Market Talk – January 29, 2021

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ASIA:

China has warned Taiwan that any attempt to seek independence “means war.” The warning comes days after China stepped up its military activities and flew warplanes near the island. This reaction from China came after new US President Joe Biden reaffirmed his commitment to Taiwan, and set out his stance in Asia. The US has called China’s latest warning “unfortunate”, adding that tensions did not need to lead to “anything like confrontation.” China sees democratic Taiwan as a breakaway province, but Taiwan sees itself as a sovereign state, with its own constitution, military, and elected leaders.

India’s gold consumption is expected to rebound in 2021 after falling to its lowest in 26 years last year as pent-up demand and higher economic growth are seen boosting sales, the World Gold Council (WGC) said on Thursday. Coronavirus led-lockdowns slashed India’s gold demand by 35% in 2020 to 446.4 tonnes, the lowest since 1994, the WGC said in a report published on Thursday. Higher purchases by the world’s second-biggest bullion consumer could support gold prices, which hit a record high last year, although that could increase India’s trade deficit and weigh on the ailing rupee.

The major Asian stock markets had a negative day today:

  • NIKKEI 225 decreased 534.03 points or -1.89% to 27,663.39
  • Shanghai decreased 22.11 points or -0.63% to 3,483.07
  • Hang Seng decreased 267.06 points or -0.94% to 28,283.71
  • ASX 200 decreased 42.30 points or -0.64% to 6,607.40
  • Kospi decreased 92.84 points or -3.03% to 2,976.21
  • SENSEX decreased 588.59 points or -1.26% to 46,285.77
  • Nifty50 decreased 182.95 points or -1.32% to 13,634.60

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00145 or -0.19% to 0.76618
  • NZDUSD increased 0.00168 or 0.23% to 0.71935
  • USDJPY increased 0.45 or 0.43% to 104.73
  • USDCNY decreased 0.02727 or -0.42% to 6.44503

Precious Metals:

  • Gold increased 11.75 USD/t oz. or 0.64% to 1,852.11
  • Silver increased 0.757 USD/t. oz or 2.87% to 27.127

 

Some economic news from last night:

Japan:

Jobs/applications ratio (Dec) remain the same at 1.06

Tokyo Core CPI (YoY) (Jan) increased from -0.9% to -0.4%

Tokyo CPI (YoY) (Jan) increased from -1.3% to -0.5%

CPI Tokyo Ex Food and Energy (MoM) (Jan) increased from -0.1% to 0.2%

Unemployment Rate (Dec) remain the same at 2.9%

Industrial Production (MoM) (Dec) decreased from -0.5% to -1.6%

Industrial Production forecast 1m ahead (MoM) (Jan) increased from -1.1% to 8.9%

Industrial Production forecast 2m ahead (MoM) (Feb) decreased from 7.1% to -0.3%

South Korea:

Industrial Production (YoY) (Dec) increased from 0.5% to 3.4%

Industrial Production (MoM) (Dec) increased from 0.3% to 3.7%

Retail Sales (MoM) increased from -0.9% to 0.2%

Service Sector Output (MoM) (Dec) decreased from 0.7% to -1.1%

Australia:

Housing Credit (Dec) increased from 0.3% to 0.4%

PPI (YoY) (Q4) increased from -0.4% to -0.1%

PPI (QoQ) (Q4) increased from 0.4% to 0.5%

Private Sector Credit (MoM) (Dec) increased from 0.1% to 0.3%

Singapore:

Bank Lending (Dec) increased from 676.7B to 678.7B

 

Some economic news from today:

India:

Federal Fiscal Deficit (Dec) increased from 10,755.07B to 11,584.69B

Bank Loan Growth decreased from 6.7% to 6.4%

Deposit Growth decreased from 11.5% to 11.4%

FX Reserves, USD increased from 584.24B to 585.33B

GDP Annual decreased from 4.2% to 4.0%

Infrastructure Output (YoY) (Dec) increased from -1.4% to -1.3%

Japan:

Household Confidence (Jan) decreased from 31.8 to 29.6

Housing Starts (YoY) (Dec) decreased from -3.7% to -9.0%

Construction Orders (YoY) (Dec) increased from -4.7% to -1.3%

Hong Kong:

GDP (YoY) increased from -3.5% to -3.0%

M3 Money Supply (Dec) remain the same at 6.5%

Singapore:

Business Expectations (Q4) increased from -3.00 to 32.00

EUROPE/EMEA:

The International Monetary Fund has downgraded forecasts for the UK’s recovery this year while the expansion of the global economy, aided by accelerating vaccine rollouts, is expected to gather pace. Illustrating the severe impact of the pandemic on the UK economy, the IMF said in its latest forecast that the UK’s national income, or GDP, would expand by 4.5% this year, down 1.4 percentage points from the 5.9% growth forecast made last October. It follows an estimated contraction in UK GDP of 10% in 2020, the biggest fall of any G7 country.

Britain’s economy is suffering the most damage since the first wave of Covid-19 as persistently high infection rates and renewed lockdown measures delay the economic recovery from the pandemic, according to a Guardian analysis. Almost a year since the pandemic spread to Europe, the focus is shifting towards how quickly coronavirus vaccines can be deployed, with the UK, for now, among countries leading the pack. Economists said this could increase the likelihood of the British economy outperforming other countries later this spring, depending on when lockdown restrictions are lifted.

Vaccine manufacturer Moderna has told Italy and France it will deliver fewer doses than expected in February, in another blow to struggling coronavirus vaccination plans in the EU. Domenico Arcuri, the Italian special commissioner in charge of Italy’s pandemic response, said Moderna had told Rome that delivery volumes would be 20 per cent less than planned from early February. France’s ministry of health said it was now expecting 25 per cent fewer doses from the US biotech than had originally been scheduled next month.

The major European stock markets had a negative day:

  • CAC 40 decreased 111.31 points or -2.02% to 5,399.21
  • FTSE 100 decreased 118.69 points or -1.82% to 6,407.46
  • DAX 30 decreased 233.06 points or -1.71% to 13,432.87

 

The major European currency markets had a mixed day today:

  • EURUSD increased 0.00073 or 0.06% to 1.21313
  • GBPUSD decreased 0.00167 or -0.12% to 1.37107
  • USDCHF increased 0.00199 or 0.22% to 0.89046

Some economic news from Europe today:

France:

French Consumer Spending (MoM) (Dec) increased from -18.0% to 23.0%

French GDP (QoQ) (Q4) decreased from 18.5% to -1.3%

French PPI (MoM) (Dec) decreased from 1.7% to 0.8%

Germany:

German Import Price Index (MoM) (Dec) increased from 0.5% to 0.6%

German Import Price Index (YoY) (Dec) increased from -3.8% to -3.4%

German Unemployment Change (Jan) decreased from -40K to -41K

German Unemployment Rate (Jan) remain the same at 6.0%

German Unemployment (Jan) decreased from 2.770M to 2.729M

German Unemployment n.s.a. (Jan) increased from 2.707M to 2.901M

German GDP (QoQ) (Q4) decreased from 8.5% to 0.1%

German GDP (YoY) (Q4) increased from -3.9% to -2.9%

Swiss:

KOF Leading Indicators (Jan) decreased from 104.1 to 96.5

Norway:

Credit Indicator (YoY) (Dec) increased from 4.7% to 4.8%

Central Bank Currency Purchase (Feb) decreased from -800.0M to -1,700.0M

Unemployment Change (Jan) increased from 124.31K to 128.10K

Unemployment Rate n.s.a. (Jan) increased from 3.80% to 4.40%

Spain:

Spanish CPI (MoM) decreased from 0.2% to 0.1%

Spanish CPI (YoY) increased from -0.5% to 0.6%

Spanish GDP (QoQ) (Q4) decreased from 16.4% to 0.4%

Spanish GDP (YoY) (Q4) decreased from -9.0% to -9.1%

Spanish HICP (MoM) decreased from 0.2% to -0.3%

Spanish HICP (YoY) (Jan) increased from -0.6% to 0.6%

Spanish Retail Sales (YoY) (Dec) increased from -3.9% to -1.5%

Spanish Current account (Nov) increased from 1.29B to 3.34B

Italy:

Italian PPI (YoY) (Dec) increased from -2.3% to -1.8%

Italian PPI (MoM) (Dec) increased from -0.2% to 0.5%

Euro Zone:

M3 Money Supply (YoY) (Dec) increased from 11.0% to 12.3%

Loans to Non Financial Corporations (Dec) increased from 6.9% to 7.0%

Private Sector Loans (YoY) remain the same at 3.1%

US/AMERICAS:

Johnson & Johnson (J&J) announced that it has developed a coronavirus vaccine with a 66% effective rate. The Food and Drug Administration (FDA) previously stated it would approve vaccines with an effective rate above 50%. Although J&J’s vaccine is less likely to prevent the virus than competitors, it only requires one dosage.

The busiest shipping import in the US, located in Los Angeles, California, is experiencing extreme traffic and causing delays. At least 38 container ships are waiting to dock and unload supplies, according to the Marine Exchange of Southern California. Those in the industry claim that this will not be a short-term fix, and a major logistical shakeup will likely incur.

The US Securities and Exchange Commission is investigating both retail buyers and hedge funds for potential market manipulation “The Commission will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities,” the SEC added, nodding to a probe into Robinhood’s practices. After receiving backlash from retail investors and lawmakers, Robinhood permitted limited trading on 12 stocks that they removed from their platform, most notably GameStop.

Citron will cease publishing short-seller research in response to this week’s battle over GameStop. “When we started Citron, it was to be against the establishment, but now we’ve actually become the establishment,” founder Andrew Left commented this Friday. Citadel is receiving social media backlash after accusations that it influenced Robinhood’s decision to discontinue buys of “Reddit stocks.” Additionally, Citadel and Point72 Asset Management provided Melvin Capital hedge fund a $1 billion bail out this Monday in response to the specific attack against Melvin’s bet against GameStop that prompted retail investors to buy and hold the stock.

US Market Closings:

  • Dow declined 620.68 points or -2.03% to 29,982.68
  • S&P 500 declined 73.15 points or -1.93% to 3,714.23
  • Nasdaq declined 266.46 points or -2% to 13,070.7
  • Russell 2000 declined 32.97 points or -1.57% to 2,073.64

Canada Market Closings:

  • TSX Composite declined 320.18 points or -1.81% to 17,337.02
  • TSX 60 declined 20.22 points or -1.93% to 1,026.6

Brazil Market Closing:

  • Bovespa declined 3,815.16 points or -3.21% to 115,068.09

ENERGY:

The oil markets had a mixed day today:

  • Crude Oil decreased 0.06 USD/BBL or -0.11% to 52.2800
  • Brent increased 0.37 USD/BBL or 0.67% to 55.9000
  • Natural gas decreased 0.073 USD/MMBtu or -2.74% to 2.5910
  • Gasoline decreased 0.0089 USD/GAL or -0.56% to 1.5740
  • Heating oil decreased 0.0007 USD/GAL or -0.04% to 1.6010
  • Top commodity gainers: Silver (2.87%), Wheat (2.55%), Rubber (3.13%) and Corn (2.29%)
  • Top commodity losers: Palladium (-4.57%), Orange Juice (-2.25%), Lumber (-2.52%), and Natural Gas (-2.74%)

The above data was collected around 14:22 EST on Friday.

BONDS:

Japan 0.06%(+2bp), US 2’s 0.11%(-0.008%), US 10’s 1.08%(+2bps); US 30’s 1.85%(+0.028%), Bunds -0.54% (+3bp), France -0.28% (+2bp), Italy 0.66% (+2bp), Turkey 12.57% (+3bp), Greece 0.69% (-1bp), Portugal 0.06% (+3bp); Spain 0.10% (+2bp) and UK Gilts 0.32% (+3bp).

 

« Market Talk – January 28, 2021



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