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Market Talk – March 16, 2022

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Singapore’s economy might be less directly impacted by the war in Ukraine or the sanctions on Russia, but a potential hit to global growth and rising inflation can eventually put a dent on its economic outlook. Russia represents a rather small share of global gross domestic product (GDP) at about 1.6 per cent, and it is not one of Singapore’s major trading partners.

Singapore has maintained its growth forecast for this year at 3 to 5 percent as data on Thursday (Feb 17) showed the economy staging a recovery in 2021. The Singapore economy expanded 7.6 per cent last year, mainly lifted by the manufacturing, finance and insurance, and wholesale trade sectors, said the Ministry of Trade and Industry (MTI) in a press release.

The major Asian stock markets had a green day today:• NIKKEI 225 increased 415.53 points or 1.64% to 25,762.01• Shanghai increased 106.75 points or 3.48% to 3,170.71• Hang Seng increased 1,672.42 points or 9.08% to 20.087.50• ASX 200 increased 77.80 points or 1.10% to 7,175.20• Kospi increased 37.70 points or 1.44% to 2,659.23• SENSEX increased 1,039.80 points or 1.86% to 56,816.65• Nifty50 increased 312.35 points or 1.87% to 16,975.35The major Asian currency markets had a mixed day today:• AUDUSD increased 0.00590 or 0.83% to 0.72531• NZDUSD increased 0.00480 or 0.70% to 0.68133• USDJPY  increased 0.218 or 0.18% to 118.494• USDCNY decreased 0.01390 or -0.22% to 6.36931Precious Metals:• Gold decreased 6.99 USD/t oz. or -0.36% to 1,910.85• Silver decreased 0.217 USD/t. oz or -0.87% to 24.646Some economic news from last night:China:House Prices (YoY) (Feb) decreased from 2.3% to 2.0%Japan:Reuters Tankan Index (Mar) increased from 6 to 8Adjusted Trade Balance decreased from -0.93T to -1.03TExports (YoY) (Feb) increased from 9.6% to 19.1%Imports (YoY) (Feb) decreased from 38.7% to 34.0%Trade Balance (Feb) increased from -2,193.5B to -668.3BSouth Korea:Unemployment Rate (Feb) decreased from 3.6% to 2.7%Australia:MI Leading Index (MoM) increased from -0.3% to -0.2%New Zealand:Current Account (YoY) (Q4) decreased from -15.86B to -20.23BCurrent Account (QoQ) (Q4) increased from -8.30B to -7.26BCurrent Account % of GDP (Q4) decreased from -4.60% to -5.80%Some economic news from todayJapan:Capacity Utilization (MoM) (Jan) decreased from -0.4% to -3.2%Industrial Production (MoM) (Jan) increased from -1.3% to -0.8%EUROPE/EMEA:

The Federal Reserve has raised US interest rates for the first time since 2018 – now all eyes are now on the Bank of England to see whether it increases UK borrowing costs for a third time in succession. The reason it is a tough call for the Bank is that the economy is being pulled in two directions at once. On the one hand, inflationary pressure was strong even before Russia’s invasion of Ukraine gave an added upward twist to global commodity prices. Yet, on the other, UK households are facing the biggest squeeze on their real – inflation-adjusted – incomes for at least half a century. 

As the year wears on, and people have to contend with higher energy bills, higher food prices and higher taxes, the deflationary pressure will intensify.

The major Europe stock markets had a green day:• CAC 40 increased 233.64 points or 3.68% to 6,588.64• FTSE 100 increased 115.98 points or 1.62% to 7,291.68• DAX 30 increased 523.47 points or 3.76% to 14,440.74The major Europe currency markets had a green day today:• EURUSD increased 0.00380 or 0.35% to 1.10089• GBPUSD increased 0.00630 or 0.48% to 1.31105• USDCHF increased 0.00120 or 0.13% to 0.94192Some economic news from Europe today:Germany:Gemran Current Account Balance n.s.a (Jan) decreased from 24.6B to 11.0BItaly:Italian CPI (YoY) (Feb) increased from 4.8% to 5.7%Italian CPI (MoM) (Feb) decreased from 1.6% to 0.9%Italian CPI Ex Tobacco (MoM) (Feb) increased from 4.7% to 5.6%Italian HICP (YoY) (Feb) increased from 5.1% to 6.2%Italian HICP (MoM) (Feb) increased from 0.0% to 0.8%US/AMERICAS:

The Federal Open Market Committee (FOMC) approved of the first rate hike since December 2018. After maintaining the benchmark interest rate around zero, the central bank will raise rates by 25-basis points, bringing the range to 0.25%-0.5%. Furthermore, the committee plans to raise rates at each of their six remaining meetings in 2022, followed by stable rates throughout 2023. The decision was mostly unanimous aside from St. Louis Fed President James Bullard who requested a 50-point rise.

The central bank has also acknowledged that inflation will continue throughout the year and raised its personal consumption expenditures to 4.1%, compared to the initial forecast of 2.7%. Core PCE is expected to grow by 2.7% in 2022, and 2.3% in 2023. The forecast for overall GDP was lowered to 2.8% compared to the initial expectation of 4%. The FOMC believes unemployment will hover around 3.5%.

US Market Closings:

  • Dow advanced 518.76 points or 1.55% to 34,063.1
  • S&P 500 advanced 95.41 points or 2.24% to 4,357.86
  • Nasdaq advanced 487.93 points or 3.77% to 13,436.55
  • Russell 2000 advanced 61.75 points or 3.14% to 2,030.72


Canada Market Closings:

  • TSX Composite advanced 280.99 points or 1.33% to 21,468.83
  • TSX 60 advanced 15.92 points or 1.24% to 1,301.33


Brazil Market Closing:

  • Bovespa advanced 2,153.13 points or 1.98% to 111,112.43

ENERGY:The oil markets had a mixed day today:• Crude Oil increased 0.39 USD/BBL or 0.40% to 96.8300• Brent decreased 0.48 USD/BBL or -0.48% to 99.4300• Natural gas increased 0.129 USD/MMBtu or 2.82% to 4.6970• Gasoline decreased 0.0024 USD/GAL or -0.08% to 2.9957• Heating oil increased 0.0515 USD/GAL or 1.70% to 3.0812The above data was collected around 12:54 EST on Wednesday  • Top commodity gainers: Natural Gas (2.82%) and Platinum (2.38%), Bitumen(4.78%), Aluminum (2.73%)• Top commodity losers: Nickel (-5.41%), Wheat(-6.85%), Lumber(-18.87%) and Coal(-5.95%)The above data was collected around 13:00 EST on Wednesday.