Market Talk – April 12, 2023

ASIA:

Australia’s Foreign Minister, Penny Wong, has urged exporters to diversify their markets and become less dependent on China as Australia cannot separate economic and strategic relationships with China. This comes after both countries reached a consensus to end their dispute over barley, with Australia suspending a case at the World Trade Organization and China hastening a review of tariffs on Australian exports. Trade worth $190 billion a year continues with China as Australia’s major two-way trading partner, but the country wants to reduce its dependence on China and is encouraging exporters to explore other markets.

The International Monetary Fund (IMF) has lowered India’s economic growth projection for the current financial year from 6.1% to 5.9%. The Indian economy is expected to grow by 6.8% in the financial year ended March 2023, according to the IMF’s World Economic Outlook. Other multilateral agencies, such as the World Bank and Asian Development Bank (ADB), have also lowered India’s economic growth projections for the current financial year due to increased borrowing costs and risks from global factors. The IMF’s projection is the lowest among the forecasts by multilateral agencies, with the World Bank forecasting 6.3% and the ADB predicting 6.4%.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 159.33 points or 0.57% to 28,082.70
• Shanghai increased 13.61 points or 0.41% to 3,327.18
• Hang Seng decreased 175.38 points or -0.86% to 20,309.86
• ASX 200 increased 34.00 points or 0.47% to 7,343.90
• Kospi increased 2.78 points or 0.11% to 2,550.64
• SENSEX increased 95.72 points or 0.16% to 60,253.44
• Nifty50 increased 90.10 points or 0.51% to 17,812.40

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00390 or 0.58% to 0.66889
• NZDUSD increased 0.00220 or 0.36% to 0.62110
• USDJPY decreased 0.413 or -0.31% to 133.237
• USDCNY decreased 0.01310 or -0.19% to 6.88052

Precious Metals:

• Gold increased 3.64 USD/t oz. or 0.18% to 2,006.78
• Silver increased 0.145 USD/t. oz or 0.58% to 25.220

Some economic news from last night:

New Zealand:

Electronic Card Retail Sales (MoM) increased from -0.1% to 0.7%

Some economic news from today:

India:

CPI (YoY) (Mar) decreased from 6.44% to 5.66%

EUROPE/EMEA:

Switzerland’s parliament has rejected the government’s 109 billion Swiss francs ($120.82 billion) aid for Credit Suisse’s merger with UBS. The lower chamber of parliament rejected the proposals, which had already been approved by the upper house, in a late-night session on Tuesday. This forced the upper house to find a solution, but parliament’s larger chamber pushed back again on Wednesday, leaving the fallen bank’s rescue without a largely symbolic parliamentary blessing. The government’s commitment, made using emergency law, cannot be overturned, but the vote is a symbolic rebuke for the authorities, who have angered many politicians by bypassing the nation’s legislative.

The major Europe stock markets had a green day today:

• CAC 40 increased 6.66 points or 0.09% to 7,396.94
• FTSE 100 increased 39.12 points or 0.50% to 7,824.84
• DAX 30 increased 48.43 points or 0.31% to 15,703.60

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00795 or 0.73% to 1.09895
• GBPUSD increased 0.00523 or 0.42% to 1.24763
• USDCHF decreased 0.00685 or -0.76% to 0.89635

US/AMERICAS:

The Federal Reserve minutes report revealed that the US is falling into a recession. The FOMC projects a growth of only 0.4% for the yar, while the Atlanta Federal Reserve foresees Q1 declining 2.2%. The target range is now at the highest level since 2007, and future hikes are possible. The recent banking failures has caused the committee to foresee a “mild recession” later in the year, with a recover over the following two years.

Inflation is showing small signs of easing in the US, as indicated by today’s CPI report. March’s reading came in at 0.1% on a monthly, beneath expectations of 0.2%, while the yearly CPI reached 5% (5.1% expectation). Core CPI, including energy and food, increased 0.4% and 5.6% on a monthly and annual basis. A 3.5% decline in energy helped the lower the reading, but food prices remained relatively unchanged. Inflation is still far from the central bank’s 2% target and this report is not indicative of a trend.

US Market Closings:

• Dow declined 38.29 points or -0.11% to 33,646.5
• S&P 500 declined 16.99 points or -0.41% to 4,091.95
• Nasdaq advanced 102.54 points or -0.84% to 11,929.34
• Russell 2000 declined 12.9 points or -0.72% to 1,773.7

Canada Market Closings:

• TSX Composite advanced 32.47 points or 0.16% to 20,454.32
• TSX 60 advanced 2.43 points or 0.2% to 1,231.2

Brazil Market Closing:

• Bovespa advanced 675.95 points or 0.64% to 106,889.71

ENERGY:

The oil markets had a mixed day today:

• Crude Oil increased 1.53 USD/BBL or 1.88% to 83.060
• Brent increased 1.728 USD/BBL or 2.02% to 87.338
• Natural gas decreased 0.1009 USD/MMBtu or -4.62% to 2.0851
• Gasoline increased 0.0243 USD/GAL or 0.85% to 2.8895
• Heating oil increased 0.0479 USD/GAL or 1.80% to 2.7161

The above data was collected around 12:11 EST on Wednesday

• Top commodity gainers: Platinum (2.22%), Rice (3.45%), Potatoes (2.24%) and HRC Steel (3.65%)
• Top commodity losers: Natural Gas (-4.62%), Rapeseed (-2.61%), Palm Oil (-2.91%) and Orange Juice (-2.98%)

The above data was collected around 12:21 EST Wednesday.

BONDS:

Japan 0.466% (+1.4bp), US 2’s 4.00% (-0.054%), US 10’s 3.4261% (-0.79bps); US 30’s 3.65% (+0.029%), Bunds 2.371% (+6.7bp), France 2.882% (+5.7bp), Italy 4.211% (+4.9bp), Turkey 12.80% (+74bp), Greece 4.251% (+4.4bp), Portugal 3.249% (+6.8bp); Spain 3.417% (+5.9bp) and UK Gilts 3.567% (+2.8bp).

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