Market Talk – June 18, 2021

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ASIA:

The Bank of Japan is expected to maintain its massive stimulus and may extend a deadline for its pandemic-relief program on Friday, in a sign that a fragile economy and tepid inflation will keep any exit from its ultra-easy policy a long way off. The decision would come in the wake of hawkish signals from the U.S. Federal Reserve on Wednesday that heightened prospects of an earlier-than-expected interest rate hike. In a two-day meeting ending on Friday, the BOJ is set to keep its yield curve control target at -0.1% for short-term rates and 0% for 10-year bond yields.

India has put on hold a proposal to reduce import duties on edible oils as cooking oil prices started to fall in the world market after hitting record highs, Reuters reported. The world’s biggest vegetable oil importer was considering reducing duties after domestic soy oil and palm oil prices more than doubled in the past year, hitting consumers already stung by record fuel prices and reduced incomes amid the COVID-19 pandemic.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 54.25 points or -0.19% to 28,964.08
  • Shanghai decreased 0.51 points or -0.01% to 3,525.10
  • Hang Seng increased 242.68 points or 0.85% to 28,801.27
  • ASX 200 increased 9.90 points or 0.13% to 7,368.90
  • Kospi increased 2.97 points or 0.09% to 3,267.93
  • SENSEX increased 21.12 points or 0.04% to 52,344.45
  • Nifty50 decreased 8.05 points or -0.05% to 15,683.35

 

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00580 or -0.77% to 0.74995
  • NZDUSD decreased 0.00740 or -1.05% to 0.69419
  • USDJPY decreased 0.09300 or -0.08% to 110.22
  • USDCNY increased 0.00430 or 0.07% to 6.45795

 

Precious Metals:

  • Gold increased 0.48 USD/t oz. or 0.03% to 1,773.79
  • Silver increased 0.04 USD/t. oz or 0.16% to 25.961

 

Some economic news from last night:

China:

China Thomson Reuters IPSOS PCSI (Jun) increased from 71.78 to 72.80

Japan:

BoJ Interest Rate Decision remain the same at -0.10%

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

National Core CPI (YoY) (May) increased from -0.1% to 0.1%

National CPI (YoY) (May) increased from -0.4% to -0.1%

National CPI (MoM) increased from -0.4% to 0.3%

Thomson Reuters IPSOS PCSI (Jun) increased from 36.30 to 38.10

 

Some economic news from today:

India:

Bank Loan Growth decreased from 6.0% to 5.7%

Deposit Growth remain the same at 9.7%

FX Reserves, USD increased from 605.01B to 608.08B

M3 Money Supply remain the same at 9.9%

Indonesia:

Car Sales (YoY) increased from 902.90% to 1,443.60%

Motorbike Sales (YoY) (May) increased from 282.00% to 1,065.70%

 

EUROPE/EMEA:

Tesco, Britain’s biggest retailer, reported a sharp slowdown in underlying U.K. sales growth in its first quarter, reflecting a tough comparison with the same quarter last year when the country was in the grip of its first Covid-19 lockdown. Comparing the quarter with the same quarter in 2019, before the pandemic impacted trading, U.K. like-for-like sales were up 9.3%. Tesco, which has a 27% share of Britain’s grocery market, maintained its profit guidance for the full 2021-22 year. Tesco has guided to full year retail operating profit on a continuing operations basis in 2021-22 to be at a similar level to 2019-20′s outcome.

Britain’s economy will bounce back to its pre-Covid level by the end of the year, despite a delay to the end of lockdown restrictions, economists said today. The CBI has upgraded its latest forecast for the UK economy, predicting GDP growth of 8.2 per cent this year, up from a previous forecast of 6 per cent. Economic growth this summer will be driven by pent-up consumer demand and a surge in spending after savings were amassed during lockdowns, as well as improving household incomes, the CBI said. The latest report said household spending will fuel just over a quarter of GDP growth in 2021, and 70 per cent of growth in 2022.

 

The major Europe stock markets had a negative day:

  • CAC 40 decreased 97.10 points or -1.46% to 6,569.16
  • FTSE 100 decreased 135.96 points or -1.90% to 7,017.47
  • DAX 30 decreased 279.63 points or -1.78% to 15,448.04

 

 

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00340 or -0.29% to 1.18777
  • GBPUSD decreased 0.01200 or -0.86% to 1.38167
  • USDCHF increased 0.00360 or 0.40% to 0.92145

 

Some economic news from Europe today:

UK:

Core Retail Sales (MoM) (May) decreased from 9.1% to -2.1%

Core Retail Sales (YoY) (May) decreased from 37.7% to 21.7%

Retail Sales (YoY) (May) decreased from 42.4% to 24.6%

Retail Sales (MoM) (May) decreased from 9.2% to -1.4%

Inflation Expectations decreased from 2.7% to 2.4%

Germany:

German PPI (MoM) (May) increased from 0.8% to 1.5%

German PPI (YoY) (May) increased from 5.2% to 7.2%

Euro Zone:

Current Account (Apr) increased from 17.8B to 22.8B

Current Account n.s.a. (Apr) increased from 31.0B to 31.4B

US/AMERICAS:

St. Louis Federal Reserve President James Bullard believes the central bank will raise rates as soon as next year, outpacing most estimates of a rate increase in 2023. Bullard remains optimistic that the US economy will quickly recover. He predicts that inflation will hit 3% this year before declining to 2.5% and then stabilizing at the Fed’s target of 2%. “If that’s what you think is going to happen, then by the time you get to the end of 2022, you’d already have two years of two-and-a-half to 3% inflation. To me, that would meet our new framework where we said we’re going to allow inflation to run above target for some time, and from there we could bring inflation down to 2% over the subsequent horizon,” the bank president commented. Still, he remains skeptical due to highly volatile economic conditions.

Tomorrow marks the first official celebration of “Juneteenth,” honoring the day that slaves were freed in the United States. Joe Biden signed the bill into law, marking the first new federal holiday since President Reagan approved of Martin Luther King Jr. Day in 1983. The New York Stock exchange will not close for the holiday in 2021, however, there are discussions of closing the markets to observe the holiday as soon as 2022.

Gov. John Bel Edwards of Louisiana became the first Democratic governor to end enhanced unemployment pandemic benefits. Twenty-five additional states, all Republican led, will also prematurely end weekly unemployment bonuses before the official September 6 deadline. A number of analysts believe ending this program will encourage people to go back to the workforce amid a labor shortage. Although numerous Democratic lawmakers are urging the Biden Administration to extend the enhanced benefits, President Biden is in favor of ending the program in September. “A temporary boost in unemployment benefits that we enacted helped people who lost their jobs through no fault of their own, and who still may be in the process of getting vaccinated… But it’s going to expire in 90 days — it makes sense it expires in 90 days,” President Biden stated at the beginning of June.

US Market Closings:

  • Dow declined 533.37 points or -1.58% to 33,290.08
  • S&P 500 declined 55.42 points or -1.31% to 4,166.44
  • Nasdaq declined 130.97 points or -0.92% to 14,030.38
  • Russell 2000 declined 49.71 points or -2.17% to 2,237.75

 

Canada Market Closings:

  • TSX Composite declined 144.45 points or -0.72% to 19,999.59
  • TSX 60 declined 8.2 points or -0.68% to 1,201.65

 

Brazil Market Closing:

  • Bovespa advanced 348.13 points or 0.27% to 128,405.35

 

ENERGY:

 

The oil markets had a mixed day today:

 

  • Crude Oil increased 0.58 USD/BBL or 0.82% to 71.6200
  • Brent increased 0.39 USD/BBL or 0.53% to 73.4700
  • Natural gas decreased 0.025 USD/MMBtu or -0.77% to 3.2280
  • Gasoline increased 0.0155 USD/GAL or 0.73% to 2.1497
  • Heating oil increased 0.0264 USD/GAL or 1.28% to 2.0932

 

The above data was collected around 12:45 EST on Friday

 

 

  • Top commodity gainers: Soybeans (5.25%), Wheat (4.26%), Oat (1.50%) and Corn (4.27%)
  • Top commodity losers: Bitumen (-2.91%), Zinc (-1.28%), Lumber (-2.31%), and platinum (-1.70%)

 

The above data was collected around 12:59 EST on Friday.

BONDS:

Japan 0.054%(-1bp), US 2’s 0.2702%(+0.06%), US 10’s 1.4600%(-5.1bps); US 30’s 2.0313%(-0.07%), Bunds -0.1970% (-0.7bp), France 0.17% (+0.9bp), Italy 0.8809% (+5.86bp), Turkey 17.23% (-10bp), Greece 0.8220% (+2.6bp), Portugal 0.457% (+4.2bp); Spain 0.4620% (+2.92bp) and UK Gilts 0.757% (-2.1bp).

 

« Market Talk – June 17, 2021



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