Market Talk – April 19, 2023

ASIA:

The Bank of Japan’s Assistant Governor, Tokiko Shimizu, expressed concern about Japan’s economy due to global economic slowdown and financial market stress. She warned that the rapid interest rate hikes by the U.S. and European central banks could eventually harm global growth. While some Japanese firms are raising prices and wages, Shimizu believes that broader wage hikes are necessary for Japan to achieve the BOJ’s 2% inflation target in a stable and sustainable manner. The IMF has also lowered its 2023 global growth outlook and warned of the potential for severe financial system turmoil.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 decreased 52.07 points or -0.18% to 28,606.76
• Shanghai decreased 23.20 points or -0.68% to 3,370.13
• Hang Seng decreased 282.75 points or -1.37% to 20,367.76
• ASX 200 increased 5.30 points or 0.07% to 7,365.50
• Kospi increased 3.99 points or 0.16% to 2,575.08
• SENSEX decreased 159.21 points or -0.27% to 59,567.80
• Nifty50 decreased 41.40 points or -0.23% to 17,618.75

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00059 or -0.09% to 0.67161
• NZDUSD decreased 0.00034 or -0.05% to 0.62036
• USDJPY increased 0.738 or 0.55% to 134.828
• USDCNY increased 0.016 or 0.23% to 6.89740

Precious Metals:

• Gold decreased 13.28 USD/t oz. or -0.66% to 1,991.65
• Silver decreased 0.012 USD/t. oz or -0.05% to 25.196

No economic news from last night:

Some economic news from today:

Japan:

Industrial Production (MoM) (Feb) increased from -5.3% to 4.6%

India:

M3 Money Supply increased from 9.0% to 10.0%

EUROPE/EMEA:

Goldman Sachs has revised its expectations for the European Central Bank (ECB), citing recent data, comments from board members, and fewer concerns over the banking sector. The investment bank previously lowered its expectations for the ECB’s policy rate to 3.5%, but now believes the terminal rate will be 3.75%. Goldman Sachs also believes that inflation data in the euro zone remains strong, which strengthens the argument for further rate hikes. Preliminary data shows that headline inflation in the euro zone dropped to 6.9% in March from 8.5% in February.

The major Europe stock markets had a mixed day today:

• CAC 40 increased 15.81 points or 0.21% to 7,549.44
• FTSE 100 decreased 10.67 points or -0.13% to 7,898.77
• DAX 30 increased 12.53 points or 0.08% to 15,895.20

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00164 or -0.15% to 1.09546
• GBPUSD increased 0.00151 or 0.12% to 1.24391
• USDCHF increased 0.00244 or 0.27% to 0.89844

Some economic news from Europe today:

UK:

CPI (MoM) (Mar) decreased from 1.1% to 0.8%

CPI (YoY) (Mar) decreased from 10.4% to 10.1%

PPI Input (MoM) (Mar) increased from 0.0% to 0.2%

Euro Zone:

Core CPI (YoY) (Mar) increased from 5.6% to 5.7%

CPI (YoY) (Mar) decreased from 8.5% to 6.9%

US/AMERICAS:

Mortgage demand declined in the US significantly last week after mortgage rates increased by 0.13%. The Mortgage Bankers Association’s reported that demand fell 10% for the week and 36% YoY when rates were at the 5.2% level. The average 30-year fixed-rate mortgage now sits at 6.43%. Refinances also decreased by 6% for the week and were 56% lower YoY.

US Market Closings:

• Dow declined 79.62 points or -0.23% to 33,897.01
• S&P 500 declined 0.35 of a point or -0.01% to 4,154.52
• Nasdaq advanced 3.81 points or 0.03% to 12,157.23
• Russell 2000 advanced 3.89 points or 0.22% to 1,799.44

Canada Market Closings:

• TSX Composite declined 3.85 points or -0.02% to 20,680.83
• TSX 60 advanced 0.32 of a point or 0.03% to 1,246.76

Brazil Market Closing:

• Bovespa declined 2,250.29 points or -2.12% to 103,912.94

ENERGY:

The oil markets had a negative day today:

• Crude Oil decreased 1.997 USD/BBL or -2.47% to 78.863
• Brent decreased 1.649 USD/BBL or -1.94% to 83.121
• Natural gas decreased 0.1177 USD/MMBtu or -4.97% to 2.2483
• Gasoline decreased 0.0885 USD/GAL or -3.22% to 2.6624
• Heating oil decreased 0.0393 USD/GAL or -1.51% to 2.5606

The above data was collected around 12:14 EST on Wednesday

• Top commodity gainers: Cocoa (0.79%), Oat (0.94%), Rhodium (2.60%) and Potatoes (1.42%)
• Top commodity losers: Natural Gas (-4.97%), Gasoline (-3.22%), Crude Oil (-2.47%) and Zinc (-2.75%)

The above data was collected around 12:19 EST Wednesday.

BONDS:

Japan 0.481% (+0.5bp), US 2’s 4.27% (+0.068%), US 10’s 3.6291% (+5.71bps); US 30’s 3.82% (+0.027%), Bunds 2.516% (+4.6bp), France 3.017% (+3.9bp), Italy 4.359% (+5.8bp), Turkey 11.87% (-9bp), Greece 4.335% (+0.7bp), Portugal 3.383% (+6.4bp); Spain 3.544% (+4.7bp) and UK Gilts 3.855% (+10.6bp).

The post Market Talk – April 19, 2023 first appeared on Armstrong Economics.