Market Talk – April 20, 2021

Posted Apr 20, 2021 by Martin Armstrong |

Spread the love

ASIA:

China on Tuesday kept the one-year loan prime rate (LPR) unchanged at 3.85% and five-year LPR at 4.65%. That was in line with predictions from a majority of traders and analysts in a Reuters poll, who had expected no change to either the one-year or five-year LPR.

India will waive its 10% customs duty on imported COVID-19 vaccines as it tries to boost supplies to counter a dramatic surge in coronavirus cases, Reuters reported. Imports of Russia’s Sputnik V vaccine are due to arrive soon and the government has also urged Pfizer, Moderna and Johnson & Johnson to sell their products to India. Indian government is also considering allowing private entities to import approved vaccines for sale on the open market without government intervention. They could also be given the freedom to set pricing.

India’s Prime Minister Narendra announced a lockdown should be used as last resort to control the spike in coronavirus cases in the country. In his address to the nation, Prime Minister Narendra Modi today urged state governments to implement lockdowns only as a last-resort measure amid a deadly second wave of COVID-19. On the shortage of oxygen, Modi said that the central government is working on increasing supply and ramping up pharmaceutical production.

The major Asian stock markets had a mixed day today:

NIKKEI 225 decreased 584.99 points or -1.97% to 29,100.38
Shanghai decreased 4.61 points or -0.13% to 3,472.94
Hang Seng increased 29.58 points or 0.10% to 29,135.73
ASX 200 decreased 47.80 points or -0.68% to 7,017.80
Kospi increased 21.86 points or 0.68% to 3,220.70
SENSEX decreased 243.62 points or -0.51% to 47,705.80
Nifty50 decreased 63.05 points or -0.44% to 14,296.40

The major Asian currency markets had a negative day today:

AUDUSD decreased 0.00254 or -0.33% to 0.77395
NZDUSD decreased 0.00056 or -0.08% to 0.71823
USDJPY decreased 0.03 or -0.03% to 108.08
USDCNY decreased 0.00691 or -0.11% to 6.50061

Precious Metals:

Gold increased 8.28 USD/t oz. or 0.47% to 1,777.59
Silver increased 0.1 USD/t. oz or 0.39% to 25.910

Some economic news from last night:

China:

PBoC Loan Prime Rate remain the same at 3.85%

New Zealand:

RBNZ Offshore Holdings (Mar) decreased from 47.50% to 47.00%

Some economic news from today:

Japan:

Tertiary Industry Activity Index (MoM) increased from -1.0% to 0.3%

New Zealand:

GlobalDairyTrade Price Index decreased from 0.3% to -0.1%

Indonesia:

Deposit Facility Rate (Apr) remain the same at 2.75%

Lending Facility Rate (Apr) remain the same at 4.25%

Loans (YoY) (Mar) decreased from -2.15% to -4.13%

Interest Rate Decision remain the same at 3.50%

EUROPE/EMEA:

Britain on Tuesday eased controls designed to prevent a backlog of trucks in southern England caused by new post-Brexit paperwork, saying vehicles taking goods to the European Union would no longer need a special permit to enter the port region. The government said the relaxation showed goods transport companies had adapted to the new requirements, and were arriving at the border fully prepared. The government said freight volumes between Britain and the EU were operating at normal levels and cited official data showing a 46% increase in exports in February.

Rolls-Royce has started building what is claimed to be the world’s largest aerospace engine that promises to make flights greener. The ‘green’ engine is being built at the British company’s DemoWorks facility in Derby and is designed to offer a 25% fuel efficiency improvement compared with its first-generation engine. The firm said the first test run of the engine will be conducted on 100% sustainable aviation fuel. The project has been supported by the Aerospace Technology Institute, Innovate UK, the German federal aviation research programme LuFo and Europe’s Clean Sky Joint Undertaking.

The major Europe stock markets had a negative day:

CAC 40 decreased 131.58 points or -2.09% to 6,165.11
FTSE 100 decreased 140.21 points or -2.00% to 6,859.87
DAX 30 decreased 238.88 points or -1.55% to 15,129.51

The major Europe currency markets had a mixed day today:

EURUSD decreased 0.00006 or 0.00% to 1.20412
GBPUSD decreased 0.00419 or -0.30% to 1.39496
USDCHF increased 0.00004 or 0.00% to 0.91489

Some economic news from Europe today:

UK:

Average Earnings ex Bonus (Feb) increased from 4.3% to 4.4%

Average Earnings Index +Bonus (Feb) decreased from 4.8% to 4.5%

Claimant Count Change (Mar) decreased from 86.6K to 10.1K

Employment Change 3M/3M (MoM) (Feb) increased from -147K to -73K

Unemployment Rate (Feb) decreased from 5.0% to 4.9%

Germany:

German PPI (MoM) (Mar) increased from 0.7% to 0.9%

German PPI (YoY) (Mar) increased from 1.9% to 3.7%

US/AMERICAS:

Wall Street closed in the red this Tuesday after the Dow declined over 250 points (-0.75%), the Nasdaq fell by over 128 (-0.92%), and the S&P 500 lost over 28 points (-0.68%). On the 30-index Dow, Boeing’s 4.13% decline pushed the index down followed by Nike (-4.19), and Goldman (-3.26%).

The Princeton Review has reported that students in the US are now opting to attend colleges closer to home. In-state tuition is notably more affordable, and more students are opting to commute from their parents’ home than pay for housing. According to the College Board, in-state students at public institutions paid around $10,560 for education during 2020-2021, while students at private institutions paid an average of $37,650. Student loans are non-forgivable even in the case of bankruptcy after the Clinton administration repealed the Glass-Steagall Act in 1999.

Numerous analysts had predicted that the lockdown would lead to a baby boom, reversing the population decline. However, new data from CBS news reported that births in the US decreased by 7% within the first nine months of the lockdown. Fertility and birth rates decreased by 2% from 2017 to 2018, according to the CDC, marking a 32-year low in new births. Debt, volatile times, the increasing need for a two-income household, unobtainable high-priced housing, and less time for childcare has caused women under 35 to delay having children, while those over 35 have seen a small increase in births. In fact, most women in developed nations are beginning to have children later in life. A report by Merrill Lynch showed that on average, Americans will pay $230,000 to raise a child to the age of 18 (educational costs not included). A smaller population equals a smaller future workforce, especially as the largest generation, Baby Boomers, enter their retirement years.

Mexico’s President Andres Manuel Lopez Obrador publicly received the AstraZeneca coronavirus vaccination today in an effort to ease concerns. The vaccine was previously banned in numerous countries after reports negative side effects including blood clots. “We’re sure there is no risk, no danger, that there are no serious side effects,” the president claimed. AstraZeneca happens to be Mexico’s leading vaccine provider, as the government has agreed to purchase 77.4 million AstraZeneca doses as of February. Over 4 million Mexican citizens (total population 126 million) have already been vaccinated.

US Market Closings:

Dow declined 256.33 points or -0.75% to 33,821.3
S&P 500 declined 28.32 points or -0.68% to 4,134.94
Nasdaq declined 128.5 points or 0.92% to 13,786.27
Russell 2000 declined 43.79 points or -1.96% to 2,188.21

Canada Market Closings:

TSX Composite declined 163.64 points or -0.85% to 19,040.78
TSX 60 declined 11.15 points or -0.97% to 1,134.03

Brazil Market Closing:

Bovespa declined 871.79 points or -0.72% to 120,061.99

ENERGY:

The United States has urged Saudi Arabia to keep energy prices affordable for consumers. Representatives from both countries had a call today and said that both the countries reaffirmed international cooperation to ensure the consumers with reliable sources of energy. Both the countries also discussed collaborating in solving common challenges and develop energy sources, clean forms of hydrogen to combat climate change.

The oil markets had a negative day today:

Crude Oil decreased 1.12 USD/BBL or -1.77% to 62.2600
Brent decreased 0.78 USD/BBL or -1.16% to 66.2700
Natural gas decreased 0.012 USD/MMBtu or -0.44% to 2.7370
Gasoline decreased 0.0375 USD/GAL or -1.83% to 2.0070
Heating oil decreased 0.0256 USD/GAL or -1.35% to 1.8669

Top commodity gainers: Canola (2.58%), Lumber (3.62%), Sugar (2.95%) and Corn (2.53%)
Top commodity losers: Orange Juice (-2.55%), Palladium (-1.94%), Crude Oil (-1.77%), and Gasoline (-1.83%)

The above data was collected around 12:15 EST on Tuesday.

BONDS:

Japan 0.0840%(+0bp), US 2’s 0.16%(+0.0002%), US 10’s 1.6047%(+1bps); US 30’s 2.32%(+0.004%), Bunds -0.2340% (+0bp), France 0.0304% (+2bp), Italy 0.8080% (+2bp), Turkey 17.27% (+3bp), Greece 0.9130% (+0bp), Portugal 0.441% (+2bp); Spain 0.435% (+2bp) and UK Gilts 0.754% (-0bp).