Market Talk – April 25, 2023

ASIA:

China’s economy grew by 4.5% YoY in the first quarter, supported by strong consumer spending and a large trade surplus. This may lead to an upgrade in growth forecast for 2023 from the current 5.7%. Consumption was the main contributor to the GDP growth, with retail sales growing at the fastest rate since July 2021, led by services and catering sales. The EIU expects growth to accelerate in Q2 but slowdown in H2 due to emerging challenges.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 26.55 points or 0.09% to 28,620.07
• Shanghai decreased 10.54 points or -0.32% to 3,264.87
• Hang Seng decreased 342.06 points or -1.71% to 19,617.88
• ASX 200 closed
• Kospi decreased 34.48 points or -1.37% to 2,489.02
• SENSEX increased 74.61 points or 0.12% to 60,130.71
• Nifty50 increased 25.85 points or 0.15% to 17,769.25

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00763 or -1.14% to 0.66197
• NZDUSD decreased 0.00266 or -0.43% to 0.61394
• USDJPY decreased 0.549 or -0.41% to 133.671
• USDCNY increased 0.04382 or 0.64% to 6.94422

Precious Metals:

• Gold increased 4.87 USD/t oz. or 0.25% to 1,993.75
• Silver decreased 0.343 USD/t. oz or -1.36% to 24.827

Some economic news from last night:

Japan:

Corporate Services Price Index (CSPI) (YoY) decreased from 1.8% to 1.6%

Some economic news from today:

Japan:

BoJ Core CPI (YoY) increased from 2.7% to 2.9%

Hong Kong:

Exports (MoM) (Mar) increased from -8.8% to -1.5%

Imports (MoM) (Mar) increased from -4.1% to -0.6%

Trade Balance increased from -45.4B to -40.6B

EUROPE/EMEA:

In April, German business morale rose slightly due to better company expectations, indicating that Europe’s largest economy may have avoided a winter recession. The Ifo business climate index increased to 93.6 from a revised reading of 93.2 in March, but it was lower than the expected 94.0. The Bundesbank revised its previous forecast for a small contraction in Q1, stating that the German economy is likely to have expanded due to a rebound in industrial production. Additionally, high employment levels are expected to support consumption, and unemployment is likely to decrease slightly in the coming month.

The major Europe stock markets had a mixed day today:

• CAC 40 decreased 42.25 points or -0.56% to 7,531.61
• FTSE 100 decreased 21.07 points or -0.27% to 7,891.13
• DAX 30 increased 8.18 points or 0.05% to 15,872.13

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00724 or -0.66% to 1.09686
• GBPUSD decreased 0.00788 or -0.63% to 1.24032
• USDCHF increased 0.00478 or 0.54% to 0.89208

Some economic news from Europe today:

UK:

CBI Industrial Trends Orders (Apr) remain the same at -20

US/AMERICAS:

First Republic Bank reported a significant decline in customer deposits for Q1, which fell by 40.8% to $104.5 billion. The bank’s stock dropped about 20% after the earnings report was released. The bank’s deposits fell by more than $100 billion in Q1, which also saw the collapse of several smaller banks. First Republic’s troubles are part of a broader banking crisis that has hit the US banking sector, with many smaller banks struggling to stay afloat. The bank’s deposit drop is a significant blow to First Republic, which has been one of the fastest-growing banks in the US in recent years.

US Market Closings:

• Dow declined 344.57 points or -1.02% to 33,530.83
• S&P 500 declined 65.41 points or -1.58% to 4,071.63
• Nasdaq declined 238.05 points or -1.98% to 11,799.16
• Russell 2000 declined 42.92 points or -2.4% to 1,745.95

Canada Market Closings:

• TSX Composite declined 236.87 points or -1.15% to 20,439.87
• TSX 60 declined 14.73 points or -1.18% to 1,232.31

Brazil Market Closing:

• Bovespa declined 726.49 points or -0.7% to 103,220.09

ENERGY:

Oil dropped 2% on Tuesday after two sessions of gains as deepening concerns of an economic slowdown and a stronger dollar outweighed hopes of higher Chinese demand and lower U.S. crude stocks. Brent crude fell by $1.96, or 2.4%, to settle at $80.77 a barrel. U.S. West Texas Intermediate crude dropped $1.69, or 2.2%, to settle at $77.07. On Monday, both contracts rose by more than 1%.

The oil markets had a mixed day today:

• Crude Oil decreased 1.981 USD/BBL or -2.52% to 76.779
• Brent decreased 1.914 USD/BBL or -2.31% to 80.816
• Natural gas increased 0.0032 USD/MMBtu or 0.14% to 2.2762
• Gasoline decreased 0.0641 USD/GAL or -2.44% to 2.5677
• Heating oil decreased 0.074 USD/GAL or -2.92% to 2.4570

The above data was collected around 13:40 EST on Tuesday

• Top commodity gainers: Rubber (2.90%), Orange Juice (2.46%), Bitumen (1.40%) and Sugar (3.20%)
• Top commodity losers: Methanol (-2.96%), Rapeseed (-3.65%), Palladium (-3.10%) and Lumber (-3.55%)

The above data was collected around 13:47 EST Tuesday.

BONDS:

Japan 0.477% (+0.7bp), US 2’s 3.95% (-0.194%), US 10’s 3.3921% (-12.29bps); US 30’s 3.64% (-0.090%), Bunds 2.346% (-14.4bp), France 2.928% (-14.2bp), Italy 4.275% (-9.9bp), Turkey 12.60% (+68bp), Greece 4.238% (-4.3bp), Portugal 3.232% (-10.3bp); Spain 3.400% (-13.4bp) and UK Gilts 3.689% (-9.4bp).

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