Market Talk – January 22, 2021

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ASIA:

Barring another wave of COVID-19 infections, the worst is over for India’s economy and policymakers may soon have more room to support a recovery, the central bank said in its January bulletin released on Thursday. The RBI slashed interest rates early last year to cushion the shock from the coronavirus crisis, but has left rates unchanged in recent months, cautious of rising inflation. The RBI expects Asia’s third-largest economy to contract by 7.5% in the current fiscal year to March, but analysts believe it is likely to escape recession and see modest growth in the current quarter.

Japan’s core consumer prices slumped in December at the fastest annual pace in a decade, a sign of intensifying deflationary pressures that sharpen the case for the central bank to come up with better ways to combat the deepening impact of the COVID-19 pandemic. The nationwide core consumer price index (CPI), which includes oil but excludes fresh food costs, fell 1.0% in December from a year earlier, government data showed, slightly less than a median market forecast for a 1.1% drop. It was the biggest annual fall since September 2010, when Japan was grappling with grinding deflation and a spike in the yen that dealt a severe blow to the export-reliant economy.

 

The major Asian stock markets had a negative day today:

  • NIKKEI 225 decreased 125.41 points or -0.44% to 28,631.45
  • Shanghai decreased 14.51 points or -0.40% to 3,606.75
  • Hang Seng decreased 479.91 points or -1.60% to 29,447.85
  • ASX 200 decreased 23.30 points or -0.34% to 6,800.40
  • Kospi decreased 20.21 points or -0.64% to 3,140.63
  • SENSEX decreased 746.22 points or -1.50% to 48,878.54
  • Nifty50 decreased 218.45 points or -1.50% to 14,371.90

 

 

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00408 or -0.53% to 0.77207
  • NZDUSD decreased 0.00364 or -0.50% to 0.71807
  • USDJPY increased 0.26 or 0.25% to 103.78
  • USDCNY increased 0.02852 or 0.44% to 6.49361

 

Precious Metals:

  • Gold decreased 15.42 USD/t oz. or -0.82% to 1,854.49
  • Silver decreased 0.48 USD/t. oz or -1.83% to 25.470

 

Some economic news from last night:

Japan:

CPI, n.s.a (MoM) (Dec) increased from -0.5% to -0.3%

National Core CPI (YoY) (Dec) decreased from -0.9% to -1.0%

National CPI (YoY) (Dec) decreased from -0.9% to -1.2%

Manufacturing PMI (Jan) decreased from 50.0 to 49.7

Services PMI (Jan) decreased from 47.2 to 45.7

Australia:

Manufacturing PMI increased from 55.7 to 57.2

Services PMI decreased from 57.0 to 55.8

Retail Sales (MoM) decreased from 7.1% to -4.2%

New Zealand:

Business NZ PMI (Dec) decreased from 55.3 to 48.7

CPI (QoQ) (Q4) decreased from 0.7% to 0.5%

CPI (YoY) (Q4) remain the same at 1.4%

Singapore:

URA Property Index (QoQ) (Q4) remain the same at 2.10%

Indonesia:

M2 Money Supply (YoY) (Nov) decreased from 12.50% to 12.40%

 

Some economic news from today:

India:

FX Reserves, USD decreased from 586.08B to 584.24B

 

EUROPE/EMEA:

Japanese car maker Nissan has told the BBC its Sunderland plant is secure for the long term as a result of the trade deal reached between the UK and the EU. It said it will move additional battery production close to the plant where it has 6,000 direct employees and supports nearly 70,000 jobs in the supply chain. Manufacturing the more powerful batteries in the UK will ensure its cars comply with trade rules agreed with the EU, requiring at least 55% of the car’s value to be derived from either the UK or the EU to qualify for zero tariffs when exported to the EU.

Germany’s current account surplus shrank for the fifth year in a row in 2020 as China overtook Europe’s biggest economy during the COVID-19 pandemic to run the world’s largest current account surplus, a survey by the Ifo institute showed on Friday. The data underlines a tectonic shift in world trade triggered by the coronavirus crisis as higher demand across the globe for medical protection gear and electronic devices boosted Chinese exports. Germany’s current account surplus shrank to $261 billion in 2020 as demand for cars, machinery and equipment fell in many of its key export markets, the survey showed. Japan came in third with a current account surplus of $158 billion.

The major Europe stock markets had a negative day:

  • CAC 40 decreased 31.22 points or -0.56% to 5,559.57
  • FTSE 100 decreased 20.35 points or -0.30% to 6,695.07
  • DAX 30 decreased 32.70 points or -0.24% to 13,873.97

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00077 or 0.06% to 1.21747
  • GBPUSD decreased 0.0054 or -0.39% to 1.36770
  • USDCHF increased 0.00015 or 0.02% to 0.88540

 

Some economic news from Europe today:

UK:

GfK Consumer Confidence (Jan) decreased from -26 to -28

Core Retail Sales (MoM) (Dec) increased from -3.0% to 0.4%

Core Retail Sales (YoY) (Dec) increased from 5.3% to 6.4%

Public Sector Net Borrowing (Dec) increased from 25.42B to 33.38B

Public Sector Net Cash Requirement (Dec) increased from 23.572B to 40.644B

Retail Sales (MoM) (Dec) increased from -4.1% to 0.3%

Retail Sales (YoY) (Dec) increased from 2.1% to 2.9%

Composite PMI (Jan) decreased from 50.4 to 40.6

Manufacturing PMI (Jan) decreased from 57.5 to 52.9

Services PMI (Jan) decreased from 49.4 to 38.8

France:

French Manufacturing PMI (Jan) increased from 51.1 to 51.5

French Markit Composite PMI (Jan) decreased from 49.5 to 47.0

French Services PMI (Jan) decreased from 49.1 to 46.5

Germany:

German Composite PMI (Jan) decreased from 52.0 to 50.8

German Manufacturing PMI (Jan) decreased from 58.3 to 57.0

German Services PMI (Jan) decreased from 47.0 to 46.8

Euro Zone:

Manufacturing PMI (Jan) decreased from 55.2 to 54.7

Markit Composite PMI (Jan) decreased from 49.1 to 47.5

Services PMI (Jan) decreased from 46.4 to 45.0

US/AMERICAS:

China seems to be appealing for a better relationship with the US under the Biden administration. Despite sanctioning 28 politicians after the inauguration, Foreign Ministry spokeswoman Hua Chunying called the transition of power “a new day for US…we wish the same for China-US relations.” Chunying claims that US-China relations were strained under the Trump administration and “caused severe difficulties in China-US relations by meddling in China’s internal affairs and undermining China’s sovereignty, security and development interests.” Considering that the US is investigating China’s treatment of minority Muslims and backs Hong Kong sovereignty, it does not appear that the new administration will cease “meddling in China’s internal affairs.”

Janet Yellen is officially the new Treasury secretary after a unanimous vote by the Senate Finance Committee. Although Republicans expressed concerns about future stimulus spending and ignoring the growing deficit, Yellen was appointed in a 26-0 vote. During questioning, Yellen stated that she would support Biden’s $1.9 trillion coronavirus relief plan, and will additionally consider raising taxes on corporations, sole proprietorships, and corporations.

According to CNBC, 14 million Americans are past due on their rent payments, but help may be on the way. States may soon receive $25 billion in federal rental assistance through the Emergency Rental Assistance Program. To qualify, an individual’s income may not exceed 80% of their region’s median income and at least one member of a household must show significant income lost due to the pandemic. Homeowners behind on mortgage payments will not be eligible for the program.

New York Governor Cuomo admitted that his state could not handle its $15 billion deficit, and it proposing raising taxes on the wealthy to cover expenses. In fact, Cuomo’s proposal would be the highest income tax in the nation with the highest earners paying as much as 14.7%.

US Market Closings:

  • Dow declined 179.03 points or -0.57% to 30,996.98
  • S&P 500 declined 11.6 points or -0.3% to 3,841.47
  • Nasdaq advanced 12.15 points or 0.09% to 13,543.06
  • Russell 2000 advanced 27.34 points or 1.28% to 2,168.76

Canada Market Closings:

  • TSX Composite declined 70.29 points or -0.39% to 17,845.91
  • TSX 60 declined 4.44 points or -0.42% to 1,058.57

Brazil Market Closing:

  • Bovespa declined 816.4 points or -0.69% to 117,512.59

ENERGY:

The oil markets had a negative day today:

  • Crude Oil decreased 0.59 USD/BBL or -1.11% to 52.5400
  • Brent decreased 0.54 USD/BBL or -0.96% to 55.5600
  • Natural gas decreased 0.051 USD/MMBtu or -2.05% to 2.4400
  • Gasoline decreased 0.0032 USD/GAL or -0.21% to 1.5447
  • Heating oil decreased 0.0176 USD/GAL or -1.10% to 1.5830
  • Top commodity gainers: Feeder Cattle (1.09%), Lumber (6.42%), Live Cattle (1.95%) and Lean Hogs (1.84%)
  • Top commodity losers: Bitumen (-2.14%), Soybeans (-2.38%), Wheat (-2.99%), and Corn (-2.81%)

The above data was collected around 12:22 EST on Friday.

BONDS:

Japan 0.05%(+1bp), US 2’s 0.12%(-0.004%), US 10’s 1.09%(-2bps); US 30’s 2.00%(-0.02%), Bunds -0.50% (+3bp), France -0.26% (+1bp), Italy 0.72% (+7bp), Turkey 12.97% (+3bp), Greece 0.70% (+5bp), Portugal 0.07% (-1bp); Spain 0.14% (+1bp) and UK Gilts 0.30% (-3bp).

 

« Market Talk – January 21, 2021



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