Market Talk – April 5, 2023

ASIA:

China’s manufacturing sector lost momentum in March due to weak export orders, slowing the country’s economic recovery from COVID-19 policies. The Caixin/S&P Global manufacturing purchasing managers’ index (PMI) fell to 50.0 in March from 51.6 in February, which was the first monthly activity expansion in seven months. However, China’s economy showed signs of recovery in the first two months of the year, and the GDP is expected to have grown around 4.0% year-on-year in Q1, led by a pickup in consumption and infrastructure investment.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 decreased 474.16 points or -1.68% to 27,813.26
• Shanghai closed
• Hang Seng closed
• ASX 200 increased 1.20 points or 0.02% to 7,237.20
• Kospi increased 14.70 points or 0.59% to 2,495.21
• SENSEX increased 552.96 points or 0.94% to 59,659.40
• Nifty50 increased 159.00 points or 0.91% to 17,557.05

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00356 or -0.53% to 0.67154
• NZDUSD increased 0.00054 or 0.09% to 0.63154
• USDJPY decreased 0.748 or -0.57% to 130.942
• USDCNY increased 0.00477 or 0.07% to 6.88287

Precious Metals:

• Gold decreased 2.75 USD/t oz. or -0.14% to 2,017.22
• Silver decreased 0.168 USD/t. oz or -0.67% to 24.848

Some economic news from last night:

Japan:

Services PMI (Mar) increased from 54.2 to 55.0

Australia:

AIG Manufacturing Index (Mar) increased from -6.4 to 5.6

New Zealand:

RBNZ Interest Rate Decision increased from 4.75% to 5.25%

Some economic news from today:

India:

Nikkei Services PMI (Mar) decreased from 59.4 to 57.8

M3 Money Supply decreased from 9.6% to 9.0%

EUROPE/EMEA:

The Bank of England’s chief economist hinted at a possible interest rate rise in May to tackle high inflation, but stressed the Monetary Policy Committee faces a tight decision given financial market fragility. Financial markets expect interest rates to peak at 4.5% but are split close to 50:50 on whether the rate rise will come in May. However, MPC member Silvana Tenreyro disagreed with Pill’s view that rapid price increases are now a persistent feature of the UK economy and has voted against every interest rate rise since September. Tenreyro is not a swing voter on the committee and is leaving in June.

The major Europe stock markets had a mixed day:

• CAC 40 decreased 28.66 points or -0.39% to 7,316.30
• FTSE 100 increased 28.42 points or 0.37% to 7,662.94
• DAX 30 decreased 83.30 points or -0.53% to 15,520.17

The major Europe currency markets had a negative day today:

• EURUSD decreased 0.00344 or -0.31% to 1.09176
• GBPUSD decreased 0.00369 or -0.30% to 1.24621
• USDCHF decreased 0.00089 or -0.10% to 0.90471

Some economic news from Europe today:

Spain:

Spanish Services PMI (Mar) increased from 56.7 to 59.4

Germany:

German Factory Orders (MoM) (Feb) increased from 0.5% to 4.8%

German Services PMI (Mar) increased from 50.9 to 53.7

Italy:

Italian Services PMI (Mar) increased from 51.6 to 55.7

UK:

Composite PMI (Mar) decreased from 53.1 to 52.2

Services PMI (Mar) decreased from 53.5 to 52.9

Euro Zone:

S&P Global Composite PMI (Mar) increased from 52.0 to 53.7

Services PMI (Mar) increased from 52.7 to 55.0

US/AMERICAS:

The ADP released today indicated signs of an easing US workforce. The private sector advanced by 145,000 positions in March, well beneath February’s posting of 261,000 and analysts’ expectations of 210,000. “Employers are pulling back from a year of strong hiring and pay growth, after a three-month plateau, is inching down,” ADP’s chief economist Nela Richardson stated. Pay rose at an annualized rate of 6.9% in March, beneath the 7.2% posted in February. Friday’s nonfarm payroll report, a closer measure analyzed by the Federal Reserve, is now expected to show payroll growth of 238,000 for the month, with an unemployment rate of 3.6%.

US Market Closings:

• Dow advanced 80.34 points or 0.24% to 33,482.72
• S&P 500 declined 10.22 points or -0.25% to 4,090.38
• Nasdaq declined 129.46 points or -1.07% to 11,996.86
• Russell 2000 declined 17.52 points or -0.99% to 1,752.13

Canada Market Closings:

• TSX Composite declined 116.21 points or -0.57% to 20,159.55
• TSX 60 declined 6.23 points or -0.51% to 1,213.93

Brazil Market Closing:

• Bovespa declined 891.6 points or -0.88% to 100,977.85

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 0.684 USD/BBL or -0.85% to 80.026
• Brent decreased 0.534 USD/BBL or -0.63% to 84.406
• Natural gas increased 0.0361 USD/MMBtu or 1.71% to 2.1421
• Gasoline increased 0.0387 USD/GAL or 1.41% to 2.7758
• Heating oil increased 0.0488 USD/GAL or 1.83% to 2.7155

The above data was collected around 11:21 EST on Wednesday

• Top commodity gainers: Milk (4.16%), Coffee (3.06%), Lean Hogs (2.50%) and Coal (2.78%)
• Top commodity losers: Platinum (-2.08%), Rapeseed (-3.24%), Palm Oil (-2.47%) and HRC Steel (-2.44%)

The above data was collected around 11:28 EST Wednesday.

BONDS:

Japan 0.473% (+7.1bp), US 2’s 3.70% (-0.130%), US 10’s 3.2775% (-5.95bps); US 30’s 3.57% (-0.027%), Bunds 2.18% (-8.6bp), France 2.694% (-7.8bp), Italy 4.02% (-9.4bp), Turkey 10.07% (-16bp), Greece 4.119% (-11.5bp), Portugal 3.055% (-8bp); Spain 3.213% (-7.5bp) and UK Gilts 3.432% (-0.2bp).

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