Market Talk – April 6, 2022

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Core consumer prices in Japan’s capital rose at the fastest pace in more than two years in March, propelled by energy costs that have hit a four-decade high following Russia’s invasion of Ukraine. The relentless uptrend in global commodity prices could ruin Japan’s fragile recovery from the pandemic, even as domestic COVID-19 infections wane and social distancing curbs are reduced, analysts say. The Tokyo core consumer price index (CPI), which excludes volatile fresh food but includes energy items, rose 0.8% year-on-year in March, the fastest pace since December 2019. It was also quicker than a median market forecast for a 0.7% gain and a 0.5% rise in February. A 26.1% surge in energy prices – the fastest annual growth in 41 years – drove up the Tokyo core CPI for March, the data showed. In the overall reading that includes fresh food prices, Tokyo CPI in March rose 1.3% from a year earlier, hitting the highest since April 2019.

The major Asian stock markets had a mixed day today:• NIKKEI 225 decreased 437.68 points or -1.58% to 27,350.30• Shanghai increased 0.71 points or 0.02% to 3,283.43• Hang Seng decreased 421.79 points or -1.87% to 22,080.52• ASX 200 decreased 37.80 points or -0.50% to 7,490.10• Kospi decreased 24.17 points or -0.88% to 2,735.03• SENSEX decreased 566.09 points or -0.94% to 59,610.41• Nifty50 decreased 149.75 points or -0.83% to 17,807.65The major Asian currency markets had a mixed day today:• AUDUSD decreased 0.00530 or -0.69% to 0.75317• NZDUSD decreased 0.00190 or -0.27% to 0.69288• USDJPY  increased 0.122 or 0.10% to 123.745• USDCNY  decreased 0.01290 or -0.20% to 6.36469Precious Metals:• Gold increased 1.23 USD/t oz. or 0.06% to 1,924.99• Silver increased 0.128 USD/t. oz or 0.52% to 24.438Some economic news from last night:China:Caixin Services PMI (Mar) decreased from 50.2 to 42.0Hong Kong:     Manufacturing PMI (Mar) decreased from 42.9 to 42.0New Zealand:ANZ Commodity Price Index (MoM) remain the same at 3.9%Some economic news from todayIndia:Nikkei Services PMI (Mar) increased from 51.8 to 53.6M3 Money Supply decreased from 8.9% to 8.7%EUROPE/EMEA:

Bank of England (BoE) Governor Andrew Bailey has said that cryptocurrencies are the new “front line” in criminal scams that financial regulators are trying to prevent. Bailey, speaking at a “Stop Scams” conference organized by the UK central bank, said the underlying tech of crypto was contributing to innovation in financial services, but also created an “opportunity for the downright criminal”.

The Financial Conduct Authority (FCA) of UK last week extended a deadline for approving crypto businesses, giving a dozen firms more time to get their applications in order. So far, 33 firms have been approved by the watchdog, allowing them to continue providing crypto services from within the UK after 1 April. The Financial Conduct Authority (FCA) said firms on its temporary register of crypto asset businesses will be given additional time if they can show they require it. Companies can do this by providing more information for their application, pursuing an appeal against the FCA’s decision, or winding down their operations.

The major Europe stock markets had a negative day:• CAC 40 decreased 146.68 points or -2.21% to 6,498.83• FTSE 100 decreased 26.02 points or -0.34% to 7,587.70• DAX 30 decreased 272.67 points or -1.89% to 14,151.69The major Europe currency markets had a green day today:• EURUSD  increased 0.00066 or 0.06% to 1.09129• GBPUSD increased 0.00035 or 0.03% to 1.30795• USDCHF increased 0.00288 or 0.31% to 0.93252Some economic news from Europe today:Germany:German Factory Orders (MoM) (Feb) decreased from 2.3% to -2.2%IHS Markit Construction PMI (Mar) decreased from 54.9 to 50.9UK:Construction PMI (Mar) remain the same at 59.1Spain:Spanish Consumer Confidence decreased from 89.8 to 53.8Euro Zone:PPI (MoM) (Feb) decreased from 5.1% to 1.1%PPI (YoY) (Feb) increased from 30.6% to 31.4%US/AMERICAS:

Fed President Mary Daly stated that the 40-year high inflation was equally as harmful to individuals as not having a job. Daly proclaimed that the Fed believes inflation will continue to rise for some time, but tried to provide the people with some confidence. Increasing interest rates “is necessary to ensure that again, [you] go to bed at night, you’re not worrying about whether prices will be higher, considerably higher tomorrow,” the Fed president stated.

The US implemented additional sanctions today on Russia. Two of Putin’s adult daughters have been sanctioned as the US is accusing them of harboring funds for their father. Additionally, the US is banning all new investments in Russia. The rule will apply to US residents and US citizens living abroad. Sberbank and Alfa Bank, two of Russia’s largest banks, will be banned from interacting with the US aside from ongoing energy purchases.

US Market Closings:

  • Dow declined 144.67 points or -0.42% to 34,496.51
  • S&P 500 declined 43.97 points or -0.97% to 4,481.15
  • Nasdaq declined 315.35 points or -2.22% to 13,888.82
  • Russell 2000 declined 29.11 points or -1.42% to 2,016.94


Canada Market Closings:

  • TSX Composite declined 142.23 points or -0.65% to 21,788.6
  • TSX 60 declined 7.33 points or -0.55% to 1,322.3


Brazil Market Closing:

  • Bovespa declined 657.4 points or -0.55% to 118,227.75

ENERGY:The oil markets had a mixed day today:• Crude Oil decreased 2.68 USD/BBL or -2.63% to 99.280• Brent decreased 2.62 USD/BBL or -2.46% to 104.02• Natural gas increased 0.247 USD/MMBtu or 4.09% to 6.2780• Gasoline decreased 0.0617 USD/GAL or -1.95% to 3.1032• Heating oil decreased 0.0732 USD/GAL or -2.11% to 3.3950The above data was collected around 13:03 EST on Wednesday   • Top commodity gainers: Natural Gas (4.09%) and Milk (1.05%),  Lean Hogs(1.07%),  Bitumen (3.89%)• Top commodity losers: Lumber(-6.07%), Crude Oil (-2.63%), Brent(-2.46%) and Heating Oil (-2.11%)The above data was collected around 13:11 EST on Wednesday.BONDS: Japan 0.241%(+3.2bp), US 2’s 2.50% (-0.028%), US 10’s 2.6031% (+4.88bps); US 30’s 2.63% (+0.048%), Bunds 0.647% (+3.7bp), France 1.188% (+3.4bp), Italy 2.324% (+7.6bp), Turkey 24.14% (-3bp), Greece 2.760% (+11.5bp), Portugal 1.602% (+9bp); Spain 1.695% (+9.6bp) and UK Gilts 1.7010% (+4.7bp).