Market Talk – April 18, 2023

ASIA:

China’s consumer inflation fell to an 18-month low, rising by 0.7% year-on-year in March, slower than the 1.0% gain in February, indicating weak demand. The producer price index fell 2.5% year-on-year, the fastest decline since June 2020, falling for the sixth consecutive month. Food price inflation, a key driver of CPI, slowed to 2.4% year-on-year, and on a month-on-month basis, food prices fell 1.4%. The data supports the case for policymakers to take further steps to support the uneven economic recovery.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 144.05 points or 0.51% to 28,658.83
• Shanghai increased 7.72 points or 0.23% to 3,393.33
• Hang Seng decreased 131.94 points or -0.63% to 20,650.51
• ASX 200 decreased 21.30 points or -0.29% to 7,360.20
• Kospi decreased 4.82 points or -0.19% to 2,571.09
• SENSEX decreased 183.74 points or -0.31% to 59,727.01
• Nifty50 decreased 46.70 points or -0.26% to 17,660.15

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00285 or 0.43% to 0.67285
• NZDUSD increased 0.00239 or 0.39% to 0.62039
• USDJPY decreased 0.324 or -0.24% to 134.136
• USDCNY increased 0.00189 or 0.03% to 6.88289

Precious Metals:

• Gold increased 11.04 USD/t oz. or 0.55% to 2,005.81
• Silver increased 0.047 USD/t. oz or 0.19% to 25.152

Some economic news from last night:

China:

Chinese Unemployment Rate (Mar) decreased from 5.6% to 5.3%

Fixed Asset Investment (YoY) (Mar) decreased from 5.5% to 5.1%

GDP (QoQ) (Q1) increased from 0.6% to 2.2%

GDP (YoY) (Q1) increased from 2.9% to 4.5%

Chinese GDP YTD (YoY) (Q1) increased from 3.0% to 4.5%

Industrial Production (YoY) (Mar) increased from 2.4% to 3.9%

Chinese Industrial Production YTD (YoY) (Mar) increased from 2.4% to 3.0%

Some economic news from today:

New Zealand:

GlobalDairyTrade Price Index increased from -4.7% to 3.2%

EUROPE/EMEA:

Wages in the UK rose faster than expected in February, with annual pay growth remaining at 5.9% for the three months to January and February, and wage growth, excluding bonuses, remaining at 6.6%. Economists believe this may lead to the Bank of England increasing interest rates despite a rise in joblessness. The unemployment rate in the UK increased to 3.8%, its highest since the second quarter of 2022. However, average earnings in the three months to February were 4.1% lower than a year earlier due to high inflation.

The major Europe stock markets had a green day today:

• CAC 40 increased 35.45 points or 0.47% to 7,533.63
• FTSE 100 increased 29.93 points or 0.38% to 7,909.44
• DAX 30 increased 93.14 points or 0.59% to 15,882.67

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00417 or 0.38% to 1.09677
• GBPUSD increased 0.00522 or 0.42% to 1.24262
• USDCHF decreased 0.00139 or -0.15% to 0.89711

Some economic news from Europe today:

UK:

Average Earnings Index +Bonus (Feb) remain the same at 5.9%

Claimant Count Change (Mar) increased from -18.8K to 28.2K

Employment Change 3M/3M (MoM) (Feb) increased from 65K to 169K

Unemployment Rate (Feb) increased from 3.7% to 3.8%

Germany:

German ZEW Current Conditions (Apr) increased from -46.5 to -32.5

German ZEW Economic Sentiment (Apr) decreased from 13.0 to 4.1

Euro Zone:

ZEW Economic Sentiment (Apr) decreased from 10.0 to 6.4

US/AMERICAS:

Bank of Canada’s Tiff Macklem announced that he is prepared for a “soft landing” and not a recession. The bank previously raised interest rates eight consecutive times before holding the benchmark steady at 4.5% over the past two meetings. Macklem seems pleased with March’s 4.3% inflation reading, albeit over double his target. He said that the central bank is prepared to raise rates again if necessary to reach the 2% goal. As for the remainder of the year, Macklem said he expects “small positive” growth under 1% but above 0.

Boeing announced plans to increase production of its 737 Max aircrafts after experiencing delays over the past three years due to supply chain issues. CEO Dave Calhoun said that rate increases are already priced in and they have no plans to change their release schedule. The company will report Q1 earnings next week.

US Market Closings:

• Dow declined 10.55 points or -0.03% to 33,976.63
• S&P 500 advanced 3.55 points or 0.09% to 4,154.87
• Nasdaq declined 4.31 points or -0.04% to 12,153.41
• Russell 2000 declined 7.29 points or -0.4% to 1,795.55

Canada Market Closings:

• TSX Composite advanced 42.71 points or 0.21% to 20,684.68
• TSX 60 advanced 1.91 points or 0.15% to 1,246.44

Brazil Market Closing:

• Bovespa advanced 146.56 points or 0.14% to 106,163.23

ENERGY:

The oil markets had a mixed day today:

• Crude Oil increased 0.382 USD/BBL or 0.47% to 81.212
• Brent increased 0.235 USD/BBL or 0.28% to 84.995
• Natural gas increased 0.0632 USD/MMBtu or 2.78% to 2.3382
• Gasoline decreased 0.011 USD/GAL or -0.40% to 2.7630
• Heating oil increased 0.0003 USD/GAL or 0.01% to 2.6150

The above data was collected around 13:01 EST on Tuesday

• Top commodity gainers: Palm Oil (4.15%), Rapeseed (3.47%), Palladium (4.99%) and Potatoes (3.78%)
• Top commodity losers: Lumber (-4.37%), Lean Hogs (-1.90%), Polyethylene (-1.62%) and Polyvinyl (-1.61%)

The above data was collected around 13:07 EST Tuesday.

BONDS:

Japan 0.474% (-0.9bp), US 2’s 4.22% (+0.028%), US 10’s 3.5794% (-1.16bps); US 30’s 3.79% (-0.015%), Bunds 2.491% (+1.1bp), France 2.979% (+1.2bp), Italy 4.308% (+0.3bp), Turkey 11.96% (-5bp), Greece 4.452% (+10.3bp), Portugal 3.319% (-1.8bp); Spain 3.511% (+1.1bp) and UK Gilts 3.748% (+5.8bp).

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