ASIA:

Japan’s economy grew faster than initially estimated in the April-June quarter, helped by solid capital expenditure, although a resurgence in COVID-19 is undermining service-sector consumption and clouding the outlook. Revised gross domestic product (GDP) data by the Cabinet Office released on Wednesday showed the economy grew an annualized 1.9% in April-June, beating economists’ median forecast for a 1.6% gain and the initial estimate of a 1.3% expansion. The upward revision was caused by better-than-initially-estimated business spending, as a brisk global economic recovery powered capital expenditure and factory output, which more than offset weak service-sector activity.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 265.07 points or 0.89% to 30,181.21
• Shanghai decreased 1.40 points or -0.04% to 3,675.19
• Hang Seng decreased 32.70 or -0.12% to 26,320.93
• ASX 200 decreased 18.30 points or -0.24% to 7,512.00
• Kospi decreased 24.43 points or -0.77% to 3,162.99
• SENSEX decreased 29.22 points or -0.05% to 58,250.26
• Nifty50 decreased 8.60 points or -0.05% to 17,353.50

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00083 or -0.11% to 0.73791
• NZDUSD increased 0.00152 or 0.21% to 0.71123
• USDJPY decreased 0.11 or -0.10% to 110.18
• USDCNY decreased 0.00566 or -0.09% to 6.45582

Precious Metals:

• Gold decreased 1.17 USD/t oz. or -0.07% to 1,792.96
• Silver decreased 0.269 USD/t. oz or -1.11% to 24.029

Some economic news from last night:

Japan:

Adjusted Current Account decreased from 1.78T to 1.41T

Bank Lending (YoY) (Aug) decreased from 0.9% to 0.6%

Current Account n.s.a. (Jul) increased from 0.905T to 1.911T

GDP (QoQ) (Q2) increased from -0.9% to 0.5%

GDP (YoY) (Q2) increased from -3.7% to 1.9%

GDP Capital Expenditure (QoQ) (Q2) increased from -1.3% to 2.3%

GDP External Demand (QoQ) (Q2) decreased from -0.2% to -0.3%

GDP Price Index (YoY) decreased from -0.7% to -1.1%

GDP Private Consumption (QoQ) (Q2) increased from -1.0% to 0.9%

Some economic news from today:

Japan:

Economy Watchers Current Index (Aug) decreased from 48.4 to 34.7

Indonesia:

Consumer Confidence (Aug) decreased from 80.2 to 77.3

EUROPE/EMEA:

The governor of the Bank of England, Andrew Bailey, has warned Britain’s economic recovery from Covid-19 is slowing amid supply chain disruption and staff shortages. He said the economic fallout from the disease had “attenuated a lot” over recent months, helping growth to rebound. “But it’s still within the context of this imbalance in demand for goods and services. He also added at the moment we’re seeing some leveling off of the recovery, suggested by short-term indicators. He said there had been an expectation that consumer demand for goods would increasingly switch to services as pandemic restrictions were relaxed, but that had so far not happened as much as expected.

The major Europe stock markets had a negative day:

• CAC 40 decreased 57.18 points or -0.85% to 6,668.89
• FTSE 100 decreased 53.84 points or -0.75% to 7,095.53
• DAX 30 decreased 232.81 points or -1.47% to 15,610.28

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00125 or -0.11% to 1.18291
• GBPUSD increased 0.00014 or 0.01% to 1.37823
• USDCHF increased 0.00113 or 0.12% to 0.92069

Some economic news from Europe today:

France:

French Non-Farm Payrolls (QoQ) (Q2) decreased from 1.2% to 1.1%

French Current Account (Jul) decreased from -0.90B to -3.50B

French Exports (Jul) decreased from 41.5B to 40.7B

French Imports (Jul) remain the same at 47.6B

French Trade Balance (Jul) decreased from -6.1B to -7.0B

Italy:

Italian Retail Sales (MoM) (Jul) decreased from 0.7% to -0.4%

Italian Retail Sales (YoY) (Jul) decreased from 7.9% to 6.7%

US/AMERICAS:

Treasury Secretary Janet Yellen is warning lawmakers to raise or suspend the debt ceiling as “the most likely outcome is that cash and extraordinary measures will be exhausted during the month of October.” Former President Trump suspended the debt ceiling for two years, but the borrowing limit was reimplemented in July after lawmakers failed to act. The debt ceiling was $22 trillion in August 2019, according to the Committee for a Responsible Federal Budget (GRFB). However, the agency believes the reinstated debt will reach $28.5 trillion once lifted. Republicans and Democrats cannot agree on the next measures. Republican Senate Minority Leader Mitch McConnell said that he “can’t imagine a single Republican voting to raise the debt ceiling after what we’ve been experencing,” referencing past and proposed spending efforts. It would take at least 10 Republican votes to pass an act to raise the nation’s borrowing limit.

The Biden Administration has plans to raise taxes on the wealthiest Americans to support the proposed $3.5 trillion budget plan. The Democrats have the ability to bypass the Republican Senate filibuster through reconciliation, but most Democratic members will need to vote in favor to enact the bill. Since the GOP will likely not raise the debt ceiling, Democrats plan to implement new taxes to support the bill. Individuals earning over $452,700 annually and couples earning over $509,300 annually will see their taxes increased to 39.6%. Currently, the highest tax rate is 37% for individuals earning over $523,601 and couples making over $628,301.

US Market Closings:

• Dow declined 68.93 points or -0.2% to 35,031.07
• S&P 500 declined 5.96 points or -0.13% to 4,514.07
• Nasdaq declined 87.69 points or -0.57% to 15,286.64
• Russell 2000 declined 25.88 points or -1.14% to 2,249.73

Canada Market Closings:

• TSX Composite declined 64.84 points or -0.31% to 20,741.79
• TSX 60 declined 3.33 points or -0.27% to 1,242.59

Brazil Market Closing:

• Bovespa declined 4,455.79 points or -3.78% to 113,412.84

ENERGY:

The oil markets had a green day today:

• Crude Oil increased 1 USD/BBL or 1.46% to 69.3400
• Brent increased 0.96 USD/BBL or 1.34% to 72.6500
• Natural gas increased 0.367 USD/MMBtu or 8.03% to 4.9350
• Gasoline increased 0.0009 USD/GAL or 0.04% to 2.1309
• Heating oil increased 0.0128 USD/GAL or 0.60% to 2.1344

The above data was collected around 14:45 EST on Wednesday

• Top commodity gainers: Methanol (2.46%) and Palm Oil (2.05%), Natural Gas (8.03%) and Aluminum (2.36%)
• Top commodity losers: Palladium (-4.72%), Rubber (-2.48%), Orange Juice (-2.04%), and Lumber (-2.70%)

The above data was collected around 14:55 EST on Wednesday

BONDS:

Japan 0.043%(+0.30bp), US 2’s 0.22%(-0.004%), US 10’s 1.3376%(-3.90bps); US 30’s 1.95%(-0.040%),Bunds -0.3270% (-1.00bp), France 0.0140% (-1.9bp), Italy 0.7594% (-0.18bp), Turkey 16.58% (+12bp), Greece 0.857% (-1.80bp), Portugal 0.241% (-2.70bp); Spain 0.380% (-0.01bp) and UK Gilts 0.7510% (+1.10bp).