ASIA:

January’s reading for China’s purchasing managers’ index has confirmed expectations that Asia’s powerhouse is back into growth mode, beating analyst expectations and topping 50. At 50.1, the official manufacturing PMI reading is above the line that separates growth from contraction and compares with analyst expectations of a reading below 50, at 49.8, per a Reuters poll. In services, the Chinese economy was doing even better, with the January PMI reading at 54.4, compared with expectations of 52. A separate PMI reading compiled by Caixin Global showed a contraction in manufacturing activity in January, however, at 49.2. Still, the number was slightly higher than the December reading. It suggests, however, that manufacturing activity shrank for the sixth month in a row in January, Caixin noted in its report.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 19.77 points or 0.07% to 27,346.88
• Shanghai increased 29.25 points or 0.90% to 3,284.92
• Hang Seng increased 229.85 points or 1.05% to 22,072.18
• ASX 200 increased 25.00 points or 0.33% to 7,501.70
• Kospi increased 24.72 points or 1.02% to 2,449.80
• SENSEX increased 158.18 points or 0.27% to 59,708.08
• Nifty50 decreased 45.85 points or -0.26% to 17,616.30

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00211 or 0.30% to 0.70751
• NZDUSD decreased 0.00046 or -0.07% to 0.64344
• USDJPY decreased 0.844 or -0.65% to 129.246
• USDCNY decreased 0.00881 or -0.13% to 6.74679

Precious Metals:

• Gold decreased 1.69 USD/t oz. or -0.09% to 1,926.19
• Silver decreased 0.176 USD/t. oz or -0.74% to 23.523

Some economic news from last night:

China:

Caixin Manufacturing PMI (Jan) remain the same at 49.2

New Zealand:

Employment Change (QoQ) (Q4) decreased from 1.3% to 0.2%

Unemployment Rate (Q4) increased from 3.3% to 3.4%

Some economic news from today:

India:

Nikkei S&P Global Manufacturing PMI (Jan) decreased from 57.8 to 55.4

Hong Kong:

GDP (QoQ) increased from -2.6% to 0.0%

GDP (YoY) increased from -4.5% to -4.2%

Australia:

Commodity Prices (YoY) decreased from 14.2% to 10.6%

EUROPE/EMEA:

Some 750,000 Britons are in danger of defaulting on their payments, and lenders are being called on to do more for those who are most vulnerable. Later this week (February 2), the central bank is likely to raise the base rate once more to four percent, an increase of 0.5 percent. For the average property in the UK, which costs £270,708 with a 75 percent loan-to-value, this rate increase would mean monthly mortgage repayments will rise by another £52. As a result, homeowners will be forced to pay an additional £430 each month compared to when the Bank of England’s interventions start in December 2021. According to the Bank of England, monthly repayments on around four million owner-occupied mortgages are expected to go up over 2023.

The major Europe stock markets had a mixed day:

• CAC 40 decreased 5.31 points or -0.07% to 7,077.11
• FTSE 100 decreased 10.59 points or -0.14% to 7,761.11
• DAX 30 increased 52.47 points or 0.35% to 15,180.74

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00535 or 0.49% to 1.09155
• GBPUSD decreased 0.00105 or -0.09% to 1.23095
• USDCHF decreased 0.0004 or -0.04% to 0.91570

Some economic news from Europe today:

UK:

Nationwide HPI (YoY) (Jan) decreased from 2.8% to 1.1%

Nationwide HPI (MoM) (Jan) decreased from -0.3% to -0.6%

Manufacturing PMI (Jan) increased from 46.7 to 47.0

Spain:

Spanish Manufacturing PMI (Jan) increased from 46.4 to 48.4

Swiss:

procure.ch PMI (Jan) decreased from 54.1 to 49.3

Italy:

Italian Manufacturing PMI (Jan) increased from 48.5 to 50.4

Italian CPI (MoM) (Jan) decreased from 0.3% to 0.2%

France:

French Manufacturing PMI (Jan) increased from 49.2 to 50.5

Germany:

German Manufacturing PMI (Jan) increased from 47.1 to 47.3

Euro Zone:

Manufacturing PMI (Jan) increased from 47.8 to 48.8

Core CPI (YoY) remain the same at 5.2%

CPI (MoM) remain the same at -0.4%

CPI (YoY) (Jan) decreased from 9.2% to 8.5%

Unemployment Rate (Dec) remain the same at 6.6%

US/AMERICAS:

All eyes were on the Federal Reserve’s announcement this Wednesday after the Federal Open Market Committee raised rates by 25 basis points. The target range now sits at 4.5%-4.7%, marking the highest level since October 2007. This is the eighth increase since March 2022, and the committee will not pivot anytime soon due to historically high inflation. Inflation is nowhere near the 2% target, and Chairman Jerome Powell noted the need for “ongoing increases in the target range.” Powell also reiterated his stance by saying that he does not foresee any rate cuts in 2023, although it is possible that rates will remain below 5%. Despite price instability, the Fed believes the US economy will grow this year, albeit at a “subdued pace.”

US Market Closings:

• Dow advanced 6.92 points or 0.02% to 34,092.96
• S&P 500 advanced 42.61 points or 1.05% to 4,119.21
• Nasdaq advanced 231.77 points or 2% to 11,816.32
• Russell 2000 advanced 28.87 points or 1.49% to 1,960.81

Canada Market Closings:

• TSX Composite declined 16.33 points or -0.08% to 20,751.05
• TSX 60 declined 2.72 points or -0.22% to 1,248.79

Brazil Market Closing:

• Bovespa declined 1,356.99 points or -1.2% to 112,073.55

ENERGY:

The oil markets had a negative day today:

• Crude Oil decreased 2.318 USD/BBL or -2.94% to 76.552
• Brent decreased 2.883 USD/BBL or -3.37% to 82.577
• Natural gas decreased 0.174 USD/MMBtu or -6.48% to 2.5100
• Gasoline decreased 0.1068 USD/GAL or -4.16% to 2.4600
• Heating oil decreased 0.1899 USD/GAL or -6.04% to 2.9549

The above data was collected around 13:18 EST on Wednesday

• Top commodity gainers: Orange Juice (4.56%), Methanol (1.01%), Bitumen (1.08%) and Potatoes (0.66%)
• Top commodity losers: Milk (-8.01%), Natural Gas (-6.48%), Heating Oil (-6.04%) and Cheese (-6.97%)

The above data was collected around 13:26 EST Wednesday.

BONDS:

Japan 0.48% (-1bp), US 2’s 4.21% (-0.002%), US 10’s 3.4699% (-5.91bps); US 30’s 3.59% (-0.071%), Bunds 2.283% (+0.7bp), France 2.749% (-0.3bp), Italy 4.269% (-0.3bp), Turkey 10.52% (+0bp), Greece 4.346% (+2.6bp), Portugal 3.214% (+1.7bp); Spain 3.333% (+0.7bp) and UK Gilts 3.295% (-3.8bp).

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Market Talk - Friday, Jan. 27