Market Talk – March 31, 2020

ASIA:

In India, coronavirus cases continue to rise despite a complete lockdown and crossed 1,100-mark yesterday. India reported the biggest single-day spike in new COVID-19 cases at 200 today. As of Tuesday, the number of infected cases in India has increased to 1,300, with 102 recovered cases. The death toll from coronavirus in India has risen to 38.

India’s benchmark indices Sensex and Nifty closed near day’s high on Tuesday, as market sentiments were buoyed on positive global cues. Sensex ended 1,028 points higher at 29,468 and Nifty closed 316 points to trade at 8,597. Overall, 25 out of 30 stocks on Sensex and 40 out of 50 stocks on Nifty closed in green territory today.

India’s civil aviation ministry has announced setting up of a “cargo air-bridge” between India and China, and said that regular cargo flights for transporting critical medical supplies between the two countries are likely to be operated by India’s national carrier Air India from April 3 for India’s fight against coronavirus.

China’s health officials said on Tuesday that their numbers are not entirely giving the full picture of the coronavirus. They said one reason could be that they only tested people who were really sick and they did not usually test those in the sick patients’ family or social circle. Considering that Hubei province was on strict quarantine, asymptomatic people were less likely to spread the disease beyond their own household. Those that did get it, but had mild, weak, or no symptoms at all were — by and large — not included in the total infection numbers.

China’s National Health Commission (NHC) said on Tuesday that they will include asymptomatic coronavirus carriers in its daily figures starting tomorrow. So, if China’s numbers rise fast in the days ahead, that’s probably the reason.

China’s official manufacturing Purchasing Managers’ Index for March came in better than some analysts expected. China on Tuesday said its official manufacturing PMI for March came in at 52.0, indicating an expansion and defying expectations of a contraction. Analysts polled by Reuters had expected the figure to come in at 45 for the month.

Tokyo’s Governor Koike Yuriko met Prime Minister Abe Shinzo on Tuesday to discuss the situation and urged him to decide on emergency declaration as the number of confirmed cases continues to rise in the Japanese capital. Koike said she wants Abe to use Tokyo as a reference for deciding whether to declare a state of emergency.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 167.96 points or -0.88% to 18,917.01
  • Shanghai increased 3.08 points or 0.11% to 2,750.30
  • Hang Seng increased 428.37 points or 1.85% to 23,603.48
  • ASX 200 decreased 104.60 points or -2.02% to 5,076.80
  • Kospi increased 37.52 points or 2.19% to 1,754.64
  • SENSEX increased 1,028.17 points or 3.62% to 29,468.49

The major Asian currency markets had a negative day today:

  • AUDUSD decreased 0.00444 or -0.72% to 0.61166
  • NZDUSD decreased 0.00647 or -1.08% to 0.59373
  • USDJPY decreased 0.41 or -0.38% to 107.72
  • USDCNY decreased 0.01723 or -0.24% to 7.09607

Precious Metals:

  • Gold decreased 25.95 USD/t oz. or -1.61% to 1,588.80
  • Silver increased 0.0205 USD/t. oz or 0.15% to 14.0225

Some economic news from last night:

South Korea:

Manufacturing BSI Index (Apr) decreased from 66 to 52

Industrial Production (MoM) (Feb) decreased from -1.3% to -3.8%

Industrial Production (YoY) (Feb) increased from -2.6% to 11.4%

Retail Sales (MoM) decreased from -3.1% to -6.0%

Service Sector Output (MoM) (Feb) decreased from 0.5% to -3.5%

New Zealand:

Building Consents (MoM) (Feb) increased from -2.8% to 4.7%

ANZ Business Confidence (Mar) decreased from -19.4 to -63.5

NBNZ Own Activity (Mar) decreased from 12.0% to -26.7%

Australia:

HIA New Home Sales (MoM) increased from 5.7% to 6.2%

Housing Credit (Feb) remain the same at 0.3%

Private Sector Credit (MoM) (Feb) remain the same at 0.4%

China:

Chinese Composite PMI (Mar) increased from 28.9 to 53.0

Manufacturing PMI (Mar) increased from 35.7 to 52.0

Non-Manufacturing PMI (Mar) increased from 29.6 to 52.3

Japan:

Jobs/applications ratio (Feb) decreased from 1.49 to 1.45

Unemployment Rate (Feb) remain the same at 2.4%

Industrial Production (MoM) (Feb) decreased from 1.0% to 0.4%

Industrial Production forecast 1m ahead (MoM) (Mar) decreased from 5.3% to -5.3%

Industrial Production forecast 2m ahead (MoM) (Apr) increased from -6.9% to 7.5%

Retail Sales (YoY) (Feb) increased from -0.4% to 1.7%

Singapore:

Bank Lending (Feb) increased from 691.2B to 692.8B

Some economic news from today:

Japan:

Housing Starts (YoY) (Feb) decreased from -10.1% to -12.3%

Construction Orders (YoY) (Feb) increased from -17.0% to 0.7%

Hong Kong:

M3 Money Supply (Feb) decreased from 2.4% to 1.8%

Retail Sales (YoY) (Feb) decreased from -21.4% to -44.0%

India:

Federal Fiscal Deficit (Feb) increased from 9,854.72B to 10,364.85B

Infrastructure Output (YoY) (Feb) increased from 2.2% to 5.5%

Foreign Debt (USD) (Q4) increased from 557.5B to 563.9B

Indonesia:

M2 Money Supply (YoY) (Feb) increased from 7.10% to 7.90%

EUROPE/EMEA:

Hungary’s decision to give complete power to current Prime Minister Viktor Orban without a time limit has been described as against EU law. EU commission head Ursula von der Leyen issued a statement stating that all measures must be propotionate and not against fundamental principles and values when handling the virus.

Germany’s to no back the “coronabonds” could risk the entire idea of the European Union. There has also been hints that some member states should take in patients from the worst hit areas such as Italy and Spain as their medical infrastructure is at full capacity.

A report surfacing from the EU commission has suggested that the current crisis could be worse than the 2008/09 financial crisis in which the EU GDP dropped by 4.3%.

The major Europe stock markets had a green day today:

  • CAC 40 increased 17.61 points or 0.40% to 4,396.12
  • FTSE 100 increased 108.22 points, or 1.95% to 5,671.96
  • DAX 30 increased 119.87 points or 1.22% to 9,935.84

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00138 or -0.13% to 1.10132
  • GBPUSD increased 0.00704 or 0.57% to 1.24214
  • USDCHF increased 0.00373 or 0.39% to 0.96383

Some economic news from Europe today:

UK:

GfK Consumer Confidence (Mar) decreased from -7 to -9

Business Investment (QoQ) (Q4) increased from -1.0% to -0.5%

Business Investment (YoY) (Q4) increased from 0.9% to 1.8%

Current Account (Q4) increased from -15.9B to -5.6B

GDP (YoY) (Q4) remain the same at 1.1%

GDP (QoQ) (Q4) decreased from 0.4% to 0.0%

Germany:

German Import Price Index (MoM) (Feb) decreased from -0.4% to -0.9%

German Import Price Index (YoY) (Feb) decreased from -0.9% to -2.0%

German Unemployment Change (Mar) increased from -8K to 1K

German Unemployment Rate (Mar) remain the same at 5.0%

German Unemployment (Mar) increased from 2.266M to 2.267M

German Unemployment n.s.a. (Mar) decreased from 2.396M to 2.335M

Norway:

Credit Indicator (YoY) (Feb) decreased from 5.0% to 4.8%

Central Bank Currency Purchase (Mar) decreased from -500.0M to -2,000.0M

Swiss:

Retail Sales (YoY) (Feb) increased from -0.1% to 0.3%

France:

French Consumer Spending (MoM) (Feb) increased from -1.2% to -0.1%

French CPI (YoY) decreased from 1.4% to 0.6%

French CPI (MoM) remain the same at 0.0%

French HICP (YoY) decreased from 1.6% to 0.7%

French HICP (MoM) remain the same at 0.0%

French PPI (MoM) (Feb) decreased from -0.1% to -0.6%

Spain:

Spanish GDP (YoY) (Q1) decreased from 1.9% to 1.8%

Spanish GDP (QoQ) (Q1) remain the same at 0.4%

Spanish Current account (Jan) decreased from 2.21B to -1.73B

Italy:

Italian CPI (YoY) (Mar) decreased from 0.3% to 0.1%

Italian CPI (MoM) (Mar) increased from -0.1% to 0.1%

Italian HICP (YoY) (Mar) decreased from 0.2% to 0.1%

Italian HICP (MoM) (Mar) increased from -0.5% to 2.2%

Italian PPI (MoM) (Feb) decreased from -0.2% to -0.4%

Italian PPI (YoY) (Feb) decreased from -2.3% to -2.6%

Euro Zone:

Core CPI (MoM) increased from 0.2% to 0.5%

Core CPI (YoY) decreased from 1.2% to 1.0%

CPI (YoY) (Mar) decreased from 1.2% to 0.7%

CPI (MoM) increased from 0.2% to 0.5%

CPI, n.s.a (Mar) increased from 104.56 to 105.12

HICP ex Energy & Food (YoY) (Mar) decreased from 1.3% to 1.2%

US/AMERICAS:

Consumer confidence is on the decline in the United States, according to data released by the Conference Board’s Consumer Confidence Index this Tuesday. March’s figure dropped to 120 from 132.6 in February. Figures for current business and labor conditions dropped to 169.3 from 167.7, and short-term workforce expectations plunged to 88.2 from 108.1 the month prior. Consumer confidence overall is expected to continue declining into April amid another month of social distancing measures due to COVID-19.

The Internal Revenue Service (IRS) stated they will directly deposit COVID-19 relief checks into citizens’ accounts. Treasury Secretary Steven Mnuchin said that Americans can expect to receive their money within the next three weeks. The government is also working on creating a website for citizens who do not have a bank account linked to their annual tax records.

Quebec Premier Francois Legault stated this Tuesday that his biggest concern is running out of proper medical supplies, stating that certain medical supplies will only last for the next week. New shipments are expected to arrive in the province in the coming days, but Legault is urging for some consistency in the supply chain.

Finance Minister Bill Morneau announced yesterday that the government is suspending lease payments from March to December for 21 major airports that pay rent to lease federal government land. The measure is expected to provide C$331.4 million in relief for Canadian airlines.

US Market Closings:

  • Dow declined 410.32 points or -1.84% to 21,917.16
  • S&P 500 declined 42.06 points or -1.6% to 2,584.59
  • Nasdaq declined 74.05 points or -0.95% to 7,700.10
  • Russell 2000 declined 5.21 points or -0.45% to 1,153.10

Canada Market Closings:

  • TSX Composite advanced 340.25 points or 2.61% to 13,378.75
  • TSX 60 advanced 21.29 points or 2.67% to 819.89

Brazil Market Closing

  • Bovespa declined 1,619.72 points or -2.17% to 73,019.76

ENERGY:

China posted stronger than expected manufacturing data which helped to initially push the Crude markets up today. However, as the day closed WTI remained up and above 20 USD but Brent continued to slide to 26 USD. The Crude markets hit an 18-year low as the panic regarding the coronavirus continues to spread.

The oil markets had a mixed day today:

  • Crude Oil increased 0.76 USD/BBL or 3.78% to 20.8500
  • Brent decreased 0.01 USD/BBL or -0.04% to 22.7500
  • Natural gas decreased 0.061 USD/MMBtu or -3.59% to 1.6360
  • Gasoline increased 0.0079 USD/GAL or 1.19% to 0.6716
  • Heating oil decreased 0.0035 USD/GAL or -0.34% to 1.0295
  • Top commodity gainers: Crude Oil (3.78%), Feeder Cattle (1.84%), Live Cattle (3.19%), and Copper (3.64%)
  • Top commodity losers: Natural Gas (-3.59%), Lumber (-4.89%), Steel (-3.31%), and Sugar (-2.61%)

The above data was collected around 14.25 EST on Tuesday.

BONDS:

Japan 0.01%(-0bp), US 2’s 0.21% (-3bps), US 10’s 0.66%(-5bps); US 30’s 1.31%(-1bps), Bunds -0.53% (-5bp), France -0.10% (-3bp), Italy 1.54% (+4bp), Turkey 13.12% (+26bp), Greece 1.69% (+6bp), Portugal 0.80% (+12bp); Spain 0.69% (+10bp) and UK Gilts 0.34% (+1bp).

  • Italian 5-Year BTP Auction increased from 0.36% to 0.80%
  • Italian 10-Year BTP Auction increased from 1.29% to 1.48%