Market Talk – January 12, 2023

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ASIA:

 

China’s economic growth is likely to rebound to 4.9% in 2023, before steadying in 2024, a Reuters poll showed, as policymakers pledge to step up support for the COVID-ravaged economy. Gross domestic product (GDP) likely grew just 2.8% in 2022 as lockdowns weighed on activity and confidence, according to the median forecasts of 49 economists polled by Reuters, slower than a 3.2% rise seen in October’s forecast and braking sharply from 8.4% growth in 2021. The expected 2022 growth rate would be far below the official target of a round of 5.5%. Excluding the 2.2% expansion after the initial COVID hit in 2020, it would also be the worst showing since 1976 — the final year of the decade-long Cultural Revolution that wrecked the economy. GDP in the fourth quarter of 2022 likely grew 1.8% from a year earlier as anti-virus restrictions intensified, the poll showed, slowing from the third-quarter’s 3.9% pace. On a quarterly basis, the economy is forecast to contract 0.8% in the fourth quarter, compared with growth of 3.9% in July-September, the poll showed.

 

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 3.82 points or 0.01% to 26,449.82
  • Shanghai increased 1.61 points or 0.05% to 3,163.45
  • Hang Seng increased 78.05 points or 0.36% to 21,514.10
  • ASX 200 increased 85.10 points or 1.18% to 7,280.40
  • Kospi increased 5.57 points or 0.24% to 2,365.10
  • SENSEX decreased 147.47 points or -0.25% to 59,958.03
  • Nifty50 decreased 37.50 points or -0.21% to 17,858.20

 

 

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00758 or 1.10% to 0.69748
  • NZDUSD increased 0.00426 or 0.67% to 0.64046
  • USDJPY decreased 3.334 or -2.52% to 129.136
  • USDCNY decreased 0.03809 or -0.56% to 6.72761

 

Precious Metals:

  • Gold increased 22.86 USD/t oz. or 1.22% to 1,899.24
  • Silver increased 0.491 USD/t. oz or 2.10% to 23.910

 

Some economic news from last night:

China:

CPI (MoM) (Dec) increased from -0.2% to 0.0%

CPI (YoY) (Dec) increased from 1.6% to 1.8%

PPI (YoY) (Dec) increased from -1.3% to -0.7%

Japan:

Adjusted Current Account increased from -0.61T to 1.92T

Current Account n.s.a. (Nov) increased from -0.064T to 1.804T

Australia:

Trade Balance (Nov) increased from 12.217B to 13.201B

New Zealand:

Building Consents (MoM) (Nov) increased from -10.7% to 7.0%

 

Some economic news from today:

India:

CPI (YoY) (Dec) decreased from 5.88% to 5.72%

 

 

EUROPE/EMEA:

 

Euro zone consumer expectations for inflation finally declined in November, ending prolonged rise as soaring food and energy prices made everyday life more expensive, a European Central Bank survey showed on Thursday. Inflation hit double digits late last year but has now appeared to peak and the ECB’s focus is slowly shifting from stopping its rise to just how quickly it can get it back down to its 2% target. Median inflation expectations over the next 12 months dropped to 5% in November from 5.4% a month earlier while expectations for price growth three years ahead fell to 2.9% from 3%, the ECB said based on a survey of about 14,000 adults in six of the euro zone’s biggest countries.

UAE consumer spending power remains strong despite concerns about the global macro-economic environment. This is according to research by leading management consulting firm, Kearney, exploring consumer sentiment and purchasing habits. Price increases were felt most in food and beverage (85%), transport including gas prices (77%), restaurants and hotels (72%), clothing and footwear (70%) and electronics (68%). However, despite concerns and noticeable price hikes, consumers do not expect their spending to be impacted with over half (56%) planning on making a major household purchase (Dh1,000+) in the next six months.

 

 

The major Europe stock markets had a green day:

  • CAC 40 increased 51.49 points or 0.74% to 6,975.68
  • FTSE 100 increased 69.06 points or 0.89% to 7,794.04
  • DAX 30 increased 110.39 points or 0.74% to 15,058.30

 

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00966 or 0.90% to 1.08516
  • GBPUSD increased 0.0078 or 0.64% to 1.22200
  • USDCHF decreased 0.00327 or -0.35% to 0.92763

 

 

Some economic news from Europe today:

Germany:

German Current Account Balance n.s.a increased from 5.7B to 16.9B

 

US/AMERICAS:

Additional U.S. inflation data was released this Thursday, offering promising signs of price declines. CPI fell 0.1% in December, according to the Labor Department, which marks the steepest MoM decrease since April 2020. Headline CPI, however, rose 6.5% from December 2021, as the cost of living continues to present a problem for most Americans. Core CPI rose 5.7% from the year prior, and rose 0.3% on a monthly basis. Gas prices are finally declining after posting a 9.4% drop MoM, down 1.5% for the year. Fuel oil sharply fell 16.6% MoM, which amounting to a 4.5% decline in the energy index. Food prices remain elevated and rose 0.3% for the month. Shelter costs continued to rise as well, posting an increase of 0.8% MoM and 7.5% YoY. Prices overall remain unstable and far from the central bank’s 2% target.

US Market Closings:

  • Dow advanced 216.96 points or 0.64% to 34,189.97
  • S&P 500 advanced 13.56 points or 0.34% to 3,983.17
  • Nasdaq advanced 69.43 points or 0.64% to 11,001.1
  • Russell 2000 advanced 32.01 points or 1.74% to 1,876.06

 

Canada Market Closings:

  • TSX Composite advanced 186.15 points or 0.93% to 20,211.2
  • TSX 60 advanced 11.04 points or 0.92% to 1,216.02

 

Brazil Market Closing:

  • Bovespa declined 666.86 points or -0.59% to 111,850.22

 

ENERGY:

 

The oil markets had a green day today:

 

  • Crude Oil increased 1.171 USD/BBL or 1.51% to 78.582
  • Brent increased 1.454 USD/BBL or 1.76% to 84.124
  • Natural gas increased 0.1223 USD/MMBtu or 3.33% to 3.7933
  • Gasoline increased 0.0414 USD/GAL or 1.70% to 2.4759
  • Heating oil increased 0.0151 USD/GAL or 0.47% to 3.2330

 

The above data was collected around 14:10 EST on Thursday

 

  • Top commodity gainers: Natural Gas (3.33%), Corn (2.28%), Oat (3.07%) and Coffee (4.07%)
  • Top commodity losers: Lumber (-2.03%), Potatoes (-1.02%), Cotton (-2.17%) and Rhodium (-0.81%)

 

The above data was collected around 14:16 EST Thursday.

 

 

BONDS:

 

Japan 0.505% (+0.5bp), US 2’s 4.14% (-0.092%), US 10’s 3.4418% (-11.42bps); US 30’s 3.57% (-0.107%), Bunds 2.102% (-8.3bp), France 2.624% (-4.9bp), Italy 3.998% (-4.6bp), Turkey 9.91% (+47bp), Greece 4.044% (-14.8bp), Portugal 3.039% (-8.3bp); Spain 3.152% (-5.1bp) and UK Gilts 3.335% (-7.5bp).