ASIA:

China will fare the worst if spiking inflation, slowing growth, and rising interest rates lead to stagflation, according to the results of a stress test of 20,000 companies conducted by credit rating agency, S&P Global Ratings. The company said over 90% of its sample was made up of unrated companies with debt totaling $37 trillion, representing 41% of total global corporate debt. The companies were categorized into four risk tiers: low, moderately low, moderately high, and high.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 145.08 points or 0.54% to 26,788.47
• Shanghai decreased 53.68 points or -1.64% to 3,228.06
• Hang Seng decreased 453.49 points or -2.19% to 20,297.72
• ASX 200 decreased 45.00 points or -0.68% to 6,605.60
• Kospi increased 8.66 points or 0.37% to 2,330.98
• SENSEX increased 344.63 points or 0.65% to 53,760.78
• Nifty50 increased 110.55 points or 0.69% to 16,049.20

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00357 or 0.53% to 0.67901
• NZDUSD increased 0.00269 or 0.44% to 0.61559
• USDJPY decreased 0.437 or -0.31% to 138.552
• USDCNY decreased 0.00425 or -0.06% to 6.75685

Precious Metals:

• Gold decreased 4.68 USD/t oz. or -0.27% to 1,704.77
• Silver increased 0.291 USD/t. oz or 59% to 18.675

Some economic news from last night:

China:

House Prices (YoY) (Jun) decreased from -0.1% to -0.5%

China Thomson Reuters IPSOS PCSI (Jul) decreased from 72.96 to 71.52

Fixed Asset Investment (YoY) (Jun) decreased from 6.2% to 6.1%

GDP (YoY) (Q2) decreased from 4.8% to 0.4%

GDP (QoQ) (Q2) decreased from 1.4% to -2.6%

Chinese GDP YTD (YoY) (Q2) decreased from 4.8% to 2.5%

Industrial Production (YoY) (Jun) increased from 0.7% to 3.9%

Chinese Industrial Production YTD (YoY) (Jun) increased from 3.3% to 3.4%

Retail Sales (YoY) (Jun) increased from -6.7% to 3.1%

Chinese Retail Sales YTD (YoY) (Jun) increased from -1.51% to -0.69%

Japan:

Thomson Reuters IPSOS PCSI (Jul) decreased from 39.57 to 37.39

South Korea:

Export Price Index (YoY) (Jun) increased from 23.4% to 23.7%

Import Price Index (YoY) (Jun) decreased from 36.5% to 33.6%

Exports (YoY) (Jun) decreased from 5.4% to 5.2%

Imports (YoY) (Jun) remain the same at 19.4%

Trade Balance (Jun) decreased from -2.47B to -2.58B

New Zealand:

Business NZ PMI (Jun) decreased from 52.6 to 49.7

Some economic news from today:

Japan:

Tertiary Industry Activity Index (MoM) increased from 0.7% to 0.8%

India:

Bank Loan Growth increased from 13.2% to 14.4%

Deposit Growth increased from 8.3% to 9.8%

FX Reserves, USD decreased from 588.31B to 580.25B

EUROPE/EMEA:

The European Central Bank has come down hard on Proof-of-Work consensus algorithms—primarily bitcoin. To highlight concerns over Proof-of-Work energy consumption, the report also references previous data claiming that the yearly electricity consumption of Bitcoin and Ethereum is in line with that of individual countries, such as Spain, the Netherlands, or Austria. Additionally, the ECB argues that the current carbon footprint for Bitcoin and Ethereum as of May 2022 negates target greenhouse gas emission savings for most euro area countries. The report concludes that EU authorities will likely not go forward with plans to restrict the use of fossil fuel cars by the planned date of 2035 without also taking action against Proof-of-Work cryptocurrencies. In line with the Markets in Crypto-assets (MiCA) Regulation currently under consideration in the European Parliament, 2025 is now the target date for punitive measures targeting Proof-of-Work crypto assets.

The major Europe stock markets had a green day:

• CAC 40 increased 120.59 points or 2.04% to 6,036.00
• FTSE 100 increased 119.20 points or 1.69% to 7,159.01
• DAX 30 increased 345.06 points or 2.76% to 12,864.72

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00521 or 0.52% to 1.00749
• GBPUSD increased 0.00177 or 0.15% to 1.18543
• USDCHF decreased 0.00572 or -0.58% to 0.97808

Some economic news from Europe today:

Germany:

German Car Registration (YoY) (Jun) decreased from -10.2% to -18.1%

German Car Registration (MoM) (Jun) decreased from 14.9% to 8.4%

UK:

Car Registration (MoM) (Jun) increased from 4.4% to 13.3%

Car Registration (YoY) (Jun) decreased from -20.6% to -24.3%

Italy:

Italian Car Registration (YoY) (Jun) increased from -15.1% to -15.0%

Italian Car Registration (MoM) (Jun) decreased from 24.6% to 4.9%

Italian CPI (MoM) (Jun) remain the same at 1.2%

Italian CPI (YoY) (Jun) remain the same at 8.0%

Italian CPI Ex Tobacco (MoM) (Jun) increased from 6.8% to 7.8%

Italian HICP (MoM) (Jun) remain the same at 1.2%

Italian HICP (YoY) (Jun) remain the same at 8.5%

France:

French Car Registration (YoY) (Jun) decreased from -10.1% to -14.2%

French Car Registration (MoM) (Jun) increased from 16.6% to 34.9%

Euro Zone:

Trade Balance (May) increased from -32.8B to -26.3B

Reserve Assets Total (Jun) increased from 1,108.25B to 1,122.09B

US/AMERICAS:

Retail sales in the US rose 1% in June, according to the Commerce Department data released this Friday. This indicates a large turnaround from May’s report of -0.1%, which was revised down to indicate a steeper -0.3% drop. Federal Reserve members have stated that they would use this report as one of the key indicators for rate hike decisions at the end of the month.

Sales in restaurants and bars rose 1% during the first summer month in the US, helping the struggling hospitality sector. Online sales grew 2.2%, and furniture and home store sales advanced 1.4%. Brick and mortar stores are decreasing in popularity and declined 0.2%. Gasoline sales were up 3.6% as prices rose past $5 per gallon in June but have slowly begun to decline in July.

Consumer sentiment in the US compiled from the University of Michigan came in at 51.1, better than the 50 estimate, but still low by historical standards. Inflation expectations are high with most predicting a 5.2% gain over the year.

US Market Closings:

• Dow advanced 658.09 points or 2.15% to 31,288.26
• S&P 500 advanced 72.78 points or 1.92% to 3,863.16
• Nasdaq advanced 201.24 points or 1.79% to 11,452.42
• Russell 2000 advanced 36.87 points or 2.16% to 1,744.37

Canada Market Closings:

• TSX Composite advanced 65.39 points or 0.36% to 18,394.45
• TSX 60 advanced 3.73 points or 0.34% to 1,116.13

Brazil Market Closing:

• Bovespa advanced 430.15 points or 0.45% to 96,551

ENERGY:

The oil markets had a green day today:

• Crude Oil increased 1.92 USD/BBL or 2.00% to 97.700
• Brent increased 1.99 USD/BBL or 2.01% to 101.09
• Natural gas increased 0.514 USD/MMBtu or 7.79% to 7.1140
• Gasoline increased 0.0124 USD/GAL or 0.39% to 3.1992
• Heating oil increased 0.0434 USD/GAL or 1.19% to 3.6928

The above data was collected around 15:07 EST on Friday

• Top commodity gainers: Natural Gas (7.79%), Bitumen (10.28%), Potatoes (8.55%) and Lumber (6.56%)
• Top commodity losers: Canola (-5.82%), Wheat (-1.76%), Feeder Cattle (-1.29%) and Palladium (-2.62%)

The above data was collected around 15:15 EST on Friday.

BONDS:

Japan 0.234%(+0bp), US 2’s 3.14% (-0.004%), US 10’s 2.9337% (-2.53bps); US 30’s 3.10% (-0.008%), Bunds 1.135% (-4.4bp), France 1.6680% (-1.7bp), Italy 3.3620% (-0.7bp), Turkey 18.14% (-5bp), Greece 3.517% (-1.7bp), Portugal 2.340% (-1.9bp); Spain 2.326% (-0.1bp) and UK Gilts 2.0900% (-1.1bp).

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