ASIA:
China’s central bank cut the amount of cash most banks must hold in reserve. The People’s Bank of China will reduce the reserve requirement ratio by 0.5 of a percentage point for most banks, according to a statement published Friday. That will unleash about 1 trillion yuan ($154 billion) of long-term liquidity into the economy and will be effective on July 15, the central bank said. Reserve ratio cuts will allow banks to use more of their cash
India’s palm oil and soyoil imports plunged by nearly a quarter in June from a month ago, as refiners postponed purchases anticipating a reduction in the import tax. The country’s palm oil imports in the month dropped 24% from a month ago to 587,467 tonnes, while soyoil purchases fell by 23% to 206,262 tonnes, the Solvent Extractors’ Association of India (SEA) said in a statement. India’s sunflower oil imports in June were steady at 175,702 compared to 175,759 tonnes in May, it added. India buys palm oil from Indonesia and Malaysia while other oils, including soyoil and sunflower oil, are sourced from Argentina, Brazil, Ukraine and Russia.
Japan’s economy will grow at a slower pace than initially expected in the third quarter, as fresh coronavirus emergency curbs in Tokyo, extending through the Olympic Games, Reuters reported. The world’s third-largest economy was expected to grow an annualized 4.2% this quarter, according to the poll of around 40 economists taken between July 2 and 13, down from a 4.8% expansion projected last month. Economists also trimmed annualized growth for the second quarter to 0.4% from 0.5%. The government introduced a new state of emergency in Tokyo this week that is due to last until Aug. 22.
The major Asian stock markets had a mixed day today:
- NIKKEI 225 decreased 109.75 points or -0.38% to 28,608.49
- Shanghai decreased 38.02 points or -1.07% to 3,528.50
- Hang Seng decreased 175.95 points or -0.63% to 27,787.46
- ASX 200 increased 22.60 points or 0.31% to 7,354.70
- Kospi decreased 6.57 points or -0.20% to 3,264.81
- SENSEX increased 134.32 points or 0.25% to 52,904.05
- Nifty50 increased 41.60 points or 0.26% to 15,853.95
The major Asian currency markets had a mixed day today:
- AUDUSD increased 0.00408 or 0.55% to 0.74828
- NZDUSD increased 0.00910 or 1.31% to 0.70344
- USDJPY decreased 0.63 or -0.57% to 109.98
- USDCNY decreased 0.02314 or -0.36% to 6.45813
Precious Metals:
Gold increased 18.21 USD/t oz. or 1.01% to 1,825.65
Silver increased 0.3 USD/t. oz or 1.16%% to 26.262
Some economic news from last night:
China:
FDI (Jun) decreased from 35.40% to 28.70%
Japan:
Reuters Tankan Index (Jul) increased from 22 to 25
South Korea:
Unemployment Rate (Jun) decreased from 3.8% to 3.7%
Export Price Index (YoY) (Jun) increased from 12.6% to 12.7%
Import Price Index (YoY) (Jun) decreased from 14.2% to 14.0%
Australia:
Westpac Consumer Sentiment (Jul) increased from -5.2% to 1.5%
HIA New Home Sales (MoM) decreased from 15.2% to 14.8%
New Zealand:
RBNZ Interest Rate Decision remain the same at 0.25%
External Migration & Visitors (May) increased from 1,755.40% to 2,531.60%
Permanent/Long-Term Migration (May) increased from 832 to 1,182
Singapore:
GDP (QoQ) (Q2) decreased from 13.1% to -2.0%
GDP (YoY) (Q2) increased from 1.3% to 14.3%
Some economic news from today:
Japan:
Capacity Utilization (MoM) (May) decreased from 1.1% to -6.8%
Industrial Production (MoM) (May) decreased from 2.9% to -6.5%
India:
M3 Money Supply decreased from 10.7% to 10.1%
WPI Food (YoY) (Jun) decreased from 4.31% to 3.09%
WPI Fuel (YoY) (Jun) decreased from 37.61% to 32.83%
WPI Inflation (YoY) (Jun) decreased from 12.94% to 12.07%
WPI Manufacturing Inflation (YoY) (Jun) increased from 10.83% to 10.88%
Indonesia:
Car Sales (YoY) (Jun) decreased from 1,443.60% to 476.10%
EUROPE/EMEA:
The Bank of England scrapped its remaining pandemic curbs on dividends paid by HSBC, Barclays, and other top lenders with immediate effect on Tuesday, saying its stress tests showed they could cope with the fallout from COVID on the economy. Bank of England Governor Andrew Bailey said Britain’s rapid vaccination rollout had led to an improvement in the economic outlook, allowing the central bank to relax its controls on how much lenders can pay to shareholders. The buffer is intended to rise and fall over the course of the economic cycle to limit lending at the top of a boom and boost it during a downturn. The European Central Bank’s plans to let eurozone lenders resume payouts to shareholders from October, barring a new economic slump.
Bank of Spain has slightly raised its 2021 growth prospects for the Spanish economy from 6% to 6.2%. For next year, the forecast is being bumped up from 5.3% to 5.8%. Following an interruption of growth caused by the stricter coronavirus restrictions in force in late 2020 and early 2021, the economy is expanding again as reopenings get underway. Figures have been improving since March, said Óscar Arce, the Bank of Spain’s director general for economics, statistics and research. The polls are reflecting a robust industrial expansion and growth in services. The most recent available figures on fuel consumption remain around 10% below pre-pandemic times.
The major Europe stock markets had a negative day today:
- CAC 40 decreased 0.09 points or 0.00% to 6,558.38
- FTSE 100 decreased 33.53 points, or -0.47% to 7,091.19
- DAX 30 decreased 0.66 points or 0.00% to 15,788.98
The major Europe currency markets had a mixed day today:
- EURUSD increased 0.00564 or 0.48% to 1.18310
- GBPUSD increased 0.00473 or 0.34% to 1.38546
- USDCHF decreased 0.00434 or -0.47% to 0.91465
Some economic news from Europe today:
UK:
House Price Index (YoY) increased from 9.6% to 10.0%
Core CPI (YoY) (Jun) increased from 2.0% to 2.3%
Core CPI MoM (MoM) (Jun) decreased from 0.8% to 0.5%
Core PPI Output (MoM) (Jun) decreased from 0.7% to 0.3%
Core PPI Output (YoY) (Jun) increased from 2.3% to 2.7%
Core RPI (MoM) (Jun) increased from 0.3% to 0.7%
Core RPI (YoY) (Jun) increased from 3.4% to 3.9%
CPI (MoM) (Jun) decreased from 0.6% to 0.5%
CPI (YoY) (Jun) increased from 2.1% to 2.5%
CPI, n.s.a (Jun) decreased from 110.80 to 110.30
PPI Input (YoY) (Jun) decreased from 10.4% to 9.1%
PPI Input (MoM) (Jun) decreased from 1.2% to -0.1%
PPI Output (YoY) (Jun) decreased from 4.4% to 4.3%
PPI Output (MoM) (Jun) decreased from 0.8% to 0.4%
RPI (YoY) (Jun) increased from 3.3% to 3.9%
RPI (MoM) (Jun) increased from 0.3% to 0.7%
Spain:
Spanish CPI (YoY) (Jun) remain the same at 2.7%
Spanish CPI (MoM) (Jun) remain the same at 0.5%
Spanish HICP (YoY) (Jun) increased from 2.4% to 2.5%
Spanish HICP (MoM) (Jun) remain the same at 0.5%
Euro Zone:
Industrial Production (MoM) (May) decreased from 0.6% to -1.0%
Industrial Production (YoY) (May) decreased from 39.4% to 20.5%
US/AMERICAS:
Federal Reserve Chairman Jerome Powell said he does not see a need to revise the current monetary policy as the US economy is still recovering. Powell said the workforce has “a long way to go” before recovering, despite reaching an unemployment rate of 5.9% compared to the all-time pandemic high of 14.8%. “Job gains should be strong in coming months as public health conditions continue to improve and as some of the other pandemic-related factors currently weighing them down diminish,” the chairman stated.
While many analysts are concerned about rising inflation, Powell stated that he expects inflation to “remain elevated in coming months before moderating.” However, he believes that the current “noticeably higher” inflation rates are going to cool off. In terms of reigning in the Fed’s $120 billion monthly bond purchases, Powell stated that may be something the bank will reconsider. The Fed head acknowledged that the current tools “along with our strong guidance on interest rates and on our balance sheet, will ensure that monetary policy will continue to deliver powerful support to the economy until the recovery is complete.”
Inflation gauges continue to soar, with today’s Producer Price Index (PPI) reading for June indicating a 7.3% YoY increase. This is the second consecutive month that the PPI reached a record high. June’s figure rose 1% from the month prior, although estimates pinned 0.6%. The auto industry contributed widely to the unexpected jump after auto parts and autos jumped 10.5%. Trade services increased 2.1%, energy spiked 2.1%, and food increased 0.8%. As noted earlier, the Federal Reserve is not overly concerned about rising prices as they believe it will level in the coming months.
US Market Closings:
- Dow advanced 44.44 points or 0.13% to 34,933.23
- S&P 500 advanced 5.09 points or 0.12% to 4,374.3
- Nasdaq declined 32.7 points or -0.22% to 14,644.95
- Russell 2000 declined 36.51 points or -1.63% to 2,202.36
Canada Market Closings:
- TSX Composite declined 123.41 points or -0.61% to 20,147.24
- TSX 60 declined 8.28 points or -0.68% to 1,209.62
Brazil Market Closing:
- Bovespa advanced 238.77 points or 0.19% to 128,405.51
ENERGY:
The oil markets had a negative day today:
- Crude Oil decreased 2.22 USD/BBL or -2.95% to 73.0300
- Brent decreased 1.8 USD/BBL or -2.35% to 74.6900
- Natural gas decreased 0.037 USD/MMBtu or -1.00% to 3.6590
- Gasoline decreased 0.0263 USD/GAL or -1.13% to 2.2915
- Heating oil decreased 0.0428 USD/GAL or -1.96% to 2.1416
Top commodity gainers: Platinum (2.32%), Soybeans (2.07%), Wheat (2.70%), and Methanol (2.51%)
Top commodity losers: Crude Oil (-2.95%), Rubber (-2.76%), Brent (-2.35%), and Lumber (-8.33%)
The above data was collected around 15:00 EST on Wednesday.
BONDS:
Japan 0.017%(-1bp), US 2’s 0.23% (-0.024%), US 10’s 1.3543%(-6.4bps); US 30’s 1.9869%(-0.06%), Bunds -0.319% (-2bp), France 0.015% (-2bp), Italy 0.7149% (-1bp), Turkey 16.67% (-1bp), Greece 0.700% (-2bp), Portugal 0.284% (-2bp), Spain 0.309% (-2bp) and UK Gilts 0.630% (-0bp).
