Market Talk – July 8, 2021

Posted Jul 8, 2021 by Martin Armstrong |

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ASIA:

Japanese bank lending rose at its slowest annual pace in more than eight years in June as corporate fund demand to weather coronavirus-linked cash constraints subsided, central bank data showed on Thursday. Total deposits parked at commercial banks continued to rise and hit a fresh record last month, the data showed, as companies and households held off on spending. Total outstanding loans held by Japanese banks rose 1.4% in June from a year earlier to 578 trillion yen ($5.23 trillion), BOJ data showed, the slowest growth rate since January 2013. Total deposits held by banks stood at 834 trillion yen, hitting a fresh record.

The major Asian stock markets had a mixed day today:

NIKKEI 225 decreased 248.92 points or -0.88% to 28,118.03
Shanghai decreased 28.21 points or -0.79% to 3,525.50
Hang Seng decreased 807.49 or -2.89% to 27,153.13
ASX 200 increased 14.50 points or 0.20% to 7,341.40
Kospi decreased 32.66 points or -0.99% to 3,252.68
SENSEX decreased 485.82 points or -0.92% to 52,568.94
Nifty50 decreased 151.75 points or -0.96% to 15,727.90

The major Asian currency markets had a mixed day today:

AUDUSD decreased 0.00449 or -0.60% to 0.74397
NZDUSD decreased 0.00592 or -0.84% to 0.69551
USDJPY decreased 0.79 or -0.71% to 109.83
USDCNY increased 0.02179 or 0.34% to 6.49532

Precious Metals:

Gold decreased 4.11 USD/t oz. or -0.23% to 1,799.30
Silver decreased 0.191 USD/t. oz or -0.73% to 25.930

Some economic news from last night:

Japan:

Adjusted Current Account increased from 1.55T to 1.87T

Bank Lending (YoY) (Jun) decreased from 2.8% to 1.4%

Current Account n.s.a. (May) increased from 1.322T to 1.980T

Foreign Bonds Buying increased from -1,003.4B to -190.9B

Foreign Investments in Japanese Stocks decreased from -146.7B to -310.1B

Some economic news from today:

Japan:

Economy Watchers Current Index (Jun) increased from 38.1 to 47.6

Indonesia:

Consumer Confidence (Jun) increased from 104.4 to 107.4

EUROPE/EMEA:

European Central Bank (ECB) decided to revise its inflation target and allow consumer prices to overshoot when deemed necessary during its major policy review meeting on Thursday. The ECB currently works to achieve an inflation level of “below, but close to, 2%.” Going forward, the official inflation goal will become 2% with overshoots allowed. Speaking at a press conference on Thursday, ECB President Christine Lagarde said the new inflation target is “clear and easy to communicate.” The first regular monetary policy meeting of the Governing Council applying this new strategy will be held on July 22. Lagarde also said there would be a new policy review in 2025.

The major Europe stock markets had a negative day:

CAC 40 decreased 130.99 points or -2.01% to 6,396.73
FTSE 100 decreased 120.36 points or -1.68% to 7,030.66
DAX 30 decreased 272.07 points or -1.73% to 15,420.64

The major Europe currency markets had a mixed day today:

EURUSD increased 0.0041 or 0.35% to 1.18374
GBPUSD decreased 0.00259 or -0.19% to 1.37766
USDCHF decreased 0.00965 or -1.04% to 0.91583

Some economic news from Europe today:

Germany:

German Current Account Balance n.s.a (May) decreased from 21.3B to 13.1B

German Exports (MoM) (May) increased from 0.2% to 0.3%

German Imports (MoM) (May) increased from -1.4% to 3.4%

German Trade Balance (May) decreased from 15.6B to 12.6B

Swiss:

Unemployment Rate n.s.a. (Jun) decreased from 3.1% to 2.8%

Unemployment Rate s.a. (Jun) decreased from 3.2% to 3.1%

US/AMERICAS:

Initial jobless claims unexpectedly rose in the US last week, according to the Labor Department. First-time filings totaled 373,000 for the week ending on July 3, while analysts expected a rate of 350,000. The prior week’s level was revised upward to 371,000 compared to 364,000. Continuing claims, however, did decline by 145,000 to 3.34 million. This represents the lowest level of continuing unemployment claims since the pandemic began in March 2020.

Beginning in 2022, the state of Arizona will request a flat tax rate from residents. The state income tax will be 2.5%, which is expected to save the average taxpayer 13% annually. Those who earn over $250,000 will be subject to a tax rate of no more than 4.5%. Arizona Gov. Doug Ducey stated that every resident, regardless of earning level, will see a reduction in their taxes. Ducey said the state is able to offer this to residents due to their booming economy. “That means job creators will continue to choose our state to expand operations, working families will get to decide how they spend more of their hard-earned dollars, and those who served our nation will rightfully keep more of their own money,” the governor stated.

Wells Fargo announced that they will no longer offer customers personal lines of credit. The company offered personal loans from $3,000 to $10,000 but is closing all personal credit account indefinitely to “simplify” product offerings. “In an effort to simplify our product offerings, we’ve made the decision to no longer offer personal lines of credit as we feel we can better meet the borrowing needs of our customers through credit card and personal loan products,” the company stated. Current customers will receive a 60-day notice before their accounts are closed, and they will be expected to continue making fixed-rate payments with interest rates ranging from 9.5% to 21%.

US Market Closings:

Dow declined 259.86 points or -0.75% to 34,421.93
S&P 500 declined 37.31 points or -0.86% to 4,320.82
Nasdaq declined 105.28 points or -0.72% to 14,559.79
Russell 2000 declined 21.17 points or -0.94% to 2,231.68

Canada Market Closings:

TSX Composite declined 229.39 points or -1.13% to 20,061.21
TSX 60 declined 15.85 points or -1.3% to 1,202.82

Brazil Market Closing:

Bovespa declined 1,590.94 points or -1.25% to 125,427.77

ENERGY:

The oil markets had a green day today:

Crude Oil increased 0.44 USD/BBL or 0.61% to 72.6400
Brent increased 0.42 USD/BBL or 0.57% to 73.8500
Natural gas increased 0.092 USD/MMBtu or 2.56% to 3.6880
Gasoline increased 0.0296 USD/GAL or 1.34% to 2.2356
Heating oil increased 0.0199 USD/GAL or 0.95% to 2.1090

The above data was collected around 13:30 EST on Thursday

Top commodity gainers: Natural Gas (2.56%), Gasoline (1.34%), Rice (1.31%) and Coal (3.24%)
Top commodity losers: Oat (-6.63%), Sugar (-2.31%), Lumber (-8.59%), and Rubber (-1.77%)

The above data was collected around 13:35 EST on Thursday.

BONDS:

Japan 0.029%(-0bp), US 2’s 0.1944%(-0.02%), US 10’s 1.2945%(-2.84bps); US 30’s 1.9214%(-0.02%), Bunds -0.3120% (-2.3bp), France 0.0370% (-1bp), Italy 0.7629% (+2bp), Turkey 17.02% (+1bp), Greece 0.7680% (+4bp), Portugal 0.327% (+1bp); Spain 0.351% (+1bp) and UK Gilts 0.617% (+2bp).