Market Talk – June 22, 2021

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ASIA:

China’s imports from Saudi Arabia fell 21% in May from a year earlier but retained their top ranking among suppliers for the ninth month in a row, customs data showed on Sunday. Shipments from Saudi Arabia were 7.2 million tonnes last month, or 1.69 million barrels per day (bpd), data from the General Administration of Chinese Customs showed. Imports from United Arab Emirates arrivals fell 25% last month from year-ago levels.

India’s May crude oil imports slipped to their lowest in three months as fuel demand sagged amid a second wave of the COVID-19 pandemic that crimped economic activity and mobility, government data showed on Monday. On a monthly basis, crude oil imports in the world’s third-largest oil consumer and importer dropped 5.5% to 17.26 million tonnes from April. Oil products’ imports slipped 26.2% to 3.15 million tonnes on an annual basis. Exports were little changed at 5.74 million tonnes in May. Diesel accounted for a major share of these exports at 2.95 million tonnes, surging 58% from the preceding month.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 873.20 points or 3.12% to 28,884.13
  • Shanghai increased 28.23 points or 0.80% to 3,557.41
  • Hang Seng decreased 179.24 points or -0.63% to 28,309.76
  • ASX 200 increased 106.90 points or 1.48% to 7,342.20
  • Kospi increased 23.09 points or 0.71% to 3,263.88
  • SENSEX increased 14.25 points or 0.03% to 52,588.71
  • Nifty50 increased 26.25 points or 0.17% to 15,772.75

 

The major Asian currency markets had a green day today:

  • AUDUSD increased 0.00142 or 0.19% to 0.75565
  • NZDUSD increased 0.0031 or 0.44% to 0.70251
  • USDJPY increased 0.32 or 0.29% to 110.68
  • USDCNY increased 0.01502 or 0.23% to 6.48020

 

Precious Metals:

Gold decreased 4.78 USD/t oz. or -0.27% to 1,778.17

Silver decreased 0.171 USD/t. oz or -0.66%% to 25.767

 

Some economic news from last night:

South Korea:

PPI (MoM) (May) decreased from 1.0% to 0.4%

PPI (YoY) (May) increased from 6.0% to 6.4%

New Zealand:

Westpac Consumer Sentiment (Q2) increased from 105.2 to 107.1

Credit Card Spending (YoY) decreased from 87.5% to 27.2%

 

 

Some economic news from today:

Japan:

BoJ Core CPI (YoY) increased from -0.1% to 0.0%

Hong Kong:

CPI (YoY) (May) increased from 0.70% to 1.00%

Indonesia:

M2 Money Supply (YoY) (May) decreased from 11.50% to 8.10%

EUROPE/EMEA:

UK food and drink exports to the EU fell by nearly a half in the first three months of 2021 compared to last year. Exports to the EU were down by £2bn, according to a report from the Food and Drink Federation, with sales to non-EU nations accounting for 55% of exports. According to Financial Times, due to various admin issues companies are struggling with the costs, paperwork and delays due to new customs and veterinary checks. Smaller businesses are having difficulties sending multiple shipments in a single load. Although exports to non-EU countries were up slightly by 0.3% to £2bn, overall food and drink exports were down by 28.1% to £3.7bn. Sales to Ireland, the UK’s biggest food and drink export market, were down by more than two thirds to £281m. Sales to Germany, Spain and Italy declined by more than half.

The major Europe stock markets had a green day today:

  • CAC 40 increased 8.96 points or 0.14% to 6,611.50
  • FTSE 100 increased 27.72 points, or 0.39% to 7,090.01
  • DAX 30 increased 33.09 points or 0.21% to 15,636.33

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.0024 or 0.20% to 1.19411
  • GBPUSD increased 0.00233 or 0.17% to 1.39479
  • USDCHF decreased 0.00001 or 0.00% to 0.91830

 

Some economic news from Europe today:

 

UK:

Public Sector Net Borrowing (May) decreased from 28.33B to 23.61B

Public Sector Net Cash Requirement (May) decreased from 33.520B to 21.710B

CBI Industrial Trends Orders (Jun) increased from 17 to 19

Italy:

Italian Industrial Sales (MoM) (Apr) increased from 1.70% to 3.30%

Italian Industrial Sales (YoY) (Apr) increased from 37.90% to 105.10%

Euro Zone:

Consumer Confidence (Jun)  increased from -5.1 to -3.3

 

US/AMERICAS:

Federal Reserve Chairman Jerome Powell met with lawmakers at Capitol Hill today to ease inflation and labor shortage concerns. Despite inflation rising “noticeably,” Powell sees the rise in consumer prices as a result of an increase in consumer demand due to eased COVID restrictions. As prices on numerous goods fell during the pandemic, YoY data may seem skewed. Overall, the Fed does not know exactly when prices will come down. However, Powell said the categories seeing the most significant inflation were directly tied to the reopening, using lumber as an example. “As these transitory supply effects abate, inflation is expected to drop back toward our longer-run goal,” Powell stated. He anticipates job gains to pick up in the coming months but noted that the pandemic has disproportionately harmed lower-wage workers. “We will not raise interest rates preemptively because we think employment is too high,” Powell stated with questioned on equal prosperity. When questioned further about income equality, Powell admitted that all groups experienced the lowest level of unemployment since the 1960s under the Trump Administration. When asked if the lockdown directly hurt the economy, Powell said that was something the Fed could not comment on.

Numerous lawmakers asked Chairman Powell about the labor shortage. There are around 9.3 million openings in the US, but only added 500k jobs were added in May. One member noted that 40% of those on unemployment make more on enhanced unemployment than at their previous jobs. Powell believes employment will increase over the year and attributed part of the shortage to COVID fears and schools closing, which he deemed temporary factors. Additionally, Powell noted that the original job surge was mainly composed of Americans returning to their former jobs. Now, people are predominately trying to find new jobs, and the process is longer. When asked if immigration would help the American workforce, Powell declined to comment. Powell said that we will see an uptick in employment in the fall, when the enhanced benefits expire, but he refused to comment on whether extending benefits hurt the economy and would not directly comment on whether the current unemployment policy is contributing the labor shortage.

Bumble, the dating app that was listed on the NYSE in February after raising $2.2 billion in its IPO, is the latest company to address worker burnout. CEO Whitney Wolfe Herd has asked her 700 employees to “focus on themselves for a week” and go fully offline. Other US companies such as Hootsuite recently adopted a similar “Wellness Week” policy to prevent worker burnout.

US Market Closings:

  • Dow advanced 68.61 points or 0.2% to 33,945.58
  • S&P 500 advanced 21.65 points or 0.51% to 4,246.44
  • Nasdaq advanced 111.79 points or 0.79% to 14,253.27
  • Russell 2000 advanced 9.85 points or 0.43% to 2,295.95

 

Canada Market Closings:

  • TSX Composite advanced 44.29 points or 0.22% to 20,200.65
  • TSX 60 advanced 1.39 points or 0.11% to 1,211.62

 

Brazil Market Closing:

  • Bovespa declined 497.51 points or -0.38% to 128,767.45

ENERGY:

The oil markets had a mixed day today:

Crude Oil decreased 0.59 USD/BBL or -0.80% to 73.0700

Brent increased 0.16 USD/BBL or 0.21% to 75.0600

Natural gas increased 0.071 USD/MMBtu or 2.23% to 3.2620

Gasoline increased 0.0303 USD/GAL or 1.38% to 2.2272

Heating oil increased 0.0284 USD/GAL or 1.34% to 2.1552

 

Top commodity gainers: Cocoa (2.25%), Platinum (2.39%), Bitumen (2.70%), and Rice(3.38%)

Top commodity losers: Lumber (-4.50%), Steel (-2.11%), Sugar (-1.85%), and Wheat (-1.47%)

The above data was collected around 17:00 EST on Tuesday.

 

BONDS:

Japan 0.053%(+1bp), US 2’s 0.2301% (-0.03%), US 10’s 1.4666%(-2.88bps); US 30’s 2.0886%(-0.03%), Bunds -0.162% (+1bp), France 0.167% (+0bp), Italy 0.9017% (+2bp), Turkey 17.24% (-5bp), Greece 0.859% (+4bp), Portugal 0.462% (+3bp), Spain 0.464% (+1bp) and UK Gilts 0.78% (+1bp).