Market Talk – May 8, 2023

ASIA:

The UAE and India are expected to surpass their non-oil trade target of $50 billion this year, on their way to reaching the $100 billion goal by 2030. Bilateral non-oil trade reached $45.5 billion between May 2022 and March 2023, with a 7% increase from the previous year. In the first quarter of 2023, bilateral trade increased by 24.7% from the previous quarter, with non-oil exports from the UAE to India increasing by 33% and India’s re-exports to the UAE increasing by 31.5%.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 decreased 208.07 points or -0.71% to 28,949.88
• Shanghai increased 60.50 points or 1.81% to 3,395.00
• Hang Seng increased 247.72 points or 1.24% to 20,297.03
• ASX 200 increased 56.50 points or 0.78% to 7,276.50
• Kospi increased 12.27 points or 0.49% to 2,513.21
• SENSEX increased 709.96 points or 1.16% to 61,764.25
• Nifty50 increased 195.40 points or 1.08% to 18,264.40

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00408 or 0.60% to 0.67888
• NZDUSD increased 0.00564 or 0.90% to 0.63494
• USDJPY decreased 0.119 or -0.09% to 134.711
• USDCNY decreased 0.00176 or -0.03% to 6.91884

Precious Metals:

• Gold increased 10.47 USD/t oz. or 0.52% to 2,027.01
• Silver decreased 0.017 USD/t. oz or -0.06% to 25.634

Some economic news from last night:

Japan:

Services PMI (Apr) increased from 55.0 to 55.4

Australia:

Building Approvals (MoM) (Mar) decreased from 3.9% to -0.1%

NAB Business Confidence (Apr) increased from -1 to 0

EUROPE/EMEA:

The European markets traded muted on the first trading day of the week, reversing gains from Friday’s session as investors await more corporate earnings and Bank of England rate hike meeting decision scheduled on Thursday. The French CAC was last trading 0.1 percent lower. The biggest European market by volume, German DAX was last trading marginally lower. The European stocks closed higher on Friday. The British FTSE ended nearly a percent in the green. German DAX ended 1.4 percent higher. The French CAC ended 0.1 percent lower. The European Central Bank announced a 25 basis point hike in interest rates on Thursday.

Abu Dhabi’s gross domestic product (GDP) grew by 9.3% in 2021 to reach Dh1.1 trillion ($299.5 billion), with the non-oil sector accounting for 50% of this growth. The city aims to increase its non-oil exports by 143% to Dh178.8 billion ($48.7 billion) by 2031. Abu Dhabi’s economy grew by 10.5% in the first nine months of 2022, the fastest expansion in the Mena region. Abu Dhabi and the UAE are focusing on attracting foreign direct investment and diversifying their economies away from oil.

The major Europe stock markets had a mixed day today:

• CAC 40 increased 7.98 points or 0.11% to 7,440.91
• FTSE 100 increased 75.74 points or 0.98% to 7,778.38
• DAX 30 decreased 8.19 points or -0.05% to 15,952.83

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00116 or 0.11% to 1.10286
• GBPUSD increased 0.00007 or 0.01% to 1.26417
• USDCHF decreased 0.0031 or -0.35% to 0.88790

Some economic news from Europe today:

Germany:

German Industrial Production (MoM) (Mar) decreased from 2.1% to -3.4%

US/AMERICAS:

The Congressional Budget Office (CBO) has stated that the US will default on its debt sometime this summer if Congress does not raise the $31.4 trillion debt limit. The Treasury Department reached the debt limit on January 19, 2023, and announced a “debt issuance suspension period,” during which it can use extraordinary measures to continue borrowing. However, the Treasury Department estimates that those measures will be sufficient through at least early June. Republicans are asking the Biden Administration to curb its spending befoe they agree to raise the limit. The government may be forced to default on some of its spending obligations if an agreement is not achieved, which could lead to severe negative consequences.

US Market Closings:

• Dow declined 55.69 points or -0.17% to 33,618.69
• S&P 500 advanced 1.87 points or 0.05% to 4,138.12
• Nasdaq advanced 21.5 points or 0.18% to 12,256/92
• Russell 2000 declined 5.41 points or -0.31% to 1,754.47

Canada Market Closings:

• TSX Composite advanced 43.12 points or 0.21% to 20,585.15
• TSX 60 advanced 2.34 points or 0.19% to 1,243.04

Brazil Market Closing:

• Bovespa advanced 893.67 points or 0.85% to 106,042.15

ENERGY:

Crude oil prices jumped on Monday. At the last count, brent crude futures were trading one percent higher at $76.1 a barrel. US West Texas Intermediate futures, too, were trading 1.2 percent in the green at $72.2 per barrel.

The oil markets had a green day today:

• Crude Oil increased 1.542 USD/BBL or 2.16% to 72.882
• Brent increased 1.692 USD/BBL or 2.25% to 76.992
• Natural gas increased 0.0889 USD/MMBtu or 4.16% to 2.2259
• Gasoline increased 0.0735 USD/GAL or 3.09% to 2.4525
• Heating oil increased 0.0594 USD/GAL or 2.57% to 2.3741

The above data was collected around 13:08 EST on Monday

• Top commodity gainers: Natural Gas (4.16%), Palm Oil (4.47%), Potatoes (5.06%) and Palladium (4.50%)
• Top commodity losers: Rapeseed (-4.35%), Wheat (-0.85%), Sugar (-0.95%) and Lumber (-0.84%)

The above data was collected around 13:17 EST Monday.

BONDS:

Japan 0.411% (-1bp), US 2’s 3.96% (+0.040%), US 10’s 3.4976% (+5.16bps); US 30’s 3.82% (+0.059%), Bunds 2.322% (+2.9bp), France 2.91% (+3bp), Italy 4.237% (+3.9bp), Turkey 12.71% (+79bp), Greece 4.07% (+0.9bp), Portugal 3.191% (+3.6bp); Spain 3.407% (+2.9bp) and UK Gilts 3.781% (+12.7bp).

The post Market Talk – May 8, 2023 first appeared on Armstrong Economics.