Market Talk – April 13, 2023

ASIA:

Japan’s wholesale prices rose 7.2% in March from a year earlier, with the pace of increase slowing for the third straight month, data showed on Wednesday, offering some relief to households and firms hit by a steady rise in raw material costs. The gain in the corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, was roughly in line with a median market forecast for a 7.1% gain. It followed a revised 8.3% increase in February. Rising global commodity and fuel costs have pushed Japan’s wholesale and consumer inflation to multi-decade highs, heightening market expectations that the Bank of Japan (BOJ) may soon phase out its massive stimulus program.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 74.27 points or 0.26% to 28,156.97
• Shanghai decreased 8.82 points or -0.27% to 3,318.36
• Hang Seng increased 34.62 points or 0.17% to 20,344.48
• ASX 200 decreased 19.80 points or -0.27% to 7,324.10
• Kospi increased 11.02 points or 0.43% to 2,561.66
• SENSEX increased 38.23 points or 0.06% to 60,431.00
• Nifty50 increased 15.60 points or 0.09% to 17,828.00

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.009 or 1.35% to 0.67780
• NZDUSD increased 0.0084 or 1.35% to 0.63050
• USDJPY decreased 0.797 or -0.60% to 132.323
• USDCNY decreased 0.01442 or -0.21% to 6.86728

Precious Metals:

• Gold increased 26.24 USD/t oz. or 1.30% to 2,040.91
• Silver increased 0.304 USD/t. oz or 1.19% to 25.781

Some economic news from last night:

Australia:

Employment Change (Mar) decreased from 63.6K to 53.0K

Full Employment Change (Mar) decreased from 79.2K to 72.2K

Unemployment Rate (Mar) remain the same at 3.5%

China:

Exports (YoY) (Mar) increased from -6.8% to 14.8%

Imports (YoY) (Mar) increased from -10.2% to -1.4%

Trade Balance (USD) (Mar) decreased from 116.88B to 88.19B

Some economic news from today:

India:

Exports (USD) (Mar) increased from 33.88B to 38.38B

Imports (USD) (Mar) increased from 51.31B to 58.11B

Trade Balance (Mar) decreased from -17.43B to -19.73B

EUROPE/EMEA:

The German economy, Europe’s largest, is expected to dodge a recession and grow by 0.3 percent this year thanks to a drop in energy prices, leading economic institutes said Wednesday. Inflation, however, will only ease slightly to six percent, from 6.9 percent in 2022. In their previous forecast last autumn, the researchers were still expecting Germany’s economy to shrink by 0.4 percent, after Russia’s invasion of Ukraine sent energy and food costs surging. Easing supply chain bottlenecks and China’s relaxation of Covid-related restrictions have also buoyed the country’s export-oriented economy. Although Germany’s inflation rate eased to 7.4 percent in March after hitting a peak of 8.8 percent in late 2022, consumer prices are set to remain stubbornly high this year. Government relief measures and expected high wage increases “are strengthening domestic demand and keeping domestic inflation high,” the think-tanks said in their statement.

The major Europe stock markets had a green day today:

• CAC 40 increased 83.89 points or 1.13% to 7,480.83
• FTSE 100 increased 18.54 points or 0.24% to 7,843.38
• DAX 30 increased 25.86 points or 0.16% to 15,729.46

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00636 or 0.58% to 1.10526
• GBPUSD increased 0.00443 or 0.35% to 1.25253
• USDCHF decreased 0.00846 or -0.94% to 0.88744

Some economic news from Europe today:

UK:

GDP (MoM) (Feb) decreased from 0.4% to 0.0%

Industrial Production (MoM) (Feb) increased from -0.5% to -0.2%

Manufacturing Production (MoM) (Feb) increased from -0.1% to 0.0%

Monthly GDP 3M/3M Change (Feb) increased from 0.0% to 0.1%

Trade Balance (Feb) decreased from -16.09B to -17.53B

Trade Balance Non-EU (Feb) increased from -6.57B to -6.52B

NIESR Monthly GDP Tracker remain the same at 0.1%

Germany:

German CPI (YoY) (Mar) decreased from 8.7% to 7.4%

German CPI (MoM) (Mar) remain the same at 0.8%

Euro Zone:

Industrial Production (MoM) (Feb) increased from 1.0% to 1.5%

US/AMERICAS:

The Bank of Canada voted to maintain rates for the second consecutive time. Bank of Canada Governor Tiff Macklem said the central bank is waiting to see how effective the past eight hikes have been in combating inflation before making any changes. “Our baseline forecast is for positive but weak growth and declining inflation,” Macklem said while also noting Canada’s hot labor market. The bank also raised its growth forecast for 2023 to 1.4% from the original prediction of 1%. “The Bank expects CPI inflation to fall quickly to around 3% in the middle of this year and then decline more gradually to the 2% target by the end of 2024,” the central bank also noted in its recent report.

US Market Closings:

• Dow advanced 383.19 points or 1.14% to 34,029.69
• S&P 500 advanced 54.27 points or 1.33% to 4,146.22
• Nasdaq advanced 236.93 points or 1.99% to 12,166.27
• Russell 2000 advanced 22.98 points or 1.3% to 1,796.68

Canada Market Closings:

• TSX Composite advanced 110.17 points or 0.54% to 20,564.49
• TSX 60 advanced 6.35 points or 0.52% to 1,237.55

Brazil Market Closing:

• Bovespa declined 431.86 points or -0.4% to 106,457.85

ENERGY:

The oil markets had a negative day today:

• Crude Oil decreased 0.604 USD/BBL or -0.72% to 82.656
• Brent decreased 0.586 USD/BBL or -0.67% to 86.744
• Natural gas decreased 0.0649 USD/MMBtu or -3.10% to 2.0281
• Gasoline decreased 0.0395 USD/GAL or -1.38% to 2.8332
• Heating oil decreased 0.033 USD/GAL or -1.22% to 2.6701

The above data was collected around 12:01 EST on Thursday

• Top commodity gainers: Platinum (3.01%), Lumber (5.83%), Coffee (2.92%) and Zinc (2.33%)
• Top commodity losers: Natural Gas (-3.10%), Rhodium (-6.25%), Palm Oil (-1.64%) and Wheat (-2.04%)

The above data was collected around 12:17 EST Thursday.

BONDS:

Japan 0.465% (-0.1bp), US 2’s 3.94% (-0.033%), US 10’s 3.4224% (+0.14bps); US 30’s 3.66% (+0.006%), Bunds 2.369% (+0.9bp), France 2.88% (-0.5bp), Italy 4.214% (-0.2bp), Turkey 12.70% (-10bp), Greece 4.318% (+6.6bp), Portugal 3.243% (+1.3bp); Spain 3.416% (+0.4bp) and UK Gilts 3.567% (+0.1bp).

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