Market Talk – March 2, 2023

ASIA:

U.S. President Joe Biden’s nominee to lead the World Bank, ex-Mastercard Chief Executive Officer Ajay Banga, said he plans to travel to Europe, Asia, Africa and potentially Latin America in coming weeks to hear from donor countries and borrowers on challenges facing the global institution. Biden last week nominated Banga, to head the World Bank, betting the India-born executive’s ties to the private sector and decades of experience in emerging markets will bring fresh momentum to a U.S.-led push to overhaul the 77-year-old institution to better address climate change. Banga, who oversaw the expansion of Mastercard’s market capitalization to $360 billion from $20 billion during his 12-year tenure there, said he had already gotten support from India, Ghana and Kenya, but hoped to visit as many countries around the world “as logistically possible” over the next three weeks to understand their priorities and concerns.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 decreased 17.66 points or -0.06% to 27,498.87
• Shanghai decreased 1.69 points or -0.05% to 3,310.65
• Hang Seng decreased 190.25 points or -0.92% to 20,429.46
• ASX 200 increased 3.80 points or 0.05% to 7,255.40
• Kospi increased 15.00 points or 0.62% to 2,427.85
• SENSEX decreased 501.73 points or -0.84% to 58,909.35
• Nifty50 decreased 129.00 points or -0.74% to 17,321.90

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00358 or -0.53% to 0.67252
• NZDUSD decreased 0.00473 or -0.76% to 0.62157
• USDJPY increased 0.611 or 0.45% to 136.771
• USDCNY increased 0.04531 or 0.66% to 6.92371

Precious Metals:

• Gold decreased 0.97 USD/t oz. or -0.05% to 1,835.84
• Silver decreased 0.136 USD/t. oz or -0.65% to 20.860

Some economic news from last night:

Japan:

Capital Spending (YoY) (Q4) decreased from 9.8% to 7.7%

Australia:

Building Approvals (MoM) (Jan) decreased from 15.3% to -27.6%

Some economic news from today:

Japan:

Household Confidence (Feb) increased from 31.0 to 31.1

Hong Kong:

Retail Sales (YoY) (Jan) increased from 1.1% to 7.0%

EUROPE/EMEA:

Major central banks resumed their quest to ramp up interest rates in February after a tepid start to the year with price pressures proving stickier than markets and many policy makers had hoped for. February saw six interest rate hikes across six meetings by central banks overseeing the 10 most heavily traded currencies. Policy makers in Australia, Sweden, New Zealand and Britain joined the U.S. Federal Reserve and the European Central Bank in lifting key lending rates by a total of 250 basis points (bps). All banks expected more hikes ahead. January had seen just one interest rate hike of 25 bps by Canada across three meetings by G10 central banks. Recent inflation and labor data from some of the world’s top economies had surprised markets and prompted analysts to lift expectations on where Fed and ECB rates will peak. Markets now price ECB rates peaking at just above 4% at the turn of the year, while Fed rates are seen as high as 5.5%-5.75%. In emerging markets, the rate hike push showed some evidence of slowing down. Thirteen out of 18 central banks in the Reuters sample of developing economies met to decide on rate moves, but only four hiked by a total of 175 bps — Mexico, Israel, the Philippines and India. Turkey delivered a 50 bps cut in the wake of the deadly earthquake.

The major Europe stock markets had a green day:

• CAC 40 increased 49.97 points or 0.69% to 7,284.22
• FTSE 100 increased 29.11 points or 0.37% to 7,944.04
• DAX 30 increased 22.62 points or 0.15% to 15,327.64

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00734 or -0.69% to 1.05916
• GBPUSD decreased 0.00836 or -0.69% to 1.19474
• USDCHF increased 0.00244 or 0.26% to 0.94184

Some economic news from Europe today:

Spain:

Spanish Unemployment Change decreased from 70.7K to 2.6K

Italy:

Italian CPI (MoM) (Feb) increased from 0.1% to 0.3%

Euro Zone:

Core CPI (YoY) increased from 5.3% to 5.6%

CPI (YoY) (Feb) decreased from 8.6% to 8.5%

CPI (MoM) increased from -0.2% to 0.8%

Unemployment Rate (Jan) remain the same at 6.7%

US/AMERICAS:

The Royal Bank of Canada (RBC) is warning that a “moderate” recession is underway. The bank originally planned for a soft landing but no longer sees that as a possibility. The RBC’s bad loans increased escalated to C$532 million, marking a five-fold increase. National Bank planned for C$86 million in provisions compared to their $C2 million release last year. “While central banks have successfully reigned in peak core inflation, strong services demand, labor shortages and reopening of China’s economy still present a challenge to getting firm control within stated target ranges,” RBC’s Chief Executive Officer Dave McKay said. The Bank of Canada stated last month that it would continue to tighten monetary policy until inflation was contained.

US Market Closings:

• Dow advanced 341.73 points or 1.05% to 33,003.57
• S&P 500 advanced 29.96 points or 0.73% to 11,462.98
• Nasdaq advanced 83.5 points or 0.73% to 11,462.98
• Russell 2000 advanced 4.23 points or 0.22% to 1,902.66

Canada Market Closings:

• TSX Composite advanced 77.43 points or 0.38% to 20,337.21
• TSX 60 advanced 5.48 points or 0.45% to 1,223.39

Brazil Market Closing:

• Bovespa declined 1,059.06 points or -1.01% to 103,325.61

ENERGY:

The oil markets had a mixed day today:

• Crude Oil increased 0.239 USD/BBL or 0.31% to 77.930
• Brent increased 0.158 USD/BBL or 0.19% to 84.468
• Natural gas decreased 0.0359 USD/MMBtu or -1.28% to 2.7751
• Gasoline increased 0.0242 USD/GAL or 0.90% to 2.6990
• Heating oil decreased 0.0149 USD/GAL or -0.52% to 2.8589

The above data was collected around 14:19 EST on Thursday

• Top commodity gainers: Palm Oil (2.68%), HRC Steel (3.94%), Soybeans (1.00%) and Bitumen (1.58%)
• Top commodity losers: Oat (-3.18%), Rhodium (-2.59%), Zinc (-2.57%) and Orange Juice (-4.96%)

The above data was collected around 14:24 EST Thursday.

BONDS:

Japan 0.506% (+0.2bp), US 2’s 4.90% (+0.013%), US 10’s 4.0695% (+7.35bps); US 30’s 4.02% (+0.066%), Bunds 2.756% (+4.2bp), France 3.240% (+3.8bp), Italy 4.619% (+4.2bp), Turkey 10.56% (+16bp), Greece 4.544% (+6.9bp), Portugal 3.654% (+6.3bp); Spain 3.794% (+3.9bp) and UK Gilts 3.904% (+6.2bp).

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