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Market Talk – April 20, 2022

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OPEC’s share of India’s oil imports for the 2021/22 financial year remained almost flat year on year, arresting sharp declines over the past six years, as refiners snapped up short-haul crude from the middle east to counter rising global prices. Total crude imports by the world’s third biggest oil importer and consumer rose by an annual 7.2% to 4.26 million barrels per day (bpd) in the year to March 31, ship-tracking data from industry sources showed. The share of that provided by members of the Organization of the Petroleum Exporting Countries (OPEC) – mainly from the Middle East and Africa – was 71.6% in 2021/22, compared with 71.9% in 2020/21, the data showed. OPEC oil accounted for about 88% of India’s crude imports in 2007/08.

The Bank of Japan is expected to consider revising up its inflation forecast for fiscal 2022 in a quarterly report to be adopted at its monetary policy meeting on April 27-28. The BOJ’s growth projection for Japan’s core consumer price index for the year to March 2023 may be revised to between 1.5 pct and 1.9 pct from the 1.1 pct forecast in the central bank’s previous Outlook for Economic Activity and Prices report in January, informed sources said. The possible upward revision will be due to higher import prices resulting from the yen’s recent rapid weakening, as well as surging crude oil prices.

The major Asian stock markets had a mixed day today:• NIKKEI 225 increased 232.76 points or 0.86% to 27,217.85• Shanghai decreased 42.98 points or -1.35% to 3,151.05• Hang Seng decreased 83.09 points or -0.40% to 20,944.67• ASX 200 increased 4.00 points or 0.05% to 7,569.20• Kospi decreased 0.20 points or -0.01% to 2,718.69• SENSEX increased 574.35 points or 1.02% to 57,037.50• Nifty50 increased 177.90 points or 1.05% to 17,136.55The major Asian currency markets had a mixed day today:• AUDUSD increased 0.00576 or 0.78% to 0.74473• NZDUSD increased 0.00599 or 0.89% to 0.68016• USDJPY   decreased 1.427 or -1.10% to 127.811• USDCNY  increased 0.03289 or 0.51% to 6.44980Precious Metals:• Gold increased 3.17 USD/t oz. or 0.16% to 1,953.01• Silver decreased 0.015 USD/t. oz or -0.06% to 25.141Some economic news from last night:China:PBoC Loan Prime Rate remain the same at 3.70%Japan:Adjusted Trade Balance increased from -1.03T to 0.90TExports (YoY) (Mar) decreased from 19.1% to 14.7%Imports (YoY) (Mar) decreased from 34.1% to 31.2%Trade Balance (Mar) increased from -669.7B to -412.4BAustralia:MI Leading Index (MoM) decreased from 0.4% to 0.3%Some economic news from todayJapan:Tertiary Industry Activity Index (MoM) decreased from -0.2% to -1.3%EUROPE/EMEA:

Netflix Inc said inflation, the war in Ukraine, and fierce competition contributed to a loss of subscribers for the first time in more than a decade and predicted deeper losses ahead, marking an abrupt shift in fortune for a streaming company that thrived during the pandemic. The company said it lost 200,000 subscribers in its first quarter, falling well short of its forecast of adding 2.5 million subscribers. Suspending service in Russia after the Ukraine invasion took a toll, resulting in the loss of 700,000 members. Wall Street sent Netflix’s stock tumbling 26% after the bell on Tuesday and erased about $40 billion of its stock market value. Since it warned in January of weak subscriber growth, the company has lost nearly half of its value.

Germany “will be poorer” because of Russia’s assault on Ukraine, the government’s economy minister has warned, as soaring energy prices fuel record inflation and threaten to tip Europe’s biggest economy into a recession. Preliminary figures indicate that inflation hit 7.3% in March, according to the country’s Federal Statistics Office. That’s the highest level in more than 40 years. The German government indicated on Wednesday that a payments dispute with Russia — which has demanded that “unfriendly” nations pay in rubles for their natural gas rather than in the euros or US dollars stated in contracts — could lead to shortages, and ultimately rationing.

The major Europe stock markets had a green day:• CAC 40 increased 90.12 points or 1.38% to 6,624.91• FTSE 100 increased 27.94 points or 0.37% to 7,629.22• DAX 30 increased 208.57 points or 1.47% to 14,362.03The major Europe currency markets had a mixed day today:• EURUSD increased 0.00508 or 0.47% to 1.08410• GBPUSD increased 0.00395 or 0.30% to 1.30502• USDCHF decreased 0.00307 or -0.32% to 0.94903Some economic news from Europe today:UK:Car Registration (MoM) (Mar) increased from -48.7% to 312.7%Car Registration (YoY) (Mar) decreased from 15.0% to -14.3%Italy:Italian Car Registration (MoM) (Mar) increased from 2.8% to 7.8%Italian Car Registration (YoY) (Mar) decreased from -22.6% to -29.7%Italian Trade Balance (Feb) increased from -5.128B to -1.662BItalian Trade Balance EU (Feb) increased from -0.97B to -0.12BGermany:German Car Registration (MoM) (Mar) increased from 8.9% to 20.4%German Car Registration (YoY) (Mar) decreased from 3.2% to -17.5%German PPI (MoM) (Mar) increased from 1.4% to 4.9%German PPI (YoY) (Mar) increased from 25.9% to 30.9%France:French Car Registration (MoM) (Mar) decreased from 12.1% to -19.5%French Car Registration (YoY) (Mar) decreased from -13.0% to -17.3%Euro Zone:Industrial Production (YoY) (Feb) increased from -1.5% to 2.0%Industrial Production (MoM) (Feb) increased from -0.7% to 0.7%Trade Balance (Feb) increased from -27.3B to -7.6BUS/AMERICAS:

Fannie Mae believes the US is heading for a “modest recession” during the latter half of 2023. The group believes the Fed’s hawkish sentiment will cause the real estate frenzy to cool. Home sales for 2022 are expected to decline 7.4% (previous forecast 4.1%), followed by a decrease of 9.7% (initial forecast 2.7%) in 2023.

Home prices in March have already experienced cooling, according to a report released by the National Association of Realtors. Existing home sales declined 2.7% in March to a seasonally adjusted rate of 5.77 million. February’s reading was revised lower to reflect 5.93 million units (original 6.02 million). Home sales this March declined 4.5% on an annual basis.

US Market Closings:

  • Dow advanced 249.59 points or 0.71% to 35,160.79
  • S&P 500 declined 2.76 points or -0.06% to 4,459.45
  • Nasdaq declined 166.59 points or -1.22% to 13,453.07
  • Russell 2000 advanced 7.42 points or 0.37% to 2,038.19


Canada Market Closings:

  • TSX Composite declined 20.44 points or -0.09% to 21,998.38
  • TSX 60 declined 2.28 points or -0.17% to 1,328.91


Brazil Market Closing:

  • Bovespa declined 712.88 points or -0.62% to 114,343.78

ENERGY:The oil markets had a mixed day today:• Crude Oil increased 0.53 USD/BBL or 0.52% to 103.090• Brent increased 0.09 USD/BBL or 0.08% to 107.34• Natural gas decreased 0.253 USD/MMBtu or -3.53% to 6.9230• Gasoline increased 0.0335 USD/GAL or 1.03% to 3.2809• Heating oil increased 0.1047 USD/GAL or 2.71% to 3.9666The above data was collected around 13:25 EST on Wednesday   • Top commodity gainers: Heating Oil (2.71%) and Soybeans (1.59%),  Lumber(3.47%),  Palladium (3.73%)•Top commodity losers: Oat(-2.95%), Zinc (-1.86%), Palm Oil (-2.40%) and Natural Gas (-3.53%)The above data was collected around 13:31 EST on Wednesday.BONDS: Japan 0.251%(+0.6bp), US 2’s 2.57% (-0.027%), US 10’s 2.8436% (-9.64bps); US 30’s 2.89% (-0.107%), Bunds 0.851% (-6.7bp), France 1.329% (-6.3bp), Italy 2.51% (-4.9bp), Turkey 20.64% (-64bp), Greece 2.881% (-9.3bp), Portugal 1.855% (-5bp); Spain 1.827% (-3.1bp) and UK Gilts 1.93% (-4.1bp).