Market Talk – March 5, 2021

by nyljaouadi1
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ASIA:

China is aiming for an economic growth rate above 6% in 2021. After scrapping its target last year, Chinese Premier Li Keqiang announced the target on Friday at the opening of this year’s National People’s Congress. The target marks a return to strong growth after the Covid-19 pandemic impacted the world’s second-largest economy. By some measures, the target appears modest, falling well below the International Monetary Fund’s estimated of 8.1% growth for China’s economy this year.

Morgan Stanley reported Indian state-owned banks are expected to see additions to bad loans moderate, but structural issues at the banks could cap returns on their stocks. Some of the country’s state-owned banks have long struggled with a pile of bad loans, prompting the government to pump in more funds to shore up their balance sheets. The brokerage preferred India’s largest lender, State Bank of India, as well as large private banks, expecting them to play a major role in the corporate recovery cycle.

The BRICS New Development Bank (NDB) announced Tuesday that it approved 7 billion yuan ($1.08 billion) of emergency assistance program loans to support China’s economic recovery from COVID-19. The loan is the second emergency loan approved by the NDB to help China fight the epidemic, following the same loan approved and disbursed last year. The program is to support the restoration of production activities and stable employment in the country and promote sustainable economic development, according to the bank.

The major Asian stock markets had a negative day today:

  • NIKKEI 225 decreased 65.79 points or -0.23% to 28,864.32
  • Shanghai decreased 1.50 points or -0.04% to 3,501.99
  • Hang Seng decreased 138.50 points or -0.47% to 29,098.29
  • ASX 200 decreased 49.90 points or -0.74% to 6,710.80
  • Kospi decreased 17.23 points or -0.57% to 3,026.26
  • SENSEX decreased 440.76 points or -0.87% to 50,405.32
  • Nifty50 decreased 142.65 points or -0.95% to 14,938.10

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00446 or -0.58% to 0.76699
  • NZDUSD decreased 0.00288 or -0.40% to 0.71502
  • USDJPY increased 0.31 or 0.29% to 108.27
  • USDCNY increased 0.02869 or 0.44% to 6.51906

 

Precious Metals:

  • Gold increased 2.15 USD/t oz. or 0.13% to 1,699.34
  • Silver decreased 0.209 USD/t. oz or -0.83% to 25.098

 

Some economic news from last night:

Japan:

Foreign Reserves (USD) (Feb) decreased from 1,392.1B to 1,379.4B

Australia:

AIG Services Index (Feb) increased from 54.3 to 55.8

Indonesia:

FX Reserves (USD) (Feb) increased from 138.00B to 138.80B

Some economic news from today:

India:

FX Reserves, USD increased from 583.87B to 584.55B

Hong Kong:

Foreign Reserves (USD) (Feb) increased from 493.20B to 495.90B

Singapore:

Retail Sales (MoM) (Jan) decreased from -1.0% to -1.8%

Retail Sales (YoY) (Jan) decreased from -3.3% to -6.1%

EUROPE/EMEA:

Britain’s economic growth will accelerate next year at the fastest rate since official records began as the economy rebounds by 7.3%, according to the government’s independent economic forecaster. The Office for Budget Responsibility said the economy would surge ahead in 2022 at the fastest pace since 1948. But the OBR warned that debts from the pandemic would cost the equivalent of £14,000 for every household as government borrowing hits a postwar high, according to figures that lay bare the impact of Covid-19 on the public finances. It said borrowing of £355bn in this financial year would push the annual spending deficit to 16.9% of GDP, its highest level since 1944-45. A further £243bn of borrowing next year will take the total to almost £600bn over two years.

The European Central Bank could tweak its coronavirus-related stimulus program, Germany’s central bank governor told CNBC. The ECB has tried to contain borrowing costs in the wake of the pandemic with the implementation of a government bond purchase program known as PEPP. But the recent moves in the bond market could jeopardize those efforts and lead to more action from the Frankfurt-based institution, Jens Weidmann, the governor of the Bundesbank said. Since it was first announced in March 2020, the ECB’s Pandemic Emergency Purchase Program has been extended in duration and quantity. It’s currently set to last until March 2022, totaling 1.85 trillion euros ($2.23 trillion). However, data has shown that the ECB’s debt purchases have fallen in recent weeks. Although the central bank has explained the drop on larger redemptions, analysts have questioned the reasons behind the decrease in net purchases.

The major Europe stock markets had a negative day:

  • CAC 40 decreased 48.00 points or -0.82% to 5,782.65
  • FTSE 100 decreased 20.36 points or -0.31% to 6,630.52
  • DAX 30 decreased 135.65 points or -0.97% to 13,920.69

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.0054 or -0.45% to 1.19125
  • GBPUSD decreased 0.00701 or -0.50% to 1.38239
  • USDCHF increased 0.00138 or 0.15% to 0.93075

Some economic news from Europe today:

Germany:

German Factory Orders (MoM) (Jan) increased from -2.2% to 1.4%

France:

French Current Account (Jan) decreased from -1.00B to -1.60B

French Exports (Jan) increased from 39.3B to 40.2B

French Imports (Jan) increased from 42.7B to 44.2B

French Trade Balance (Jan) decreased from -3.6B to -4.0B

UK:

Halifax House Price Index (YoY) decreased from 5.4% to 5.2%

Halifax House Price Index (MoM) (Feb) increased from -0.4% to -0.1%

Italy:

Italian Retail Sales (MoM) (Jan) decreased from 2.4% to -3.0%

Italian Retail Sales (YoY) (Jan) decreased from -3.2% to 6.8%

Spain:

Spanish Consumer Confidence increased from 55.7 to 65.9

US/AMERICAS:

The Labor Department released promising payroll data for last month, indicating that the job market is beginning to recover. Nonfarm payrolls rose by 379,000 in February, far surpassing Reuters’ analysts’ estimates of 182,000. In comparison, January’s figure was only 166,000. The unemployment rate in the US now stands at 6.2%, although the Federal Reserve believes this number is skewed lower.

The US trade gap increased to 1.9% in January, according to the Commerce Department. The figure reflects a $68.2 billion gap, slightly above analysts’ expectations of $67.5 billion. Imports on goods rose 1.6% or $221.1 billion, marking the highest spike on record. Exports rose 1.6% to $135.7 billion. Consumer spending reached a seven-month high during the first month of the year as well.

Available housing in the US decreased by half YoY in February, according to a report by CNBC. According to Redfin data, the lack of inventory has created a true sellers’ market with average home prices reaching $347,475. In fact, Redfin found that 55% of homes under contract sold within their first two weeks on the market during February.

The Canadian government approved the Johnson & Johnson COVID-19 vaccine for immediate use. Health Canada found the one-dose vaccination to be 66.9% effective in preventing moderate to severe coronavirus. Although Pfizer and Moderna both tout efficiency rates over 90%, Health Canada believes the Johnson & Johnson vaccination will prevent increased hospitalizations and deaths. This is the fourth available vaccine to combat coronavirus in Canada. However, many believe that the Trudeau administration has been slow to roll out their vaccination campaign.

US Market Closings:

  • Dow advanced 572.16 points or 1.85% to 31,496.3
  • S&P 500 advanced 73.47 points or 1.95% to 3,841.94
  • Nasdaq advanced 196.68 points or 1.55% to 12,920.15
  • Russell 2000 advanced 45.29 points or 2.11% to 2,192.21

Canada Market Closings:

  • TSX Composite advanced 255.24 points or 1.41% to 18,380.96
  • TSX 60 advanced 17.03 points or 1.58% to 1,096.72

Brazil Market Closing:

  • Bovespa advanced 2,512.06 points or 2.23% to 115,202.23

ENERGY:

The oil markets had a mixed day today:

 

  • Crude Oil increased 2.13 USD/BBL or 3.34 % to 65.9600
  • Brent increased 2.4 USD/BBL or 3.60% to 69.1400
  • Natural gas decreased 0.058 USD/MMBtu or -2.11% to 2.6880
  • Gasoline increased 0.0545 USD/GAL or 2.73% to 2.0524
  • Heating oil increased 0.0394 USD/GAL or 2.08% to 1.9354

 

  • Top commodity gainers: Copper (3.69%), Brent (3.60%), Bitumen (4.05%) and Tin (4.14%)
  • Top commodity losers: Iron Ore 62% fe (-1.04%), Coffee (-2.02%), Lumber (-0.61%), and Natural Gas (-2.11%)

The above data was collected around 13:11 EST on Friday.

BONDS:

Japan 0.09%(-4bp), US 2’s 0.14%(-0.002%), US 10’s 1.55%(-0bps); US 30’s 2.28%(-0.028%), Bunds -0.30% (+5bp), France -0.03% (+3bp), Italy 0.75% (-0bp), Turkey 13.43% (+16bp), Greece 0.97% (-0bp), Portugal 0.30% (+2bp); Spain 0.40% (+1bp) and UK Gilts 0.74% (+1bp).

 

« Market Talk – March 4, 2021



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