Market Talk – February 15, 2023

ASIA:

Chinese provinces spent more than £42.8bn on tackling Covid-19 in 2022, according to data released by local governments, with the figure expected to rise as the huge cost of the pandemic hits the world’s second-largest economy. Although national statistics are not yet available, at least 20 of China’s 31 provinces have published figures on how much money they spent on measures to control the pandemic. Different provinces measure their Covid-19 expenditures in different ways. Some include spending at all levels of government, while others only include provincial-level spending. Beijing spent 26.4bn yuan, mainly on epidemic control and prevention, the equivalent of about 111% of the city’s healthcare budget for last year. Shanghai, the country’s financial hub, spent 16.8bn yuan on similar Covid-prevention measures, including the construction of temporary hospitals. The two months of total lockdown in Shanghai hit the city’s economy, which contracted by 0.2% in 2022.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 decreased 100.91 points or -0.37% to 27,501.86
• Shanghai decreased 12.79 points or -0.39% to 3,280.49
• Hang Seng decreased 301.59 points or -1.43% to 20,812.17
• ASX 200 decreased 78.70 points or -1.06% to 7,352.20
• Kospi decreased 37.74 points or -1.53% to 2,427.90
• SENSEX increased 242.83 points or 0.40% to 61,275.09
• Nifty50 increased 86.00 points or 0.48% to 18,015.85

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00956 or -1.37% to 0.68894
• NZDUSD decreased 0.0063 or -0.99% to 0.62720
• USDJPY increased 1.194 or 0.90% to 134.304
• USDCNY increased 0.03369 or 0.49% to 6.86999

Precious Metals:

• Gold decreased 19.3 USD/t oz. or -1.04% to 1,834.99
• Silver decreased 0.226 USD/t. oz or -1.03% to 21.614

Some economic news from last night:

Japan:

Tertiary Industry Activity Index (MoM) decreased from 0.1% to -0.4%

Some economic news from today:

India:

Imports (USD) (Jan) decreased from 58.24B to 50.66B

Trade Balance (Jan) increased from -23.76B to -17.75B

Exports (USD) (Jan) decreased from 34.48B to 32.91B

EUROPE/EMEA:

Eurozone inflation remains far too high, and the European Central Bank will keep raising interest rates to dampen underlying price pressures, ECB President Christine Lagarde said on Wednesday, repeating the bank’s most recent policy guidance. The ECB has raised rates by a combined 300 basis points since July and promised another 50-basis-point to move in March to dampen inflation, which was initially driven by high energy costs but has broadened out to impact nearly all sectors. Inflation in the 20-nation euro zone fell to 8.5% in January from a peak of 10.6% in October, but the figure is subject to revision and the final figure is likely to be higher once German data is added in.

The major Europe stock markets had a green day:

• CAC 40 increased 87.05 points or 1.21% to 7,300.86
• FTSE 100 increased 43.98 points or 0.55% to 7,997.83
• DAX 30 increased 125.78 points or 0.82% to 15,506.34

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00582 or -0.54% to 1.06768
• GBPUSD decreased 0.01565 or -1.29% to 1.20135
• USDCHF increased 0.0036 or 0.39% to 0.92470

Some economic news from Europe today:

UK:

CPI (MoM) (Jan) decreased from 0.4% to -0.6%

CPI (YoY) (Jan) decreased from 10.5% to 10.1%

PPI Input (MoM) (Jan) increased from -1.1% to -0.1%

Spain:

Spanish CPI (YoY) (Jan) increased from 5.7% to 5.9%

Spanish HICP (YoY) (Jan) increased from 5.8% to 5.9%

Euro Zone:

Industrial Production (MoM) (Dec) decreased from 1.4% to -1.1%

Trade Balance (Dec) increased from -11.6B to -8.8B

 US/AMERICAS:

Americans are continuing to spend amid inflation, as indicated from the latest retail data released by the Commerce Department this Wednesday. Retail sales rose 3% in January, surpassing expectations of a 1.9% increase. Autos excluded, sales rose 2.3% for the month. Food services and restaurant patronage soared 7.2%, pushing the overall index higher. Motor vehicles and parts rose 5.9%, while furnishing rose 4.4%. In fact, no major category of spending experienced a decline and overall retail sales rose 6.4% in the past year, which matches Tuesday’s CPI report.

US Market Closings:

• Dow advanced 38.78 points or 0.11% to 34,128.05
• S&P 500 advanced 11.47 points or 0.28% to 4,147.6
• Nasdaq advanced 110.45 points or 0.92% to 12,070.59
• Russell 2000 advanced 21.06 points or 1.09% to 1,960.97

Canada Market Closings:

• TSX Composite advanced 15.6 points or 0.08% to 20,720.39
• TSX 60 advanced 0.68 of a point or 0.05% to 1,249.58

Brazil Market Closing:

• Bovespa advanced 1,751.33 points or 1.62% to 109,600.14

ENERGY:

The oil markets had a mixed day today:

• Crude Oil increased 0.09 USD/BBL or 0.11% to 79.150
• Brent increased 0.002 USD/BBL or 0.00% to 85.582
• Natural gas decreased 0.0658 USD/MMBtu or -2.56% to 2.5012
• Gasoline increased 0.0117 USD/GAL or 0.47% to 2.5002
• Heating oil decreased 0.0905 USD/GAL or -3.08% to 2.8496

The above data was collected around 13:55 EST on Wednesday

• Top commodity gainers: Steel (1.55%), HRC Steel (1.13%), Polyvinyl (0.61%), and Cocoa (2.75%)
• Top commodity losers: Cotton (-3.68%), Coffee (-3.60%), Natural Gas (-2.56%), and Heating Oil (-3.08%)

The above data was collected around 14:03 EST on Wednesday

BONDS:

Japan 0.500%(+0bp), US 2’s 4.63% (+0.005%), US 10’s 3.8068%(+4.58bps); US 30’s 3.85% (+0.051%), Bunds 2.471% (+2.5bp), France 2.935% (+2.8bp), Italy 4.327% (+9.2bp), Turkey 10.99% (-22bp), Greece 4.239% (+1.1bp), Portugal 3.371% (+6.1bp); Spain 3.515% (+5.6bp) and UK Gilts 3.483% (-4.1bp).

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