Market Talk - Tuesday, Nov. 30

ASIA:

China’s factory activity unexpectedly picked up in November, growing for the first time in three months as the crippling surge in raw material prices and power rationing eased, taking some pressure off the manufacturing sector. The official manufacturing Purchasing Managers’ Index (PMI) rose to 50.1 in November from 49.2 in October, data from the National Bureau of Statistics (NBS) showed on Tuesday. The world’s second-largest economy, which staged an impressive rebound from last year’s pandemic slump, has lost momentum in the second half of this year as it grapples with slowing manufacturing, debt problems in the property market and COVID-19 outbreaks. Analysts expect the slowdown in gross domestic product (GDP)seen in the third quarter to continue in the fourth with demand expected to remain soft.

India’s economy continued to expand in the July-September quarter, marking the fourth consecutive quarter of growth. India’s GDP grew 8.4% on-year basis against a contraction of 7.4% during the same period last year. The growth showed that the economy remained on the recovering trajectory during the second quarter. India’s economic growth was aided by the re-opening of the economy after the second wave of the Covid-19 pandemic. GDP at constant prices (2011-12) in the quarter came in at Rs 35.73 lakh crore, against Rs 32.38 lakh crore in the previous quarter.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 462.16 points or -1.63% to 27,821.76
  • Shanghai increased 1.19 or 0.03% to 3,563.89
  • Hang Seng decreased 376.98 points or -1.58% to 23,475.26
  • ASX 200 increased 16.20 points or 0.22 to 7,256.00
  • Kospi decreased 70.31 points or -2.42% to 2,839.01
  • SENSEX decreased 195.71 points or -0.34% to 57,064.87
  • Nifty50 decreased 70.75 points or -0.41% to 16,983.20

The major Asian currency markets had a negative day today:

  • AUDUSD decreased 0.00585 or -0.82% to 0.70867
  • NZDUSD decreased 0.00413 or -0.60% to 0.67889
  • USDJPY decreased 0.49 or -0.43% to 113.30
  • USDCNY decreased 0.00582 or -0.09% to 6.37829

Precious Metals:

  • Gold decreased 11.36 USD/t oz. or -0.64% to 1,773.65
  • Silver decreased 0.080 USD/t. oz or -0.35% to 22.811

Some economic news from last night:

China:

Chinese Composite PMI (Nov) increased from 50.8 to 52.2

Manufacturing PMI (Nov) increased from 49.2 to 50.1

Non-Manufacturing PMI (Nov) decreased from 52.4 to 52.3

Japan:

Jobs/applications ratio (Oct) decreased from 1.16 to 1.15

Unemployment Rate (Oct) decreased from 2.8% to 2.7%

Industrial Production (MoM) (Oct) increased from -5.4% to 1.1%

Industrial Production forecast 1m ahead (MoM) (Nov) increased from 6.4% to 9.0%

Industrial Production forecast 2m ahead (MoM) (Dec) decreased from 5.7% to 2.1%

South Korea:

Industrial Production (YoY) (Oct) increased from -1.8% to 4.5%

Industrial Production (MoM) (Oct) decreased from -1.1% to -3.0%

Retail Sales (MoM) decreased from 2.4% to 0.2%

Service Sector Output (MoM) (Oct) decreased from 1.4% to -0.3%

Australia:

Building Approvals (MoM) (Oct) decreased from -3.9% to -12.9%

Current Account (Q3) increased from 22.9B to 23.9B

Housing Credit (Oct) remain the same at 0.6%

Net Exports Contribution (Q3) increased from -1.0% to 1.0%

Private House Approvals (Oct) increased from -16.0% to 4.3%

Private Sector Credit (MoM) (Oct) decreased from 0.6% to 0.5%

New Zealand:

ANZ Business Confidence (Nov) decreased from -13.4 to -16.4

NBNZ Own Activity (Nov) decreased from 21.7% to 15.0%

Some economic news from today:

Hong Kong:

M3 Money Supply (Oct) decreased from -1.9% to -10.0%

Retail Sales (YoY) (Oct) increased from 7.3% to 12.0%

Japan:

Construction Orders (YoY) (Oct) decreased from 27.3% to 2.1%

Housing Starts (YoY) (Oct) increased from 4.3% to 10.4%

India:

Federal Fiscal Deficit (Oct) increased from 5,268.51B to 5,470.26B

GDP Quarterly (YoY) (Q2) decreased from 20.1% to 8.4%

Infrastructure Output (YoY) (Oct) increased from 4.5% to 7.5%

EUROPE/EMEA:

The European Central Bank is likely to keep buying bonds through 2022 to boost the bloc’s economy and could even resume pandemic emergency bond buys after they end in March, ECB Vice President Luis de Guindos told French newspaper Les Echos on Tuesday. The comments indicate that no rate rise will come next year as the ECB’s policy guidance stipulates that any interest rate increase would only come “shortly after” quantitative easing ends. De Guindos also took a relatively relaxed stance on the Omicron variant of COVID-19, arguing that the bloc’s economy has adapted well to life under the pandemic and vaccination was making progress.

A business survey released on Tuesday highlights that costs are rising at the fastest rate in over 20 years for firms in Britain’s services sector. This shows why the Bank of England may soon raise interest rates. The Confederation of British Industry said its quarterly survey of the services sector showed the quickest growth in costs for both business and consumer services companies since the survey began in 1998. Separate data from Lloyds Bank showed a record 50% of businesses plan to raise prices, and a quarter of them expect to raise pay by 3% or more over the next 12 months. Both surveys took place in the first half of November before news of the omicron variant of COVID-19 dented the confidence of financial market investors, who now see a roughly 60% chance that the BoE will raise rates in December.

Deutsche Bank Chief Executive Officer Christian Sewing said central bankers must change course to fight accelerating inflation. Sewing, speaking at a banking conference, said he didn’t share the opinion of central bankers that inflation increases were temporary.

The major Europe stock markets had a negative day:

  • CAC 40 decreased 55.09 points or -0.81% to 6,721.16
  • FTSE 100 decreased 50.50 points or -0.71% to 7,059.45
  • DAX 30 decreased 180.73 points or -1.18% to 15,100.13

The major Europe currency markets had a negative day today:

  • EURUSD decreased 0.00118 or -0.10% to 1.12839
  • GBPUSD decreased 0.00762 or -0.57% to 1.32412
  • USDCHF decreased 0.00128 or -0.14% to 0.92146

Some economic news from Europe today:

Norway:

Central Bank Currency Purchase (Dec) increased from -700.0M to 0.0M

Credit Indicator (YoY) (Oct) remain the same at 5.3%

France:

French Consumer Spending (MoM) (Oct) decreased from 0.2% to -0.4%

French CPI (MoM) remain the same at 0.4%

French CPI (YoY) increased from 2.6% to 2.8%

French GDP (QoQ) (Q4) remain the same at 3.0%

French HICP (MoM) remain the same at 0.4%

French HICP (YoY) increased from 3.2% to 3.4%

French PPI (MoM) (Oct) increased from 1.7% to 2.9%

Swiss:

KOF Leading Indicators (Nov) decreased from 110.2 to 108.5

Spain:

Spanish Retail Sales (YoY) (Oct) decreased from -0.1% to -0.7%

Spanish Current account (Sep) increased from 0.98B to 2.22B

Germany:

German Unemployment Change (Nov) increased from -39K to -34K

German Unemployment Rate (Nov) decreased from 5.4% to 5.3%

German Unemployment (Nov) decreased from 2.466M to 2.428M

German Unemployment n.s.a. (Nov) decreased from 2.377M to 2.317M

Italy:

Italian GDP (QoQ) (Q3) remain the same at 2.6%

Italian GDP (YoY) (Q2) decreased from 17.3% to 3.9%

Italian CPI (YoY) (Nov) increased from 3.0% to 3.8%

Italian CPI (MoM) (Nov) remain the same at 0.7%

Italian HICP (MoM) (Nov) decreased from 0.9% to 0.8%

Italian HICP (YoY) (Nov) increased from 3.2% to 4.0%

Euro Zone:

Core CPI (MoM) decreased from 0.8% to 0.5%

Core CPI (YoY) increased from 2.0% to 2.6%

CPI (MoM)decreased from 0.8% to 0.5%

CPI (YoY) (Nov) increased from 4.1% to 4.9%

CPI, n.s.a (Nov) increased from 109.41 to 109.91

HICP ex Energy & Food (YoY) (Nov) increased from 2.1% to 2.6%

HICP ex Energy and Food (MoM) decreased from 0.3% to 0.1%

US/AMERICAS:

Cyber Monday sales totaled $10.7 billion this year, according to Adobe Analytics. This marks a 1.4% decline from the year prior, making it the first time Adobe has reported falling sales since it began tracking Cyber Monday shopping trends in 2012. The company is anticipating digital sales to rise by 10% over the next month to $207 billion as consumers search for last-minute holiday items.

Fed Chairman Jerome Powell admitted this Tuesday that the use of the word “transitory” is inappropriate to describe inflation. “The word transitory has different meanings to different people,” he added. “It carries a sense of short-lived. We tend to use it to mean that it won’t leave a permanent mark in terms of inflation. I think it’s probably a good time to retire the word and explain more clearly what we mean. Inflation has been running well above the 2% target for some time and has been steadily rising. Powell also indicated that the central bank would begin its tapering program, news that sent the Dow sharply down in midday trading. “At this point, the economy is very strong and inflationary pressures are higher, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at the November meeting, perhaps a few months sooner,” he said. “I expect that we will discuss that at our upcoming meeting.”

US Market Closings:

  • Dow declined 652.22 points or -1.86% to 34,483.72
  • S&P 500 declined 88.27 points or -1.9% to 4,567.00
  • Nasdaq declined 245.14 points or -1.55% to 15,537.69
  • Russell 2000 declined 43.07 points or -1.92% to 2,198.91

Canada Market Closings:

  • TSX Composite declined 489.01 points or -2.31% to 20,659.99
  • TSX 60 declined 29.72 points or -2.32% to 1,248.56

Brazil Market Closing:

  • Bovespa declined 896.22 points or -0.87% to 101,917.81

ENERGY:

The oil markets had a negative day today:

  • Crude Oil decreased 3.84 USD/BBL or -5.49% to 66.1100
  • Brent decreased 2.93 USD/BBL or -3.99% to 70.5100
  • Natural gas decreased 0.29 USD/MMBtu or -5.97% to 4.5640
  • Gasoline decreased 0.0964 USD/GAL or -4.64% to 1.9807
  • Heating oil decreased 0.088 USD/GAL or -4.09% to 2.0641

The above data was collected around 11:56 EST on Tuesday

  • Top commodity gainers: Copper (0.47%) and Methanol (0.42%), Rhodium (1.46%), Lumber (3.78%)
  • Top commodity losers: Cotton (-4.41%), Crude Oil (-5.49%), Gasoline (-4.64%), and Natural Gas (-5.97%)

The above data was collected around 12:08 EST on Tuesday

BONDS:

Japan 0.059%(-1.5bp), US 2’s 0.5335% (+0.04%), US 10’s 1.446%(-5.61bps); US 30’s 2.024% (-0.06%), Bunds -0.350% (-2.7bp), France 0.010% (-3.1bp), Italy 0.982% (+0.3bp), Turkey 20.18% (+4bp), Greece 1.266% (-3.7bp), Portugal 0.335% (-1.9bp); Spain 0.412% (-1.83bp) and UK Gilts 0.814% (-4.4bp).

Disclosure: None.

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