%

French Markit Composite PMI (Nov) increased from 54.7 to 56.1

French Services PMI (Nov) increased from 56.6 to 57.4

Spain:

Spanish Services PMI (Nov) increased from 56.6 to 59.8

Italy:

Italian Composite PMI (Nov) increased from 54.2 to 57.6

Italian Services PMI (Nov) increased from 52.4 to 55.9

Germany:

German Composite PMI (Nov) increased from 52.0 to 52.2

German Services PMI (Nov) increased from 52.4 to 52.7

Norway:

Unemployment Change (Nov) decreased from 85.17K to 80.13K

Unemployment Rate n.s.a. (Nov) decreased from 2.2% to 2.1%

House Price Index (YoY) (Nov) decreased from 7.00% to 6.60%

Euro Zone:

Markit Composite PMI (Nov) increased from 54.2 to 55.4

Services PMI (Nov) increased from 54.6 to 55.9

Retail Sales (YoY) (Oct) decreased from 2.6% to 1.4%

Retail Sales (MoM) (Oct) increased from -0.4% to 0.2%

UK:

Composite PMI (Nov) decreased from 57.8 to 57.6

Services PMI (Nov) decreased from 59.1 to 58.5

US/AMERICAS:

Job growth in the US disappointed in November after nonfarm payrolls rose less than half of what analysts had predicted. Payrolls increased by 210,000, but the markets were anticipating a growth rate between 546,000 and 573,000. The beaten leisure and hospitality sector rose by only 23,000 after seeing an uptick in previous months. The sector is still short of 1.3 million jobs, with an unemployment rate at 7.5%. Professional and business services advanced by 90,000 positions, transportation and warehousing by 50,000, and construction by 31,000. Despite the holiday season in full swing, retail jobs shed 20,000 positions. The government managed to add 10,000 new people to payrolls. Worker wages rose 0.26% in November, marking a 4.8% increase YoY. The overall unemployment rate in America now sits at 4.2%.

The Canadian labor force rose by 154,000 or 0.8% in November and is showing steady improvement. The labor force is now 186,000 positions or 1% higher than pre-pandemic levels. The service and goods sectors rose by 80,000 for full-time workers and 74,000 for part-time. Private sector hiring led November’s job rally with an additional 107,000 employees. There was little change in public sector hiring. Wages have increased 5.2% over the past two years as well. The current Canadian unemployment rate is 6% or within 0.3 percentage points of February 2020 levels.

US Market Closings:

  • Dow declined 59.71 points or -0.17% to 34,580.08
  • S&P 500 declined 38.67 points or -0.84% to 4,538.43
  • Nasdaq declined 295.85 points or -1.92% to 15,085.47
  • Russell 2000 declined 47.02 points or -2.13% to 2,159.31

Canada Market Closings:

  • TSX Composite declined 128.76 points or -0.62% to 20,633.27
  • TSX 60 declined 6.21 points or -0.49% to 1,251.60

Brazil Market Closing:

  • Bovespa advanced 603.45 points or 0.58% to 105,069.69

ENERGY:

The oil markets had a mixed day today:

  • Crude Oil decreased 0.02 USD/BBL or -0.03% to 66.4800
  • Brent increased 0.38 USD/BBL or 0.55% to 70.0500
  • Natural gas increased 0.179 USD/MMBtu or 4.41% to 4.2350
  • Gasoline decreased 0.01 USD/GAL or -0.51% to 1.9577
  • Heating oil decreased 0.0023 USD/GAL or -0.11% to 2.1011

The above data was collected around 13:35 EST on Friday

  • Top commodity gainers: Natural Gas (4.41%) and Soybeans (1.55%), Corn (1.39%), Palladium (1.82%)
  • Top commodity losers: Oat (-1.24%), Wheat (-2.14%), Rubber (-1.06%), and Feeder Cattle (-0.86%)

The above data was collected around 13:42 EST on Friday

BONDS:

Japan 0.057%(-0.2bp), US 2’s 0.5932% (-0.02%), US 10’s 1.3632%(-8.11bps); US 30’s 1.6863% (-0.08%), Bunds -0.39% (-1.7bp), France 0.034% (-2.3bp), Italy 0.916% (-4bp), Turkey 20.18% (+0bp), Greece 1.224% (+1.6bp), Portugal 0.303% (-0.6bp); Spain 0.35% (-3.56bp) and UK Gilts 0.736% (-7.7bp).

Disclosure: None.

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