Market Talk – March 7, 2023

ASIA:

India’s domestic economy is its primary engine of growth and the slowdown in economic activity late last year will only be temporary, said Moody’s Analytics on Tuesday. Citing that the private consumption lagging overall GDP for the first time since the Delta wave of Covid-19 struck the economy in the second quarter of 2021, the Moody’s Analytics in its report on emerging market outlook said growth slowed substantially on a year-ago basis. Notably, Indian economy grew 13.2 per cent in April-June quarter and 6.3 per cent in July-September quarter. While India’s gross domestic product (GDP) growth slowed to a three quarter low of 4.4 per cent in October-December, 2022, government data said.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 71.38 points or 0.25% to 28,309.16
• Shanghai decreased 36.93 points or -1.11% to 3,285.10
• Hang Seng decreased 68.71 points or -0.33% to 20,534.48
• ASX 200 increased 36.10 points or 0.49% to 7,364.70
• Kospi increased 0.73 points or 0.03% to 2,463.35
• SENSEX closed
• Nifty50 closed

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.01366 or -2.03% to 0.65904
• NZDUSD decreased 0.00819 or -1.32% to 0.61121
• USDJPY increased 1.25 or 0.92% to 137.160
• USDCNY increased 0.04449 or 0.64% to 6.99429

Precious Metals:

• Gold decreased 32.13 USD/t oz. or -1.74% to 1,814.72
• Silver decreased 0.967 USD/t. oz or -4.59% to 20.075

Some economic news from last night:

China:

Trade Balance (USD) (Feb) increased from 78.01B to 116.88B

Exports (YoY) (Feb) increased from -9.9% to -6.8%

Imports (YoY) (Feb) decreased from -7.5% to -10.2%

Australia:

Retail Sales (MoM) increased from -4.0% to 1.9%

RBA Interest Rate Decision (Mar) increased from 3.35% to 3.60%

Trade Balance (Jan) decreased from 12.237B to 11.688B

Some economic news from today:

China:

FX Reserves (USD) (Feb) decreased from 3.184T to 3.133T

Hong Kong:

Foreign Reserves (USD) (Feb) decreased from 436.50B to 429.10B

EUROPE/EMEA:

The European Central Bank should raise interest rates by 50 basis points at each of its next four meetings as inflation is proving to be stubborn, Austrian central bank chief Robert Holzmann told German business daily Handelsblatt. The ECB has raised rates by 3 percentage points since July and flagged a 50 basis point increase for March. It has left the door open to subsequent moves, which it said would be decided on “meeting by meeting” and be “data dependent.”

The major Europe stock markets had a negative day:

• CAC 40 decreased 33.94 points or -0.46% to 7,339.27
• FTSE 100 decreased 10.31 points or -0.13% to 7,919.48
• DAX 30 decreased 94.05 points or -0.60% to 15,559.53

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.01285 or -1.20% to 1.05495
• GBPUSD decreased 0.01945 or -1.62% to 1.18265
• USDCHF increased 0.01117 or 1.20% to 0.94187

Some economic news from Europe today:

Swiss:

Unemployment Rate n.s.a. (Feb) decreased from 2.2% to 2.1%

Unemployment Rate s.a. (Feb) remain the same at 1.9%

UK:

Halifax House Price Index (YoY) (Feb) remain the same at 2.1%

Halifax House Price Index (MoM) (Feb) increased from 0.2% to 1.1%

Mortgage Rate (GBP) (Feb) increased from 6.66% to 7.02%

Germany:

German Factory Orders (MoM) (Jan) decreased from 3.4% to 1.0%

US/AMERICAS:

Discussions of a soft landing for the US economy no longer seem feasible. Fed Chairman Jerome Powell plainly said that interest rates will rise higher than the central bank initially expected and the road ahead will be “bumpy.” “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes,” Powell added. The last stated terminal rate provided in December was 5.1%. Powell did not indicate how high rates could go, but maintained that price stability is the top priority. Numerous analysts are now predicting that March’s FOMC meeting may result in a hike above 50 bps, but Powell said that all decisions will be made “meeting by meeting” as new data becomes available.

US Market Closings:

• Dow declined 574.98 points or -1.72% to 32,856.46
• S&P 500 declined 62.05 points or -1.53% to 3,986.37
• Nasdaq declined 145.4 points or 1.25% to 11,530.33
• Russell 2000 declined 21.03 points or -1.11% to 1,878.72

Canada Market Closings:

• TSX Composite declined 239.26 points or -1.17% to 20,275.54
• TSX 60 declined 15.29 points or -1.24% to 1,219.44

Brazil Market Closing:

• Bovespa declined 472.39 points or -0.45% to 104,227.93

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 3.193 USD/BBL or -3.97% to 77.267
• Brent decreased 2.998 USD/BBL or -3.48% to 83.182
• Natural gas increased 0.0916 USD/MMBtu or 3.56% to 2.6636
• Gasoline decreased 0.1083 USD/GAL or -3.87% to 2.6882
• Heating oil decreased 0.0864 USD/GAL or -2.99% to 2.8002

The above data was collected around 16:15 EST on Tuesday

• Top commodity gainers: Natural Gas (3.56%), Orange Juice (3.88%), Oat (5.14%) and Lean Hogs (1.29%)
• Top commodity losers: Platinum (-4.52%), Crude Oil (-3.97%), Gasoline (-3.87%) and Silver (-4.59%)

The above data was collected around 16:19 EST Tuesday.

BONDS:

Japan 0.501% (-0.3bp), US 2’s 5.01% (+0.117%), US 10’s 3.9656% (-1.74bps); US 30’s 3.88% (-0.034%), Bunds 2.700% (-2.7bp), France 3.196% (-4.3bp), Italy 4.521% (-5.2bp), Turkey 11.53% (-9bp), Greece 4.508% (-1.1bp), Portugal 3.585% (-3.1bp); Spain 3.74% (-2.8bp) and UK Gilts 3.849% (-1.7bp).

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