Market Talk – April 5, 2022

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ASIA:

Japan cannot avoid crafting a supplementary budget for fiscal 2022 as part of measures to mitigate the impact of rising prices on the economy, former Prime Minister Yoshihide Suga said Sunday. His successor, Fumio Kishida, is reluctant to compile an additional budget at an early date as the new fiscal year just started this month. The government has reserve funds totaling 5.5 trillion yen ($45 billion) in the initial budget for this fiscal year. The funds include those set aside for the COVID-19 response. Government sources said last week that Japan is considering spending over 1 trillion yen on a new economic package in a bid to cushion the impact of rising energy and grain prices, which have become even higher since Russia’s invasion of Ukraine in February.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 51.51 points or 0.19% to 27,787.98
  • Shanghai closed
  • Hang Seng closed
  • ASX 200 increased 14.20 points or 0.19% to 7,527.90
  • Kospi increased 1.30 points or 0.05% to 2,759.20
  • SENSEX decreased 435.24 points or -0.72% to 60,176.50
  • Nifty50 decreased 96.00 points or -0.53% to 17,957.40

 

The major Asian currency markets had a green day today:

  • AUDUSD increased 0.00469 or 0.62% to 0.75901
  • NZDUSD increased 0.00118 or 0.17% to 0.69611
  • USDJPY increased 0.84 or 0.68% to 123.622
  • USDCNY increased 0.00728 or 0.11% to 6.38014

 

Precious Metals:

  • Gold decreased 8.67 USD/t oz. or -0.45% to 1,923.77
  • Silver decreased 0.094 USD/t. oz or -0.38% to 24.408

 

 

Some economic news from last night:

Japan:

Average Cash Earnings (YoY) increased from 0.9% to 1.2%

Household Spending (YoY) (Feb) decreased from 6.9% to 1.1%

Household Spending (MoM) (Feb) decreased from -1.2% to -2.8%

Overall wage income of employees (Feb) increased from 1.1% to 1.2%

Overtime Pay (YoY) (Feb) increased from 4.4% to 5.8%

Services PMI (Mar) increased from 44.2 to 49.4

South Korea:

FX Reserves – USD (Mar) decreased from 461.77B to 457.81B

CPI (YoY) (Mar) increased from 3.7% to 4.1%

CPI (MoM) (Mar) increased from 0.6% to 0.7%

Australia:

AIG Construction Index (Mar) increased from 53.4 to 56.5

Services PMI decreased from 57.4 to 55.6

 

Some economic news from today

Australia:

RBA Interest Rate Decision (Apr) remain the same at 0.10%

New Zealand:

GlobalDairyTrade Price Index decreased from -0.9% to -1.0%

Singapore:

Retail Sales (MoM) (Feb) increased from -2.2% to -1.2%

Retail Sales (YoY) (Feb) decreased from 12.0% to -3.4%

 

 

 

EUROPE/EMEA:

The cost of living hit another record high in the Eurozone last month, raising further questions about how the European Central Bank can stabilize such rapidly rising consumer prices. Headline inflation came in at 7.5% for March on an annual basis, according to preliminary data from Europe’s statistics office Eurostat released on Friday. Headline inflation had reached 5.9% in February.

The numbers come at a time when Russia’s invasion of Ukraine has brought renewed economic uncertainty, with some economists wondering whether the Eurozone will enter a recession in 2022 — something that European officials have so far refused to say. The Eurozone has taken unprecedented measures to punish Russia for its decision to invade Ukraine — such as blocking the sale of luxury goods — and these sanctions are having repercussions on the Eurozone economy itself. European Central Bank President Christine Lagarde said earlier this week that “three main factors are likely to take inflation higher” going forward.

 

The major Europe stock markets had a mixed day:

  • CAC 40 decreased 85.86 points or -1.28% to 6,645.51
  • FTSE 100 increased 54.80 points or 0.72% to 7,613.72
  • DAX 30 decreased 93.80 points or -0.65% to 14,424.36

 

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00589 or -0.54% to 1.09155
  • GBPUSD decreased 0.00263 or -0.20% to 1.30880
  • USDCHF increased 0.00302 or 0.33% to 0.92929

 

 

 

Some economic news from Europe today:

France:

French Industrial Production (MoM) (Feb) decreased from 1.8% to -0.9%

French Markit Composite PMI (Mar) increased from 55.5 to 56.3

French Services PMI (Mar) increased from 55.5 to 57.4

Spain:

Spanish Services PMI (Mar) decreased from 56.6 to 53.4

Italy:

Italian Public Deficit (Q4) decreased from 6.3% to 3.0%

Italian Composite PMI (Mar) decreased from 53.6 to 52.1

Italian Services PMI (Mar) decreased from 52.8 to 52.1

Germany:

German Composite PMI (Mar) decreased from 55.6 to 55.1

German Services PMI (Mar) increased from 55.8 to 56.1

Euro Zone:

Markit Composite PMI (Mar) decreased from 55.5 to 54.9

Services PMI (Mar) increased from 55.5 to 55.6

UK:

Composite PMI (Mar) increased from 59.9 to 60.9

Services PMI (Mar) increased from 60.5 to 62.6

 

 

US/AMERICAS:

Twitter shares soared on Monday after Elon Musk announced he bought a 9.2% stake in the company, becoming the largest shareholder. CEO Parag Agrawal announced on Tuesday that Musk will be permitted to sit on the Board of Directors. Twitter is surprisingly supportive of Musk, despite his recent criticism of the company’s censorship of conservative voices.

Formerly dovish Federal Reserve Governor Lael Brainard stated on Tuesday that the central bank must act quickly to tighten policy. “Currently, inflation is much too high and is subject to upside risks,” she stated. “The Committee is prepared to take stronger action if indicators of inflation and inflation expectations indicate that such action is warranted.” Brainard now supports a move more intensive than the expected 25 basis point rise in rates.

US Market Closings:

  • Dow declined 280.7 points or -0.8% to 34,641.18
  • S&P 500 declined 57.52 points or -1.26% to 4,525.12
  • Nasdaq declined 328.39 points or -2.26% to 14,204.17
  • Russell 2000 declined 49.4 points or 2.36% to 2,046.04

 

Canada Market Closings:

  • TSX Composite declined 154.77 points or -0.7% to 21,930.83
  • TSX 60 declined 6.44 points or -0.48% to 1,329.63

 

Brazil Market Closing:

  • Bovespa declined 2,394.36 points or -1.97% to 118,885.15

 

ENERGY:

 

The oil markets had a mixed day today:

 

  • Crude Oil increased 0.27 USD/BBL or 0.26% to 103.550
  • Brent increased 0.22 USD/BBL or 0.20% to 107.7500
  • Natural gas increased 0.417 USD/MMBtu or 7.30% to 6.1290
  • Gasoline decreased 0.0193 USD/GAL or -0.60% to 3.1788
  • Heating oil decreased 0.0777 USD/GAL or -2.19% to 3.4684

 

The above data was collected around 13:17 EST on Tuesday

 

  • Top commodity gainers: Natural Gas (7.30%) and Soybeans (1.83%), Wheat(3.37%), Palm Oil (4.02%)
  • Top commodity losers: Platinum(-1.52%), Feeder Cattle (-1.75%), Palladium(-1.67%) and Heating Oil (-2.19%)

 

The above data was collected around 13:27 EST on Tuesday.

 

BONDS:

 

Japan 0.214%(+0.5bp), US 2’s 2.50% (+0.082%), US 10’s 2.5543% (+16.1bps); US 30’s 2.59% (+0.131%), Bunds 0.617% (+10bp), France 1.153% (+14.4bp), Italy 2.255% (+17.9bp), Turkey 24.19% (+18bp), Greece 2.665% (+7.1bp), Portugal 1.532% (+16.4bp); Spain 1.626% (+16.7bp) and UK Gilts 1.650% (+8.3bp).