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Market Talk – January 27, 2022

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China’s central bank cut its benchmark lending rates again on Thursday amid concerns about an economic slowdown in the world’s second-largest economy. The People’s Bank of China reduced the one-year loan prime rate by 10 basis points from 3.8% to 3.7%. In December, the PBOC cut the one-year loan prime rate for the first time since April 2020. The five-year loan prime rate was lowered by 5 basis points from 4.65% to 4.6% — it was the first cut since April 2020, at the height of the coronavirus pandemic in the country. Loan prime rates (LPR) affect the lending rates for corporate and household loans in the country.

India plans to raise spending on infrastructure in its annual budget next week to set the economy on a firmer footing, but fiscal constraints leave little chance of concessions for households hurting from the pandemic, Reuters reported. Asia’s third-largest economy is estimated to expand 9.2% in the fiscal year that ends in March, following a contraction of 7.3% in the previous fiscal year. Yet private consumption, which makes up almost 55% of GDP, is below pre-pandemic levels amid rising household debt, while retail prices have swelled almost a tenth since the COVID-19 outbreak in early 2020.




The major Asian stock markets had a negative day today:


  • NIKKEI 225 decreased 841.03 points or -3.11% to 26,170.30


  • Shanghai decreased 61.42 points or -1.78% to 3,394.25


  • Hang Seng decreased 482.90 points or -1.99% to 23,807.00


  • ASX 200 decreased 123.30 points or -1.77% to 6,838.30


  • Kospi decreased 94.75 points or -3.50% to 2,614.49


  • SENSEX decreased 581.21 points or -1.00% to 57,276.94


  • Nifty50 decreased 167.80 points or -0.97% to 17,110.15




The major Asian currency markets had a mixed day today:


  • AUDUSD decreased 0.00867 or -1.22% to 0.70327


  • NZDUSD decreased 0.00774 or -1.16% to 0.65810


  • USDJPY increased 0.648 or 0.56% to 115.353


  • USDCNY increased 0.03246 or 0.51% to 6.37028




Precious Metals:


  • Gold decreased 25.72 USD/t oz. or -1.41% to 1,792.40


  • Silver decreased 0.892 USD/t. oz or -3.80% to 22.590




Some economic news from last night:




Chinese Industrial profit (YoY) (Dec) decreased from 9.00% to 4.20%


Chinese Industrial profit YTD (Dec) decreased from 38.0% to 34.3%




Foreign Bonds Buying decreased from 935.4B to -107.1B


Foreign Investments in Japanese Stocks increased from -11.3B to 10.2B


South Korea:


Manufacturing BSI Index (Feb) increased from 89 to 93




MI Leading Index (MoM) ecreased from 0.2% to 0.0%


Export Price Index (QoQ) (Q4) decreased from 6.2% to 3.5%


Import Price Index (QoQ) (Q4) increased from 5.4% to 5.8%


New Zealand:


CPI (YoY) (Q4) increased from 4.9% to 5.9%


CPI (QoQ) (Q4) decreased from 2.2% to 1.4%




Some economic news from today


Hong Kong:


Exports (MoM) (Dec) decreased from 25.0% to 24.8%


Imports (MoM) (Dec) decreased from 20.0% to 19.3%


Trade Balance decreased from -11.6B to -47.9B




M3 Money Supply decreased from 9.9% to 9.1%





The German government on Wednesday lowered its economic growth forecast for 2022 as an Omicron-fueled surge in coronavirus cases holds back Europe’s industrial powerhouse. The country’s gross domestic product is now estimated to expand by 3.6 percent, down from 4.1 percent in a previous forecast. The ministry’s forecast is more pessimistic than that of the Bundesbank central bank, which is penciling in 4.2 percent growth this year. Germany, whose export-oriented economy is particularly vulnerable to the global supply chain bottlenecks and raw material shortages caused by the pandemic, has seen its recovery lag behind other major European economies like France and Italy.

The UK economy grew at its slowest pace in almost a year in January as hospitality, leisure and travel businesses felt the impact of the Omicron variant. The monthly flash PMI (purchasing managers’ index) estimate of activity from IHS Markit and the Chartered Institute of Procurement and Supply reported a two-speed recovery with an easing of supply-chain bottlenecks for manufacturing offset by weakness in consumer-facing service companies. The gloomy picture for consumer-facing parts of the service sector contrasted with a report from Lloyds Bank showing spending on debit cards in the first two weeks of 2022 up by 27% on the same period in 2020, before the onset of the Covid-19 pandemic. While less was spent on commuting and holidays, there were sharp increases in payments in restaurants and bars, shops and cinemas, the bank said.


The major Europe stock markets had a green day:


  • CAC 40 increased 41.84 points or 0.60% to 7,023.80


  • FTSE 100 increased 84.53 points or 1.13% to 7,554.31


  • DAX 30 increased 64.88 points or 0.42% to 15,524.27




The major Europe currency markets had a mixed day today:


  • EURUSD decreased 0.0102 or -0.91% to 1.11394


  • GBPUSD decreased 0.00932 or -0.69% to 1.33735


  • USDCHF increased 0.00752 or 0.81% to 0.93141






Some economic news from Europe today:




Trade Balance (Dec) decreased from 6.099B to 3.693B




GfK German Consumer Climate (Feb) increased from -6.9 to -6.7




Unemployment Rate (Nov) decreased from 3.6% to 3.5%




Italian Industrial Sales (YoY) (Nov) increased from 17.00% to 22.20%


Italian Industrial Sales (MoM) (Nov) decreased from 2.90% to 2.40%




Spanish Unemployment Rate (Q4) decreased from 14.57% to 13.33%


The Commerce Department reported that the US economy advanced by 6.9% from October to December. Analysts had anticipated a growth rate of 5.5%. The news provides optimism that the recovery is underway as it marks the strongest quarterly growth in a year.

Jobless claims in the US totaled 260,000, marking a 30,000 decline from the week prior. The four-week moving average grew from 232,000 to 247,000. Continuing claims advanced by 51,000 to 1.675 million for the week ending on January 15.

US Market Closings:

  • Dow declined 7.31 points or -0.02% to 34,160.78
  • S&P 500 declined 23.42 points or -0.54% to 4,326.51
  • Nasdaq declined 189.34 points or -1.4% to 13,352.78
  • Russell 2000 declined 45.18 points or -2.29% to 1,931.29


Canada Market Closings:

  • TSX Composite declined 51.78 points or -0.25% to 20,544.11
  • TSX 60 declined 2.23 points or -0.18% to 1,250.86


Brazil Market Closing:

  • Bovespa advanced 1,322.47 points or 1.19% to 112,611.65






The oil markets had a mixed day today:


  • Crude Oil decreased 0.25 USD/BBL or -0.29% to 87.1000


  • Brent decreased 0.2 USD/BBL or -0.22% to 89.7600


  • Natural gas increased 0.343 USD/MMBtu or 8.02% to 4.6200


  • Gasoline increased 0.0071 USD/GAL or 0.28% to 2.5300


  • Heating oil increased 0.0397 USD/GAL or 1.45% to 2.7837




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






  • Top commodity gainers: Natural Gas (8.02%) and Palm Oil (2.95%), Orange Juice (2.51%), Methanol (3.49%)


  • Top commodity losers: Lumber (-3.24%), Silver(-3.80%), Coffee(-2.30%) and Cocoa(-2.31%)




The above data was collected around 13:35 EST on Thursday.





Japan 0.159%(+2.1bp), US 2’s 1.17% (+0.016%), US 10’s 1.7905% (-8.22bps); US 30’s 2.08% (-0.092%), Bunds -0.069% (+0.2bp), France 0.334% (-1.1bp), Italy 1.347% (-6bp), Turkey 22.37% (+77bp), Greece 1.685% (-0.1bp), Portugal 0.601% (-0.5bp); Spain 0.679% (-0.6bp) and UK Gilts 1.218% (+1.6bp).