Market Talk – February 22, 2023

ASIA:

South Korea’s producer price inflation slowed for a seventh straight month to its lowest in 22 months, central bank data showed on Thursday. The producer price index rose 5.1% in January from a year earlier, while it had climbed 5.8% in December, according to the Bank of Korea. It was the slowest annual rise since March 2021. The annual rate continued its slowing trend for a seventh straight month, after hitting a near 14-year high of 10.0% in June 2022. The index rose 0.4% over a month, however, after two straight months of declines, driven mostly by higher utility costs.

The major Asian stock markets had a negative day today:

• NIKKEI 225 decreased 368.78 points or -1.34% to 27,104.32
• Shanghai decreased 15.38 points or -0.47% to 3,291.15
• Hang Seng decreased 105.65 points or -0.51% to 20,423.84
• ASX 200 decreased 21.80 points or -0.30% to 7,314.50
• Kospi decreased 41.28 points or -1.68% to 2,417.68
• SENSEX decreased 927.74 points or -1.53% to 59,744.98
• Nifty50 decreased 272.40 points or -1.53% to 17,554.30

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00282 or -0.41% to 0.68238
• NZDUSD increased 0.00218 or 0.35% to 0.62338
• USDJPY decreased 0.287 or -0.21% to 134.703
• USDCNY increased 0.00965 or 0.14% to 6.90135

Precious Metals:

• Gold decreased 1.51 USD/t oz. or -0.08% to 1,832.81
• Silver decreased 0.19 USD/t. oz or -0.87% to 21.637

Some economic news from last night:

Australia:

Construction Work Done (QoQ) (Q4) decreased from 2.2% to -0.4%

Wage Price Index (QoQ) (Q4) decreased from 1.0% to 0.8%

New Zealand:

RBNZ Interest Rate Decision increased from 4.25% to 4.75%

Trade Balance (MoM) (Jan) decreased from -636M to -1,954M

Trade Balance (YoY) (Jan) decreased from -14,630M to -15,480M

Some economic news from today:

India:

M3 Money Supply decreased from 9.8% to 9.5%

Hong Kong:

GDP (QoQ) (Q4) increased from -2.6% to 0.0%

GDP (YoY) (Q4) remain the same at -4.2%

EUROPE/EMEA:

The post-pandemic rebound in world growth and inflation last year meant the amount of debt sloshing around the global economy saw its first annual fall in dollar terms since 2015, a widely tracked study has shown. The Institute of International Finance report published on Wednesday estimated that the nominal value of global debt declined by some $4 trillion, bringing it fractionally back under the $300 trillion threshold breached in 2021. In contrast, the amount of developing world debt hit a new record high of $98 trillion with Russia, Singapore, India, Mexico, and Vietnam seeing the largest individual rises. Stronger economic activity and higher inflation meanwhile, both of which erode debt levels, saw the global debt-to-GDP ratio drop over 12 percentage points to 338% of GDP, marking the second annual drop in a row.

The major Europe stock markets had a mixed day:

• CAC 40 decreased 9.39 points or -0.13% to 7,299.26
• FTSE 100 decreased 47.12 points or -0.59% to 7,930.63
• DAX 30 increased 2.27 points or 0.01% to 15,399.89

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.0021 or -0.20% to 1.06250
• GBPUSD decreased 0.00439 or -0.36% to 1.20711
• USDCHF increased 0.00206 or 0.22% to 0.92976

Some economic news from Europe today:

Germany:

German CPI (MoM) (Feb) increased from -0.8% to 1.0%

German CPI (YoY) (Feb) increased from 8.1% to 8.7%

German Business Expectations (Feb) increased from 86.4 to 88.5

German Current Assessment (Feb) decreased from 94.1 to 93.9

German Ifo Business Climate Index (Feb) increased from 90.1 to 91.1

Italy:

Italian CPI (MoM) (Jan) decreased from 0.3% to 0.1%

US/AMERICAS:

Inflation remains the primary concern for the Federal Reserve as indicated in the minutes reports released this Wednesday. The central bank only approved a 25 bps hike at the last meeting, marking the least significant hike since March of last year. However, a few members felt a 50 bps hike would have been appropriate as inflation remains “well above” the 2% target.  “Participants noted that inflation data received over the past three months showed a welcome reduction in the monthly pace of price increases but stressed that substantially more evidence of progress across a broader range of prices would be required to be confident that inflation was on a sustained downward path,” the minutes said. The tight labor market also remains problematic, and international conflicts add to economic uncertainty. Officials indicated that further hikes are almost guaranteed in the near term.

US Market Closings:

• Dow declined 84.5 points or -0.26% to 33,045.09
• S&P 500 declined 6.29 points or -0.16% to 3,991.05
• Nasdaq advanced 14.77 points or 0.13% to 11,507.07
• Russell 2000 advanced 6.46 points or 0.34% to 1,894.67

Canada Market Closings:

• TSX Composite declined 59.31 points or -0.29% to 20,193.33
• TSX 60 declined 4.58 points or -0.37% to 1,217.17

Brazil Market Closing:

• Bovespa declined 2,024.87 points or -1.85% to 107,152.05

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 2.101 USD/BBL or -2.75% to 74.259
• Brent decreased 2.151 USD/BBL or -2.59% to 80.899
• Natural gas increased 0.1717 USD/MMBtu or 8.28% to 2.2447
• Gasoline decreased 0.0845 USD/GAL or -3.50% to 2.3311
• Heating oil decreased 0.0547 USD/GAL or -1.96% to 2.7372

The above data was collected around 13:50 EST on Wednesday

• Top commodity gainers: Coffee (2.16%), HRC Steel (5.66%), Natural Gas (8.28%) and Orange Juice (2.29%)
• Top commodity losers: Gasoline (-3.50%), Lean Hogs (-2.84%), Crude Oil (-2.75%) and Brent (-2.59%)

The above data was collected around 14:00 EST Wednesday.

BONDS:

Japan 0.504% (-0.1bp), US 2’s 4.69% (-0.046%), US 10’s 3.9020% (-5.1bps); US 30’s 3.92% (-0.055%), Bunds 2.519% (-1.9bp), France 3.000% (-1.6bp), Italy 4.474% (+0.8bp), Turkey 10.30% (+10bp), Greece 4.488% (+3.9bp), Portugal 3.446% (+0.3bp); Spain 3.586% (-1.7bp) and UK Gilts 3.602% (-1.4bp).

The post Market Talk – February 22, 2023 first appeared on Armstrong Economics.