Market Talk – March 1, 2023

ASIA:

China is willing to “constructively” participate in solving the debt problems of relevant countries under a multilateral framework, its Premier Li Keqiang said on Wednesday. China, the world’s largest bilateral creditor, has criticized multilateral lenders for not accepting losses, or haircuts, on loans to low-income countries while Beijing is being asked to do so on credit it has extended on its own. China urged Group of 20 nations last month to conduct a fair, objective and in-depth analysis of the causes of global debt problems as calls mount for lenders to help debt-laden poor countries by accepting large losses on their loans. China is a major lender to high-debt countries, such as Ghana and Zambia.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 70.97 points or 0.26% to 27,516.53
• Shanghai increased 32.74 points or 1.00% to 3,312.35
• Hang Seng increased 833.77 points or 4.21% to 20,619.71
• ASX 200 decreased 6.80 points or -0.09% to 7,251.60
• Kospi closed
• SENSEX increased 448.96 points or 0.76% to 59,411.08
• Nifty50 increased 146.95 points or 0.85% to 17,450.90

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00376 or 0.56% to 0.67656
• NZDUSD increased 0.00763 or 1.23% to 0.62583
• USDJPY decreased 0.299 or -0.22% to 135.901
• USDCNY decreased 0.0762 or -1.10% to 6.87770

Precious Metals:

• Gold increased 14.06 USD/t oz. or 0.77% to 1,841.21
• Silver increased 0.114 USD/t. oz or 0.54% to 21.026

Some economic news from last night:

China:

Chinese Composite PMI (Feb) increased from 52.9 to 56.4

Manufacturing PMI (Feb) increased from 50.1 to 52.6

Non-Manufacturing PMI (Feb) increased from 54.4 to 56.3

Caixin Manufacturing PMI (Feb) increased from 49.2 to 51.6

Australia:

AIG Manufacturing Index (Feb) increased from -17.1 to -6.4

CPI (YoY) decreased from 8.4% to 7.4%

GDP (QoQ) (Q4) decreased from 0.7% to 0.5%

GDP (YoY) (Q4) decreased from 5.9% to 2.7%

New Zealand：

Building Consents (MoM) (Jan) increased from -7.1% to -1.5%

Some economic news from today:

India:

Nikkei S&P Global Manufacturing PMI (Feb) decreased from 55.4 to 55.3

Australia:

Commodity Prices (YoY) decreased from 10.6% to 3.6%

EUROPE/EMEA:

The European Central Bank’s top three shareholders charted different paths for interest rates on Wednesday, in a preview of the difficult debate awaiting the ECB in the coming weeks. The central bank governors of Germany, France and Italy, which have the three biggest stakes in the ECB, aired their views as data showed inflation unexpectedly rose in several euro zone economies this month, fueling investor bets on more ECB hikes. Money markets were expecting the ECB deposit rate to peak at 4% in December, from 2.5% at present, pricing in another 50-basis point increase in May and then a steady grind higher in the remainder of the year.

The major Europe stock markets had a mixed day:

• CAC 40 decreased 33.68 points or -0.46% to 7,234.25
• FTSE 100 increased 38.65 points or 0.49% to 7,914.93
• DAX 30 decreased 60.12 points or -0.39% to 15,305.02

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00974 or 0.92% to 1.06734
• GBPUSD increased 0.0012 or 0.10% to 1.20320
• USDCHF decreased 0.00329 or -0.35% to 0.93881

Some economic news from Europe today:

UK:

Nationwide HPI (YoY) (Feb) decreased from 1.1% to -1.1%

Nationwide HPI (MoM) (Feb) increased from -0.6% to -0.5%

Manufacturing PMI (Feb) increased from 49.2 to 49.3

Swiss:

Retail Sales (YoY) (Jan) increased from -3.0% to -2.2%

procure.ch PMI (Feb) decreased from 49.3 to 48.9

Spain:

Spanish Manufacturing PMI (Feb) increased from 48.4 to 50.7

Italy:

Italian Manufacturing PMI (Feb) increased from 50.4 to 52.0

France:

French Manufacturing PMI (Feb) decreased from 47.9 to 47.4

Germany:

German Manufacturing PMI (Feb) decreased from 46.5 to 46.3

German Unemployment Change (Feb) increased from -15K to 2K

German Unemployment Rate (Feb) remain the same at 5.5%

German CPI (YoY) (Feb) remain the same at 8.7%

German CPI (MoM) (Feb) decreased from 1.0% to 0.8%

Euro Zone:

Manufacturing PMI (Feb) decreased from 48.8 to 48.5

US/AMERICAS:

Eli Lily & Co. has committed to capping the price of insulin at $35 per month. Washington has been pushing drugmakers to reduce the price of insulin for years, and this is a major breakthrough for millions of Americans suffering from diabetes. The cost marks a 70% decline in cost and will go into effect on May 1. Other pharmaceutical companies are expected to slash prices on this life saving medication.

The Mortgage Bankers Association announced that US home sales have begun to fall. Despite rates dropping to the 6% range last week, volume was 44% lower year-over-year. Mortgage applications are now at a 28-year low as limited supply, high housing costs, and high interest rates have prices many potential buyers out of the market.

US Market Closings:

• Dow advanced 5.14 points or 0.02% to 32,661.84
• S&P 500 declined 18.76 points or -0.47% to 3,951.39
• Nasdaq declined 76.06 points or -0.66% to 11,379.48
• Russell 2000 advanced 1.44 points or 0.08% to 1,898.43

Canada Market Closings:

• TSX Composite advanced 38.59 points or 0.19% to 20,259.78
• TSX 60 advanced 1.18 points or 0.1% to 1,217.91

Brazil Market Closing:

• Bovespa declined 547.26 points or -0.52% to 104,384.67

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 0.358 USD/BBL or -0.47% to 76.692
• Brent decreased 0.091 USD/BBL or -0.11% to 83.359
• Natural gas decreased 0.0397 USD/MMBtu or -1.45% to 2.7073
• Gasoline decreased 0.0048 USD/GAL or -0.18% to 2.6372
• Heating oil increased 0.0482 USD/GAL or 1.72% to 2.8538

The above data was collected around 12:04 EST on Wednesday

• Top commodity gainers: Heating Oil (1.72%), Rubber (3.52%), Aluminum (2.23%) and Zinc (2.94%)
• Top commodity losers: Oat (-6.30%), Rhodium (-7.66%), Sugar (-6.88%) and Lumber (-4.97%)

The above data was collected around 12:10 EST Wednesday.

BONDS:

Japan 0.504% (+0.3bp), US 2’s 4.87% (+0.069%), US 10’s 3.9709% (+5.69bps); US 30’s 3.94% (+0.007%), Bunds 2.705% (+7.1bp), France 3.185% (+6.6bp), Italy 4.558% (+8.5bp), Turkey 10.40% (+41bp), Greece 4.502% (+7.8bp), Portugal 3.600% (+8.5bp); Spain 3.736% (+5.8bp) and UK Gilts 3.84% (+1.6bp).

The post Market Talk – March 1, 2023 first appeared on Armstrong Economics.