Market Talk – March 24, 2023

ASIA:

Japan’s economy narrowly averted a recession in the final months of 2022, barely growing on frail consumption after shrinking in the third quarter, revised data showed, underscoring the challenge for policymakers trying to shore up a wobbly recovery. Record high inflation and slowing global growth amid sweeping monetary tightening across many countries have undermined the world’s third-biggest economy’s post-pandemic revival, despite relaxation of COVID curbs, energy subsidies and ultra-easy monetary policy. Japan’s gross domestic product (GDP) expanded by an annualized 0.1% in October-December, against a preliminary estimate of a 0.6% expansion and much lower than economists’ median forecast for a 0.8% rise in a Reuters poll. That followed a revised 1.1% contraction in July-September. Private consumption, which makes up more than half of the country’s GDP, grew 0.3%, the data showed, downgraded from an initial estimate of a 0.5% increase.

The major Asian stock markets had a negative day today:

• NIKKEI 225 decreased 34.36 points or -0.13 % to 27,385.25
• Shanghai decreased 21.00 points or -0.64% to 3,265.65
• Hang Seng decreased 133.96 points or -0.67% to 19,915.68
• ASX 200 decreased 13.40 points or -0.19% to 6,955.20
• Kospi decreased 9.52 points or -0.39% to 2,414.96
• SENSEX decreased 398.18 points or -0.69% to 57,527.10
• Nifty50 decreased 131.85 points or -0.77% to 16,945.05

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00483 or -0.72% to 0.66347
• NZDUSD decreased 0.0054 or -0.86% to 0.61940
• USDJPY decreased 0.386 or -0.30% to 130.424
• USDCNY increased 0.04409 or 0.65% to 6.87289

Precious Metals:

• Gold increased 0.14 USD/t oz. or 0.01% to 1,993.64
• Silver increased 0.174 USD/t. oz or 0.75% to 23.294

Some economic news from last night:

Japan:

National Core CPI (YoY) (Feb) decreased from 4.2% to 3.1%

Services PMI increased from 54.0 to 54.2

Some economic news from today:

India:

Bank Loan Growth increased from 15.5% to 15.7%

Deposit Growth increased from 10.1% to 10.3%

FX Reserves, USD increased from 560.00B to 572.80B

EUROPE/EMEA:

European Union leaders and the ECB sought to calm market jitters by presenting a united front on the banking sector on Friday, saying EU lenders are well capitalized and liquid thanks to lessons drawn after the 2008 Lehman Brothers collapse. European banking stocks fell sharply again on Friday, with Deutsche Bank and UBS knocked by worries that actions by regulators and central banks have yet to contain the worst problems to face the sector since the 2008 financial crisis. European Central Bank head Christine Lagarde told EU leaders that European banks were safe but called on governments to push on with a stalled EU deposit insurance scheme, officials said. Defending the ECB’s push to raise interest rates to stamp out high inflation at a time of turbulence in the financial sector, Lagarde said there was no tradeoff between fighting inflation and keeping the banking sector stable.

The major Europe stock markets had a negative day:

• CAC 40 decreased 124.15 points or -1.74% to 7,015.10
• FTSE 100 decreased 94.15 points or -1.26% to 7,405.45
• DAX 30 decreased 253.16 points or -1.66% to 14,957.23

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00836 or -0.77% to 1.07464
• GBPUSD decreased 0.00678 or -0.55% to 1.22172
• USDCHF increased 0.0022 or 0.24% to 0.91860

Some economic news from Europe today:

UK:

Composite PMI decreased from 53.1 to 52.2

Manufacturing PMI decreased from 49.3 to 48.0

Services PMI decreased from 53.5 to 52.8

Core Retail Sales (MoM) (Feb) increased from 0.9% to 1.5%

Core Retail Sales (YoY) (Feb) increased from -5.4% to -3.3%

Retail Sales (MoM) (Feb) increased from 0.9% to 1.2%

Retail Sales (YoY) (Feb) increased from -5.2% to -3.5%

Spain:

Spanish GDP (QoQ) (Q4) remain the same at 0.2%

France:

French Manufacturing PMI (Mar) increased from 47.4 to 47.7

French Services PMI (Mar) increased from 53.1 to 55.5

Germany:

German Manufacturing PMI (Mar) decreased from 46.3 to 44.4

German Services PMI (Mar) increased from 50.9 to 53.9

Euro Zone:

Manufacturing PMI (Mar) decreased from 48.5 to 47.1

S&P Global Composite PMI (Mar) increased from 52.0 to 54.1

Services PMI (Mar) increased from 52.7 to 55.6

US/AMERICAS:

Wall Street closed in the green this Friday after banking fears were quelled. Yellen’s promise to the public yesterday to cover deposits brought some hope to investors, as did Powell’s statement earlier in the week that hinted the Fed may be pumping the breaks rate hikes. Yet, the issue with banks is not limited to the US and seems to be a contagion sweeping through the global economy. Deutsche Bank has lost over a fifth of its value in March alone. The increased cost of insuring banks against possible defaults led to the bank’s stock slipping by over 14% during midday trading. US-listed shares on the exchange experienced a dramatic sell-off, as the banking sector remain volatile on a macro level.

US Market Closings:

• Dow advanced 132.28 points or 0.41% to 32,237.53
• S&P 500 advanced 22.27 points or 0.56% to 3,970.99
• Nasdaq advanced 36.56 points or 0.31% to 11,823.96
• Russell 2000 advanced 14.63 points or 0.85% to 1,734.92

Canada Market Closings:

• TSX Composite advanced 41.57 points or 0.21% to 19,501.49
• TSX 60 advanced 3.55 points or 0.3% to 1,171.66

Brazil Market Closing:

• Bovespa advanced 902.93 points or 0.92% to 98,829.27

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 1.44 USD/BBL or -2.06% to 68.520
• Brent decreased 1.497 USD/BBL or -1.97% to 74.413
• Natural gas increased 0.0417 USD/MMBtu or 1.94% to 2.1957
• Gasoline decreased 0.0232 USD/GAL or -0.89% to 2.5827
• Heating oil decreased 0.0014 USD/GAL or -0.05% to 2.6833

The above data was collected around 11:36 EST on Friday

• Top commodity gainers: Wheat (3.15%), Orange Juice (3.57%), Rapeseed (2.87%) and Lean Hogs (2.28%)
• Top commodity losers: Cotton (-1.84%), Methanol (-1.79%), Crude Oil (-2.06%) and Brent (-1.97%)

The above data was collected around 11:43 EST Friday.

BONDS:

Japan 0.38% (+8bp), US 2’s 3.75% (-0.056%), US 10’s 3.3687% (-3.53bps); US 30’s 3.64% (-0.038%), Bunds 2.125% (-6.1bp), France 2.652% (-6.6bp), Italy 4.006% (-5.1bp), Turkey 11.91% (+0bp), Greece 4.074% (-13.9bp), Portugal 3.025% (-4.7bp); Spain 3.178% (-6.2bp) and UK Gilts 3.279% (-8.2bp).

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