Market Talk – February 14, 2023

ASIA:

The Agricultural Bank of China, one of the country’s largest commercial lenders, has pledged stronger financial support for spring farming. The bank said it will strive to issue more than 160 billion yuan ($23.48 billion) in loans for spring farming preparations this year and will improve the efficiency of financial services. The financial support will focus on large-scale grain growers, family farms, and farmers’ cooperatives, among other agricultural entities, the bank said. Preferential loan interest rates, exclusive credit products, and service fee reductions and exemptions will also be provided, according to the bank.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 175.45 points or 0.64% to 27,602.77
• Shanghai increased 9.12 points or 0.28% to 3,293.28
• Hang Seng decreased 50.66 points or -0.24% to 21,113.76
• ASX 200 increased 13.10 points or 0.18% to 7,430.90
• Kospi increased 12.94 points or 0.50% to 2,465.64
• SENSEX increased 600.42 points or 0.99% to 61,032.26
• Nifty50 increased 158.95 points or 0.89% to 17,929.85

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00166 or 0.24% to 0.69816
• NZDUSD decreased 0.00111 or -0.17% to 0.63379
• USDJPY increased 0.658 or 0.50% to 133.058
• USDCNY increased 0.01397 or 0.20% to 6.83717

Precious Metals:

• Gold increased 0.54 USD/t oz. or 0.03% to 1,853.93
• Silver decreased 0.12 USD/t. oz or -0.55% to 21.850

Some economic news from last night:

Japan:

Industrial Production (MoM) (Dec) increased from -0.1% to 0.3%

GDP (QoQ) (Q4) increased from -0.3% to 0.2%

GDP (YoY) (Q4) increased from -1.0% to 0.6%

Australia:

Westpac Consumer Sentiment (Feb) decreased from 5.0% to -6.9%

NAB Business Confidence (Jan) increased from -1 to 6

New Zealand:

Inflation Expectations (QoQ) decreased from 3.6% to 3.3%

Some economic news from today:

India:

WPI Inflation (YoY) (Jan) decreased from 4.95% to 4.73%

EUROPE/EMEA:

The Bank of England will make its final increase to borrowing costs in the current cycle next month to combat double-digit inflation, according to a Reuters poll which showed the British economy is almost certainly entering a recession. On the first major banks to begin lifting interest rates after the worst of the COVID pandemic, the BoE has already added 390 basis points to the Bank Rate. The Feb. 9-13 poll showed it would deliver another 25-basis-point hike on March 23, taking the rate to 4.25 percent. The U.S. Federal Reserve and the European Central Bank are also close to winding down their policy tightening campaigns but are a little further from the end than the BoE, separate Reuters polls found.

The major Europe stock markets had a mixed day:

• CAC 40 increased 5.22 points or 0.07% to 7,213.81
• FTSE 100 increased 6.25 points or 0.08% to 7,953.85
• DAX 30 decreased 16.78 points or -0.11% to 15,380.56

The major Europe currency markets had a green day today:

• EURUSD increased 0.00037 or 0.03% to 1.07237
• GBPUSD increased 0.00199 or 0.16% to 1.21549
• USDCHF increased 0.00294 or 0.32% to 0.92214

Some economic news from Europe today:

UK:

Average Earnings Index +Bonus (Dec) decreased from 6.5% to 5.9%

Claimant Count Change (Jan) decreased from -3.2K to -12.9K

Employment Change 3M/3M (MoM) (Dec) increased from 27K to 74K

Labour Productivity remain the same at 0.3%

Unemployment Rate (Dec) remain the same at 3.7%

Swiss:

PPI (MoM) (Jan) increased from -0.7% to 0.7%

Euro Zone:

GDP (QoQ) (Q4) decreased from 0.3% to 0.1%

GDP (YoY) (Q4) decreased from 2.3% to 1.9%

US/AMERICAS:

The US Labor Department released troubling news on inflation this Tuesday — the consumer price index (CPI) jumped to 6.4% in January on an annual basis and 0.5% monthly. Core CPI, excluding energy and food, rose 5.6% on the yearly level and 0.4% monthly. The unsustainable cost of living pushed CPI higher, according to the Bureau of Labor Statistics, which reported that shelter costs rose 7.9% from last year and 0.7% since December. This caused hourly earnings to fall 1.8% YoY and 0.2% MoM. Energy costs are up as well, 2% MoM and 8.7% YoY. Food costs 10.1% more than it did a year ago. The general consensus is that the Federal Reserve will raise rates again at the March meeting in an effort to control price stability.

US Market Closings:

• Dow declined 156.66 points or -0.46% to 34,089.27
• S&P 500 declined 1.16 points or -0.03% to 4,136.13
• Nasdaq advanced 68.36 points or 0.57% to 11,960.15
• Russell 2000 declined 1.23 points or -0.06% to 1,939.91

Canada Market Closings:

• TSX Composite advanced 2.56 points or 0.01% to 20,704.79
• TSX 60 declined 0.92 of a point or -0.07% to 1,248.9

Brazil Market Closing:

• Bovespa declined 987.66 points or -0.91% to 107,848.81

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 1.023 USD/BBL or -1.28% to 79.117
• Brent decreased 1.177 USD/BBL or -1.36% to 85.433
• Natural gas increased 0.1848 USD/MMBtu or 7.68% to 2.5898
• Gasoline decreased 0.0441 USD/GAL or -1.74% to 2.4870
• Heating oil increased 0.0387 USD/GAL or 1.33% to 2.9444

The above data was collected around 14:12 EST on Tuesday

• Top commodity gainers: Natural Gas (7.68%), Coffee (2.97%), Sugar (1.51%), and Cocoa (1.49%)
• Top commodity losers: Lumber (-2.73%), Palladium (-4.37%), Bitumen (-1.80%), and Platinum (-2.24%)

The above data was collected around 14:20 EST on Tuesday

BONDS:

Japan 0.500%(+0bp), US 2’s 4.63% (+0.094%), US 10’s 3.7684%(+4.94bps); US 30’s 3.81% (+0.016%), Bunds 2.433% (+5.9bp), France 2.892% (+6.4bp), Italy 4.232% (+5.5bp), Turkey 11.21% (+13bp), Greece 4.228% (+1.2bp), Portugal 3.306% (+6.9bp); Spain 3.445% (+5.5bp) and UK Gilts 3.524% (+12bp).

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