Market Talk – April 17, 2023

ASIA:

China’s top central banker told attendees at an international finance meeting in Washington on Friday that rapid interest rate hikes and recent bank failures in Western countries were the major sources of global instability. Yi Gang, the governor of the People’s Bank of China, also attributed worldwide inflation in energy prices to “geopolitical conflicts” but did not link it to Russia’s invasion of Ukraine. Elaborating on the many risks the world economy faces, Yi put the uncertainty around high inflation at the top of the list.

India’s Finance Minister, Nirmala Sitharaman, has stated that the biggest threats to India’s economic growth come from external forces such as higher oil prices and the impacts of Russia’s war in Ukraine. Possible recessions in the US or other developed countries could also hurt India’s exports, particularly in the manufacturing sector. India’s economy is currently showing signs of fatigue due to high interest rates, resulting in slower growth. In the October-December period, growth eased to 4.4%, from 6.3% in the previous quarter, due to declining consumption and investments. Sitharaman was in the US to attend the International Monetary Fund’s Spring Meetings and to co-chair the Group of 20 finance chiefs’ gathering.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 21.31 points or 0.07% to 28,514.78
• Shanghai increased 47.46 points or 1.42% to 3,385.61
• Hang Seng increased 343.64 points or 1.68% to 20,782.45
• ASX 200 increased 19.90 points or 0.27% to 7,381.50
• Kospi increased 4.42 points or 0.17% to 2,575.91
• SENSEX decreased 630.15 points or -1.04% to 59,800.85
• Nifty50 decreased 121.15 points or -0.68% to 17,706.85

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00134 or -0.20% to 0.66946
• NZDUSD decreased 0.00251 or -0.40% to 0.61759
• USDJPY increased 0.692 or 0.52% to 134.462
• USDCNY increased 0.01434 or 0.21% to 6.88384

Precious Metals:

• Gold decreased 11.89 USD/t oz. or -0.59% to 1,991.15
• Silver decreased 0.346 USD/t. oz or -1.37% to 24.994

No economic news from last night:

Some economic news from today:

India:

WPI Inflation (YoY) (Mar) decreased from 4.80% to 1.34%

EUROPE/EMEA:

The President of the European Central Bank, Christine Lagarde, has warned that political pressure on countries to align with the US or China could hinder global economic growth and should be avoided. In an interview with CBS’s “Face the Nation,” Lagarde expressed concern over the growing pressure on countries to choose economic alignments and the perception of the US losing global influence. The tension between the US and China over Taiwan has brought China’s relationships with Europe and other countries to the forefront.

Saudi Arabia’s Crown Prince Mohammed bin Salman announced the completion of a 4% transfer of state-owned shares in Saudi Aramco to a company owned by the Public Investment Fund, valued at nearly $78 billion. The move is part of the kingdom’s efforts to diversify its economy by leveraging a year of high oil prices. The shares were transferred to the Saudi Arabian Investment Company, wholly owned by the PIF, while the state will remain Saudi Aramco’s largest shareholder with a total ownership of 90.18% of the company’s shares.

The major Europe stock markets had a mixed day today:

• CAC 40 decreased 21.43 points or -0.28% to 7,498.18
• FTSE 100 increased 7.60 points or 0.10% to 7,879.51
• DAX 30 decreased 17.97 points or -0.11% to 15,789.53

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00825 or -0.75% to 1.09175
• GBPUSD decreased 0.00509 or -0.41% to 1.23621
• USDCHF increased 0.00523 or 0.59% to 0.89903

Some economic news from Europe today:

Italy:

Italian CPI (MoM) (Mar) decreased from 0.2% to -0.4%

US/AMERICAS:

The National Association of Home Builders/Wells Fargo Housing Market Index showed a slight uptick in homebuilder sentiment this April after the index rose by a single point to 45. While still in a contraction, this marks the fourth consecutive months of gains and the highest reading since September. In contrast, the index was at 77 only one year ago. Builders continue to struggle with supply chain issues and are at the mercy of everchanging mortgage rates. One-third of housing inventory is composed of new construction, far beyond the norm of 10%. The association expects sales to increase slightly over the next six months. A third of builders said they have begun cutting prices with the average price reduction coming in at 6%.

US Market Closings:

• Dow advanced 100.71 points or 0.3% to 33,987.18
• S&P 500 advanced 13.68 points or 0.33% to 4,151.32
• Nasdaq advanced 34.26 points or 0.28% to 12,157.72
• Russell 2000 advanced 21.68 points or 1.22% to 1,802.84

Canada Market Closings:

• TSX Composite advanced 62.06 points or 0.3% to 20,641.97
• TSX 60 advanced 4.94 points or 0.4% to 1,244.53

Brazil Market Closing:

• Bovespa declined 263.7 points or -0.25% to 106,015.67

ENERGY:

The oil markets had a mixed day today:

• Crude Oil decreased 1.703 USD/BBL or -2.06% to 80.817
• Brent decreased 1.908 USD/BBL or -2.21% to 84.402
• Natural gas increased 0.1594 USD/MMBtu or 7.54% to 2.2734
• Gasoline decreased 0.086 USD/GAL or -3.03% to 2.7499
• Heating oil decreased 0.059 USD/GAL or -2.24% to 2.5802

The above data was collected around 11:45 EST on Monday

• Top commodity gainers: Natural Gas (7.54%), Lumber (4.27%), Palladium (3.37%) and Potatoes (4.24%)
• Top commodity losers: Gasoline (-3.03%), Heating Oil (-2.24%), Brent (-2.21%) and Crude Oil (-2.06%)

The above data was collected around 11:58 EST Monday.

BONDS:

Japan 0.483% (+1.2bp), US 2’s 4.20% (+0.098%), US 10’s 3.5965% (+7.45bps); US 30’s 3.81% (+0.072%), Bunds 2.477% (+4.6bp), France 2.97% (+2.3bp), Italy 4.31% (+1.9bp), Turkey 12.01% (+0bp), Greece 4.342% (+4.7bp), Portugal 3.339% (+3.9bp); Spain 3.504% (+2.9bp) and UK Gilts 3.691% (+2.9bp).

The post Market Talk – April 17, 2023 first appeared on Armstrong Economics.