Market Talk – May 1, 2023

ASIA:

China Gold Association said that China’s gold production recovered to pre-pandemic level as demand for gold and jewelry jumped during the first quarter of this year. As COVID-19 impacts waned, the gold output of domestic mines operated by big gold enterprises reached around 32.72 tonnes in Q1, accounting for nearly half of the country’s gold output, the data showed. Central banks globally maintained net purchases of gold in the first quarter. The People’s Bank of China increased its gold holdings for five consecutive months from November 2022 to March 2023, including a total increase of 57.85 tonnes in the first quarter.

India’s Commerce Secretary, Sunil Barthwal, stated that the country’s exports to the United Arab Emirates (UAE) are projected to increase from the current USD 31.3 billion to USD 50 billion by 2026-27, due to the free trade agreement between the two countries that came into effect on May 1, 2022. The India-UAE Comprehensive Economic Partnership Agreement (CEPA) has resulted in significant growth in trade between the two nations, with India’s exports to the UAE rising by 11.8% to USD 31.3 billion in 2022-23, while imports increased by 18.8% to USD 53.2 billion in the previous fiscal year.

The major Asian stock markets had a green day today:

•  NIKKEI 225 increased 266.74 points or 0.92% to 29,123.18
•  Shanghai increased 37.39 points or 1.14% to 3,323.27
•  Hang Seng increased 54.29 points or 0.27% to 19,894.57
•  ASX 200 increased 25.40 points or 0.35% to 7,334.60
•  Kospi increased 5.72 points or 0.23% to 2,501.53
•  SENSEX increased 463.06 points or 0.76% to 61,112.44
•  Nifty50 increased 149.95 points or 0.84% to 18,065.00

The major Asian currency markets had a mixed day today:

•  AUDUSD increased 0.00250 or 0.38% to 0.66322
•  NZDUSD decreased 0.00180 or -0.28% to 0.61654
•  USDJPY increased 1.113 or 0.82% to 137.393
•  USDCNY increased 0.03230 or 0.47% to 6.95850

Precious Metals:

Gold decreased 8.58 USD/t oz. or -0.43% to 1,981.07

Silver decreased 0.132 USD/t. oz or -0.53%% to 24.904

Some economic news from last night:

Japan:

Manufacturing PMI (Apr) increased from 49.2 to 49.5

Australia:

Manufacturing PMI decreased from 49.1 to 48.0

Some economic news from today:

Japan:

Household Confidence (Apr) increased from 33.9 to 35.4

India:

Nikkei S&P Global Manufacturing PMI (Apr) increased from 56.4 to 57.2

Australia:

Commodity Prices (YoY) decreased from -6.9% to -19.2%

EUROPE/EMEA:

Inflation expectations in the UK decreased slightly in April, according to a survey by bank Citi, which could offer some relief to the Bank of England. The survey showed that public expectations for inflation in the next 12 months fell to 5.2%, down from 5.4% in March, and expectations for the next five to 10 years declined to 3.6% from 3.7%. Despite this, investors predict a 92% chance of a 25 basis-point increase in Bank Rate to 4.5%, with a 50% chance of reaching 5% by August. Consumer price inflation dropped to 10.1% in March, but remains above economists’ forecasts and is impacting workers’ spending power.

The major Europe stock markets had a green day today:

•  CAC 40 increased 7.66 points or 0.10% to 7,491.50
•  FTSE 100 increased 38.99 points, or 0.50% to 7,870.57
•  DAX 30 increased 121.93 points or 0.77% to 15,922.38

The major Europe currency markets had a mixed day today:

•  EURUSD decreased 0.00512 or -0.46% to 1.09688
•  GBPUSD decreased 0.0079 or -0.63% to 1.24930
•  USDCHF increased 0.00173 or 0.19% to 0.89583

US/AMERICAS:

Today marks the largest banking failure in the US since 2008 after First Republic went under. Regulators took possession of the bank this Monday and JPMorgan Chase will acquire the majority of the bank’s assets and remaining deposits worth around $92 billion. First Republic Bank’s stock fell nearly 50% after reporting a large drop in deposits in the first quarter of 2023. The bank’s stock value collapsed 97% on Friday due to fears of a bank run or failure. First Republic had been struggling with liquidity concerns, and its executives have been vague over the past few weeks regarding the health of the bank. The bank received a temporary $30 billion lifeline in March 2023 from the nation’s biggest banks, but those banks can withdraw their deposits as soon as July. The bank’s troubles are part of a broader banking crisis that has hit the US banking sector that Jerome Powell will certainly take into consideration at this week’s FOMC meeting.

US Market Closings:

• Dow declined 46.46 points or -0.14% to 34,051.7
• S&P 500 declined 1.61 points or -0.04% to 4,167.87
• Nasdaq declined 13.99 points or -0.11% to 12,212.6
• Russell 2000 advanced 0.22 of a point or 0.01% to 1,769.21

Canada Market Closings:

• TSX Composite declined 21.44 points or 0.1% to 20,615.1
• TSX 60 declined 1.45 points or -0.12% to 1,244.38

Brazil Market Closing:

• Bovespa advanced 1,508.32 points or 1.47% to 104,431.63

ENERGY:

The oil markets had a mixed day today:

•  Crude Oil decreased 1.549 USD/BBL or -2.02% to 75.231
•  Brent decreased 1.681 USD/BBL or -2.09% to 78.649
•  Natural gas decreased 0.0894 USD/MMBtu or -3.71% to 2.3206
•  Gasoline increased 0.003 USD/GAL or 0.12% to 2.5331
•  Heating oil decreased 0.0286 USD/GAL or -1.20% to 2.3485

Top commodity gainers: Copper (1.13%), Orange Juice (1.36%), HRC Steel (0.94%), and Cocoa (0.82%)

Top commodity losers: Wheat (-3.24%), Sugar (-5.45%), Palladium (-3.22%), and Natural Gas (-3.71%)

The above data was collected around 13:31 EST on Monday.

BONDS:

Japan 0.401%(+0.3bp), US 2’s 4.12% (+0.056%), US 10’s 3.5528%(+10.08bps); US 30’s 3.80% (+0.122%), Bunds 2.32% (-13.3bp), France 2.892% (-13.6bp), Italy 4.183% (-17bp), Turkey 12.60% (-62bp), Greece 4.209% (-7.5bp), Portugal 3.155% (-15.4bp), Spain 3.364% (-14.3bp) and UK Gilts 3.717% (-8.2bp).

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