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Market Talk – March 10, 2022

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China has set its lowest annual GDP target in decades, as premier Li Keqiang warned of a “grave and uncertain” outlook against the backdrop of the coronavirus, a slowing economy and the war in Ukraine. Li announced on Saturday the unusually modest target of about 5.5% growth for 2022 – the lowest since 1991 – in an address to about 3,000 members of the National People’s Congress in Beijing’s cavernous Great Hall of the People. China’s economy last year handily exceeded the official target of at least 6% growth, expanding by 8.1%, but the pace slowed significantly in the second half. Li pledged to support growth through tax relief and measures to keep real estate prices and markets stable.

China has so far avoided openly condemning the actions of its diplomatic partner Russia, and Li made no direct reference to the conflict in his report on Saturday. But Thornton said concern over the fallout from the Russian invasion was reflected in Beijing’s projections of the downward pressures on the Chinese economy.

Shares of Indian airline operators Interglobe Aviation and Spicejet surged on Wednesday, a day after the government said scheduled commercial flight operations to international destinations would resume from March 27. Interglobe Aviation and Spicejet jumped as much as 8% and 6.4% in early trade, and were up 5.5% and 4.7%, respectively as of 0452 GMT. The move will be a boost for Indian airlines as demand for travel has rebounded in recent months, with both Interglobe Aviation, which operates the country’s biggest airline IndiGo, and Spicejet reporting profit in the December quarter after two years of being ravaged by the pandemic.

The major Asian stock markets had a green day today:• NIKKEI 225 increased 972.87 points or 3.94% to 25,690.40• Shanghai increased 39.70 points or 1.22% to 3,296.09• Hang Seng increased 262.55 points or 1.27% to 20.890.26• ASX 200 increased 77.80 points or 1.10% to 7,130.80• Kospi increased 57.92 points or 2.21% to 2,680.32• SENSEX increased 817.06 points or 1.50% to 55,464.39• Nifty50 increased 249.55 points or 1.53% to 16,594.90The major Asian currency markets had a green day today:• AUDUSD increased 0.0048 or 0.66% to 0.73590• NZDUSD increased 0.00326 or 0.48% to 0.68653• USDJPY  increased 0.116 or 0.10% to 116.045• USDCNY  increased 0.00404 or 0.06% to 6.32748Precious Metals:• Gold increased 5.52USD/t oz. or 0.28% to 1,997.01• Silver increased 0.203 USD/t. oz or 0.79% to 25.936Some economic news from last night:Japan:Foreign Bonds Buying decreased from -328.4B to -364.3BForeign Investments in Japanese Stocks decreased from -402.6B to -910.3BPPI (MoM) (Feb) remain the same at 0.8%PPI (YoY) (Feb) increased from 8.9% to 9.3%Australia:MI Inflation Expectations increased from 4.6% to 4.9%Building Approvals (MoM) decreased from 8.2% to -27.9%Private House Approvals decreased from -1.8% to -17.5%New Zealand:Electronic Card Retail Sales (MoM) (Feb) decreased from 3.0% to -7.8%Electronic Card Retail Sales (YoY) (Feb) decreased from 5.7% to 1.1%

The European Central Bank will stop pumping money into financial markets this summer, it said on Thursday, paving the way for an increase in interest rates as soaring inflation outweighs concerns about the fallout from Russia’s invasion of Ukraine. With price growth in the euro zone at a record high even before Moscow began its assault on Feb. 24, the ECB was under pressure to at least stop adding fuel to the fire through its long-running asset-purchase program. ECB President Christine Lagarde said the conflict was a “watershed for Europe,” which would curb growth but boost inflation. While the bank announced modest growth downgrades for this year and next, it ramped up inflation forecasts more strongly and now expected price growth of 5.1% this year, 2.1% next year, and 1.9% in 2024.

Goldman Sachs Group Inc and JPMorgan Chase became the first US banks to wind down business in Russia after it invaded Ukraine, while Credit Suisse said it had gross exposure to Russia of 1.6 billion Swiss francs ($1.73 billion) at the end of last year. Goldman Sachs, which has a credit exposure to Russia of $650 million, said on Thursday it was winding down its business there, in a move that will likely increase pressure on rival lenders to follow. Any losses would be “immaterial,” according to a source familiar with the situation. JPMorgan has about 160 staff in Moscow. The bank did not list Russia in the top 20 countries where it has the most exposure in its most recent filings.

The major Europe stock markets had a negative day:• CAC 40 decreased 180.63 points or -2.83% to 6,207.20• FTSE 100 decreased 91.63 points or -1.27% to 7,099.09• DAX 30 decreased 405.83 points or -2.93% to 13,442.10The major Europe currency markets had a mixed day today:• EURUSD decreased 0.00684 or -0.62% to 1.10019• GBPUSD decreased 0.00685 or -0.52% to 1.31091• USDCHF increased 0.00379 or 0.41% to 0.93037Some economic news from Europe today:UK:RICS House Price Balance (Feb) increased from 74% to 79%Thomson Reuters IPSOS PCSI (Mar) decreased from 51.7 to 51.5Norway:Core CPI YTD (Feb) increased from 1.3% to 2.1%Core Inflation (MoM) (Feb) increased from -0.3% to 1.2%CPI (YoY) (Feb) increased from 3.2% to 3.7%CPI (MoM) (Feb) increased from -0.9% to 1.1%PPI (YoY) (Feb) decreased from 58.2% to 53.2%Italy:Italian PPI (YoY) (Jan) increased from 22.8% to 32.9%Italian PPI (MoM) (Jan) increased from 1.1% to 9.7%Italy Thomson Reuters IPSOS PCSI (Mar) decreased from 46.38 to 42.91Germany:Germany Thomson Reuters IPSOS PCSI (Mar) decreased from 54.56 to 51.93France:France Thomson Reuters IPSOS PCSI (Mar) increased from 46.25 to 46.63Euro Zone:Deposit Facility Rate (Mar) remain the same at -0.50%ECB Marginal Lending Facility remain the same at 0.25%ECB Interest Rate Decision (Mar) remain the same at 0.00%US/AMERICAS:

The much-anticipated US inflation report is in – 7.9%! The 7.9% increase is the highest on record since January 1982. On a monthly basis, inflation spiked 0.8% from January, when prices had already reached a 40-year high. The markets had priced in this rise as most surveyed by Dow Jones expected a 7.8% increase in February. Food costs increased 1%, while food at home rose 14%. Energy accounted for one-third of inflation after jumping 3.5%. Housing costs, accounting for one-third of CPI, rose 0.5%, marking the fastest acceleration since May 1991. Core prices overall increased 6.4%, another 40-year high.

America’s largest bank by assets is retreating from Russia, JPMorgan Chase announced this Thursday. The bank will remain limited operations to help “global clients address and close out pre-existing obligations; managing their Russian-related risk; acting as a custodian to our clients; and taking care of our employees,” a spokeswoman stated. Goldman Sachs announced a similar move earlier in the day as the US banking industry aims to distance itself from Russia.

US Market Closings:

  • Dow declined 112.18 points or -0.34% to 33,174.07
  • S&P 500 declined 18.36 points or -0.43% to 4,259.52
  • Nasdaq declined 125.58 points or -0.95% to 13,129.96
  • Russell 2000 declined 4.62 points or -0.23% to 2,011.67


Canada Market Closings:

  • TSX Composite advanced 88.47 points or 0.41% to 21,581.7
  • TSX 60 advanced 4.47 points or 0.34% to 1,305.81


Brazil Market Closing:

  • Bovespa declined 237.21 points or -0.21% to 113,663.13

ENERGY:The oil markets had a mixed day today:• Crude Oil decreased 0.05 USD/BBL or -0.05% to 108.6500• Brent increased 0.33 USD/BBL or 0.30% to 111.4700• Natural gas increased 0.081 USD/MMBtu or 1.79% to 4.6070• Gasoline decreased 0.075 USD/GAL or -2.28% to 3.2188• Heating oil decreased 0.1144 USD/GAL or -3.30% to 3.3499The above data was collected around 12:28 EST on Thursday • Top commodity gainers: Natural Gas (1.79%) and Copper (1.70%), Corn(3.71%), Aluminum (3.11%)• Top commodity losers: Bitumen (-7.40%), Rhodium(-8.37%), Coal(-9.66%) and Methanol(-5.73%)The above data was collected around 12:34 EST on Thursday.BONDSJapan 0.1950%(+3.6bp), US 2’s 1.72% (+0.045%), US 10’s 2.0144% (+6.3bps); US 30’s 2.38% (+0.052%), Bunds 0.281% (+9bp), France 0.762% (+11.5bp), Italy 1.9310% (+25.9bp), Turkey 24.28% (+0bp), Greece 2.5620% (+18.3bp), Portugal 1.146% (+15.9bp); Spain 1.290% (+15.3bp) and UK Gilts 1.537% (+1.1bp).