Market Talk – January 13, 2021

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ASIA:

China posted its biggest daily jump in COVID-19 cases in more than five months on Wednesday, stepping up containment measures that have seen four cities put under lockdown, as the world’s second-biggest economy scrambles to head off a new wave of infections. Most of the new cases were reported near the capital, Beijing, but a province in the far northeast also saw a rise in infections, official data showed, amid a resurgence that has seen more than 28 million people put under home quarantine. On Wednesday, the National Health Commission reported a total of 115 new confirmed cases on the mainland, compared with 55 the previous day, the highest daily increase since July 30.

A fall in vegetable prices helped India’s retail inflation to ease in December to within the central bank’s 2% to 6% target range, although it’s unlikely to cut the policy repo rate soon, economists said. December’s annual retail inflation was 4.59%, down from 6.93% in November to the lowest since September 2019 and below the 5.28% forecast in a Reuters poll of economists, data released by Ministry of Statistics showed on Tuesday. Economists said growing consumer demand and rising input costs for manufacturers are likely to keep headline inflation above 4%, providing little wriggle room to the Reserve Bank of India in 2021.

India’s Foreign Minister Subrahmanyam Jaishankar said on Tuesday that trust with China had been deeply impaired after last summer’s border clash which resulted in the first combat deaths in 45 years. Ties with the United States, on the other hand, were converging and were likely to expand under the new administration in Washington, India’s top diplomat told the Reuters Next conference.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 292.25 points or 1.04% to 28,456.59
  • Shanghai decreased 9.69 points or -0.27% to 3,598.65
  • Hang Seng decreased 41.15 points or -0.15% to 28,235.60
  • ASX 200 increased 7.50 points or 0.11% to 6,686.60
  • Kospi increased 22.34 points or 0.71% to 3,148.29
  • SENSEX decreased 24.79 points or -0.05% to 49,492.32
  • Nifty50 increased 1.40 points or 0.01% to 14,564.85

 

 

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00322 or -0.41% to 0.77376
  • NZDUSD decreased 0.0047 or -0.65% to 0.71789
  • USDJPY increased 0.1 or 0.10% to 103.87
  • USDCNY increased 0.0259 or 0.40% to 6.46864

 

Precious Metals:

  • Gold decreased 7.69 USD/t oz. or -0.41% to 1,847.94
  • Silver decreased 0.33 USD/t. oz or -1.30% to 25.242

 

Some economic news from last night:

Japan:

M3 Money Supply (Dec) increased from 1,923.6T to 1,930.1T

South Korea:

Unemployment Rate (Dec) increased from 4.1% to 4.6%

M2 Money supply (Nov) remain the same at 8.40%

New Zealand:

ANZ Commodity Price Index (MoM) increased from 0.9% to 1.8%

 

Some economic news from today:

Japan:

Machine Tool Orders (YoY) increased from 8.60% to 8.70%

South Korea::

Export Price Index (YoY) (Dec) decreased from -4.6% to -5.4%

Import Price Index (YoY) (Dec) increased from -10.3% to -10.2%

New Zealand:

Building Consents (MoM) (Nov) decreased from 8.9% to 1.2%

 

EUROPE/EMEA:

Pressure is mounting on the UK government to resolve issues around EU touring visas for musicians and crews. Since leaving the EU, British musicians are no longer guaranteed visa-free travel and may need additional work permits to play in some countries. Composer and cross-bench member of the House of Lords, Michael Berkeley, said it left many in a “perilous position”. The Association of Independent Music called for the two sides “to speedily return to the negotiating table.”

UK Prime Minister Boris Johnson warned intensive care units could be overwhelmed as the country hit its highest daily coronavirus death toll since the pandemic began. The premier said there is a “very substantial” risk of intensive care capacity in hospitals being “over-topped,” and urged people to follow lockdown rules to curb the spread of the disease.

Sweden’s economy grew 0.4% in November on a seasonally adjusted basis, a preliminary indicator published by the Statistics Office on Tuesday showed, despite tougher restrictions imposed by the government to bring the COVID-19 pandemic under control. After a strong recovery in the third quarter, the economy has slowed again. In October, the economy grew 0.5% versus September, according to preliminary statistics. The central bank has previously warned the economy could stall or even shrink in the fourth quarter with lower activity spilling over into the first months of 2021.

The United Arab Emirates will likely suffer a deeper economic contraction this year than previously estimated, hurt by disruptions caused by the coronavirus pandemic and lower oil prices. Gross domestic product in the Arab world’s second-largest economy is estimated to shrink about 6% in 2020, compared with a previous forecast for a decline of 5.2%, the central bank said in its quarterly review on Tuesday. The economy is expected to grow 2.5% in 2021. The outlook is slightly better than forecasts from the International Monetary Fund, which expects a decline of 6.6% this year. The UAE economy last contracted by more than 5% in 2009, according to the fund.

The major Europe stock markets had a mixed day:

  • CAC 40 increased 11.70 points or 0.21% to 5,662.67
  • FTSE 100 decreased 8.59 points or -0.13% to 6,745.52
  • DAX 30 increased 14.65 points or 0.11% to 13,939.71

 

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.0056 or -0.46% to 1.21525
  • GBPUSD decreased 0.0037 or -0.27% to 1.36289
  • USDCHF increased 0.00142 or 0.16% to 0.88772

 

Some economic news from Europe today:

Germany:

German WPI (MoM) (Dec) increased from 0.1% to 0.6%

German WPI (YoY) (Dec) increased from -1.7% to -1.2%

Italy:

Italian Industrial Production (MoM) (Nov) decreased from 1.4% to -1.4%

Italian Industrial Production (YoY) (Nov) decreased from -1.9% to -4.2%

Euro Zone:

Industrial Production (YoY) (Nov) increased from -3.5% to -0.6%

Industrial Production (MoM) (Nov) increased from 2.3% to 2.5%

 

US/AMERICAS:

Denying cries from the House of Representatives, Vice President Mike Pence will not invoke the 25th Amendment to remove President Donald Trump. The House has voted 223-205 in favor of eliminating Trump from the White House after he was blamed for the attack on the Capitol. Denying cried from the House of Representative, Vice President Mike Pence will not invole the 25th Amendment to remove President Donald Trump. The House has voted 223-205 in favor of eliminating Trump from the White House after he was blamed for the attack on the Capitol.

US Secretary of State Mike Pompeo abruptly canceled plans to visit Brussels after EU leaders rescinded his invitation. Numerous European leaders have stated that they will work with the incoming Biden administration on diplomatic matters.

The US consumer price gauge slowed last month as a lessened demand and labor market woes helped quell inflation pressures. The core consumer index increased by only 0.1% from 0.2% in November, according to a report released by the Labor Department this Wednesday. Looking from a broader perspective, CPI advanced 0.4% MoM and 1.4% YoY in December.

International travelers will now be required to submit a negative COVID-19 test before entering the US. The ruling by the Centers for Disease Control and Prevention (CDC) will begin on January 26. Canada has implemented a similiar rule that began on January 7.

For the first time in American history, the House of Representatives has voted to impeach the sitting president. Senate Majority Leader Mitch McConnell said that he would not reconvene the Senate early, which means it could spill over to the beginning of Biden’s presidency and tie up other areas. President Trump has warned that an impeachment proceeding would likely cause more civil unrest.

US Market Closings:

  • Dow declined 8.22 points or -0.03% to 31,060.47
  • S&P 500 advanced 8.65 points or 0.23% to 3,809.84
  • Nasdaq advanced 56.52 points or 0.43% to 13,128.95
  • Russell 2000 declined 15.99 points or -0.75% to 2,111.97

Canada Market Closings:

  • TSX Composite declined 51.06 points or -0.28% to 17,934.74
  • TSX 60 declined 2.83 points or -0.26% to 1,067.15

Brazil Market Closing:

  • Bovespa declined 2,064.92 points or -1.67% to 121,933.08

ENERGY:

The Abu Dhabi National Oil Company (ADNOC) will be channeling Dh160 billion and more into the UAE economy over the next five years as part of its latest capital expenditure plans. This will go towards “post-COVID economic growth” through the energy giant’s ICV (in-country value) program.

The oil markets had a mixed day today:

 

  • Crude Oil decreased 0.32 USD/BBL or -0.60% to 52.8900
  • Brent decreased 0.54 USD/BBL or -0.95% to 56.0400
  • Natural gas decreased 0.012 USD/MMBtu or -0.44% to 2.7410
  • Gasoline decreased 0.0057 USD/GAL or -0.37% to 1.5473
  • Heating oil increased 0.0002 USD/GAL or 0.01% to 1.5969
  • Top commodity gainers: Ethanol (7.24%), Rubber (2.76%), Orange Juice (2.89%) and Coffee (3.71%)
  • Top commodity losers: Silver (-1.30%), Lean Hogs (-2.52%), Cotton (-0.95%), and Brent (-0.95%)

 

The above data was collected around 16:32 EST on Wednesday.

 

BONDS:

Japan 0.04%(+0bp), US 2’s 0.00%(-0.00%), US 10’s 1.10%(-4bps); US 30’s 2.00%(-0.06%), Bunds -0.49% (+1bp), France -0.28% (-2bp), Italy 0.56% (-8bp), Turkey 12.80% (-3bp), Greece 0.67% (-2bp), Portugal 0.01% (-4bp); Spain 0.07% (-4bp) and UK Gilts 0.31% (-5bp).

 

  • German 5-Year Bobl Auction increased from -0.720% to -0.700%
  • US 30-Year Bond Auction increased from 1.665% to 1.825%