ASIA:

Evergrande’s debt crisis will slow down China’s economic growth, but will likely have minimal spillover on the country’s financial system, Li Daokui, a former advisor to the People’s Bank of China said in an interview to CNBC. He added that a default by Evergrande will have minimal effect on the Chinese financial system because there aren’t derivative instruments built on the company’s debt. The Asian Development Bank said Wednesday that it has maintained its growth forecasts for China at 8.1% for 2021 and 5.5% for 2022. That would be an improvement from the 2.3% expansion last year when China became the only major economy to grow while most global economies were hit hard by the COVID-19 pandemic.

Image source: Pixabay

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 609.41 or 2.06% to 30,248.81
• Shanghai decreased 29.15 points or -0.80% to 3,613.07
• Hang Seng decreased 318.82 or -1.30% to 24,192.16
• ASX 200 decreased 27.60 points or -0.37% to 7,342.60
• Kospi decreased 2.34 points or -0.07% to 3,125.24
• SENSEX increased 163.11 points or 0.27% to 60,048.47
• Nifty50 increased 30.25 points or 0.17% to 17,853.20

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00428 or -0.59% to 0.72596
• NZDUSD decreased 0.00537 or -0.76% to 0.70173
• USDJPY increased 0.46 or 0.42% to 110.75
• USDCNY increased 0.00098 or 0.02% to 6.46177

Precious Metals:

• Gold increased 8.54 USD/t oz. or 0.49% to 1,751.11
• Silver decreased 0.097 USD/t. oz or -0.43% to 22.390

Some economic news from last night:

Japan:

CPI, n.s.a (MoM) (Aug) decreased from 0.2% to 0.0%

National Core CPI (YoY) (Aug) increased from -0.2% to 0.0%

National CPI (MoM) decreased from 0.2% to -0.2%

National CPI (YoY) (Aug) decreased from -0.3% to -0.4%

Manufacturing PMI (Sep) decreased from 52.7 to 51.2

Services PMI (Sep) increased from 42.9 to 47.4

South Korea:

PPI (MoM) (Aug) decreased from 1.0% to 0.4%

PPI (YoY) (Aug) decreased from 7.4% to 7.3%

New Zealand:

Exports (Aug) decreased from 5.77B to 4.35B

Imports (Aug) increased from 6.17B to 6.49B

Trade Balance (YoY) (Aug) decreased from -1,100M to -2,940M

Trade Balance (MoM) (Aug) decreased from -397M to -2,144M

Some economic news from today:

India:

Bank Loan Growth remain the same at 6.7%

Deposit Growth decreased from 9.5% to 9.3%

FX Reserves, USD decreased from 641.11B to 639.64B

Singapore:

Industrial Production (MoM) (Aug) increased from -2.8% to 5.7%

Industrial Production (YoY) (Aug) decreased from 16.4% to 11.2%

EUROPE/EMEA:

Britain’s private sector lost more momentum in September as supply chain issues and surging energy prices added to fears the economic recovery is entering a period of stagflation. The IHS Markit/CIPS Flash Composite Purchasing Managers’ Index, a good gauge of economic health, dropped for a fourth consecutive month in September to its lowest reading since February, slipping to 54.1 from 54.8 in August. September’s loss of momentum was most noticeable in the manufacturing sector, where demand softened and shortages of staff and materials stunted output, with factories and services firms raising prices aggressively to pass on the soaring cost of wages, products, and transportation. The PMI for the services sector also dipped in September, falling to 54.6 from 55.0 in August, its lowest level since February when Britain was still in lockdown.

The major Europe stock markets had a negative day:

• CAC 40 decreased 63.52 points or -0.95% to 6,638.46
• FTSE 100 decreased 26.87 points or -0.38% to 7,051.48
• DAX 30 decreased 112.22 points or -0.72% to 15,531.75

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00283 or -0.24% to 1.17169
• GBPUSD decreased 0.00503 or -0.37% to 1.36770
• USDCHF increased 0.0005 or 0.05% to 0.92488

Some economic news from Europe today:

Italy:

Italian Business Confidence (Sep) decreased from 113.2 to 113.0

Italian Consumer Confidence (Sep) increased from 116.2 to 119.6

Germany:

German Business Expectations (Sep) decreased from 97.8 to 97.3

German Current Assessment (Sep) decreased from 101.4 to 100.4

German Ifo Business Climate Index (Sep) decreased from 99.6 to 98.8

UK:

CBI Distributive Trades Survey (Sep) decreased from 60 to 11

GfK Consumer Confidence (Sep) decreased from -8 to -13

US/AMERICAS:

The Labor Department announced that the District of Columbia is facing the highest labor shortage in the US, with 2.37 job openings for every unemployed individual. Nebraska ranked second with a 1.80 ratio, followed by New Hampshire at 1.60, and Vermont at 1.59. The least impact states are Hawaii (0.41), New York (0.45), California (0.45), and Nevada (0.50). There are currently over 8 million Americans out of work. The top twelve sectors in the US reported “hiring intentions at ten-year highs,” according to ManpowerGroup’s Employment Outlook Survey. Federal Reserve Chairman Jerome Powell cited the delta variant as the main factor impacting unemployment, as many caregivers are unable to return to work due to uncertainty about the future.

Shipping costs are rising due to a labor shortage that is adding to inflationary problems. According to CNBC, shipping a 40-foot container from Shanghai to the ports in New York cost around $2,000 last year. Now, the exact shipping route costs upward of $16,000. Those additional costs will be passed down to the consumer. In addition,  FedEx said that they are rerouting 600,000 packages per day due to a labor shortage. FedEx COO Chief Operating Officer Raj Subramaniam mentioned “widespread inefficencies” due to the “constrained labor market,” noting that their hub in Portland, Oregon, is redirected 25% of all packages due to a lack of staffing. FedEx said they expect the problem to persist for the rest of the year.

Retail sales in Canada declined by 0.6% to C$55.8 billion in July, according to data provided by Statistics Canada. The Canadian economy contracted by 1.1% on an annualized basis during Q2. In July, five of the 11 sectors tracked by Statistics Canada declined. Notably, food and beverage sales dropped 3.4%, and wine and liquor declined 2.7%. Convenience store sales plummeted by 8.4%, with specialty food stores declining by 0.4%. Building materials and garden equipment sales shed 7.3%, but remains higher than pre-pandemic levels. Gasoline saw a rise of 1.4%, as did motor vehicles at 0.4%. The agency is estimating that retail sales for August will advance 2.1% as restrictions begin to ease.

US Market Closings:

• Dow advanced 33.18 points or 0.1% to 34,798.00
• S&P 500 advanced 6.5 points or 0.15% to 4,455.48
• Nasdaq declined 4.54 points or -0.03% to 15,047.7
• Russell 2000 declined 10.97 points or -0.49% to 2,248.07

Canada Market Closings:

• TSX Composite declined 59.27 points or -0.29% to 20,402.66
• TSX 60 declined 3.04 points or -0.25% to 1,221.73

Brazil Market Closing:

• Bovespa declined 781.69 points or -0.69% to 113,282.67

ENERGY:

The oil markets had a green day today:

• Crude Oil increased 0.85 USD/BBL or 1.16% to 74.1500
• Brent increased 0.89 USD/BBL or 1.15% to 78.1400
• Natural gas increased 0.134 USD/MMBtu or 2.69% to 5.1100
• Gasoline increased 0.0182 USD/GAL or 0.84% to 2.1897
• Heating oil increased 0.0195 USD/GAL or 0.87% to 2.2686

The above data was collected around 13:17 EST on Friday

• Top commodity gainers: Tin (3.21%) and Natural Gas (2.69%), Methanol (3.89%) and Rhodium (3.65%)
• Top commodity losers: Aluminum (-1.16%), Sugar (-1.69%), Oat (-1.72%), and Coal (-2.64%)

The above data was collected around 13:20 EST on Friday.

BONDS:

Japan 0.058%(+1.5bp), US 2’s 0.2736%(+0.01%), US 10’s 1.4543%(+1.9bps); US 30’s 1.9770%(+0.03%),Bunds -0.2260% (+2.6bp), France 0.1140% (+3.7bp), Italy 0.7826% (+6.37bp), Turkey 17.62% (+32bp), Greece 0.8190% (+5.50bp), Portugal 0.324% (+4.20bp); Spain 0.428% (+4.64bp) and UK Gilts 0.918% (+0.9bp).