Market Talk – February 16, 2023

ASIA:

India forecast economic growth of 6% to 6.8% in the 2023/24 fiscal year, slowing from the 7% growth projected for the current year ending on March 31, as a global slowdown is likely to hurt exports. The economic growth forecast for 2023/24 is higher than the International Monetary Fund’s projection of 6.1%, as the finance ministry expects the global weakness will be partially offset by strong domestic demand. India’s economy has rebounded since the COVID-19 pandemic. But the Russia-Ukraine conflict has triggered inflationary pressures and prompted central banks, including India’s, to reverse the ultra loose monetary policy adopted during the pandemic.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 194.58 points or 0.71% to 27,696.44
• Shanghai decreased 31.46 points or -0.96% to 3,249.03
• Hang Seng increased 175.50 points or 0.84% to 20,987.67
• ASX 200 increased 58.10 points or 0.79% to 7,410.30
• Kospi increased 47.58 points or 1.96% to 2,475.48
• SENSEX increased 44.42 points or 0.07% to 61,319.51
• Nifty50 increased 20.00 points or 0.11% to 18,035.85

The major Asian currency markets had a mixed day today:

• AUDUSD decreased 0.00124 or -0.18% to 0.68906
• NZDUSD decreased 0.00076 or -0.12% to 0.62724
• USDJPY decreased 0.268 or -0.20% to 133.842
• USDCNY increased 0.00226 or 0.03% to 6.86386

Precious Metals:

• Gold increased 4.78 USD/t oz. or 0.26% to 1,840.97
• Silver increased 0.059 USD/t. oz or 0.27% to 21.685

Some economic news from last night:

Japan:

Adjusted Trade Balance remain the same at -1.82T

Exports (YoY) (Jan) decreased from 11.5% to 3.5%

Trade Balance (Jan) decreased from -1,451.8B to -3,496.6B

Australia

Employment Change (Jan) increased from -19.9K to -11.5K

Full Employment Change (Jan) decreased from 14.4K to -43.3K

Unemployment Rate (Jan) increased from 3.5% to 3.7%

Some economic news from today:

Hong Kong:

Unemployment Rate (Jan) decreased from 3.5% to 3.4%

EUROPE/EMEA:

British Prime Minister Rishi Sunak arrived in Northern Ireland on Thursday evening to sound out whether its political parties back his plans to improve the post-Brexit trading arrangements for the province. Officials from Britain and the European Union have been in intense talks on the post-Brexit Northern Ireland trade and customs deal known as the protocol, with expectations growing that new terms could be announced next week. Support from the largest pro-British party, the DUP, is likely to be crucial after it boycotted Northern Ireland’s devolved parliament over the protocol. A senior member of the DUP said on Thursday they had not seen the details.

The major Europe stock markets had a green day:

• CAC 40 increased 65.30 points or 0.89% to 7,366.16
• FTSE 100 increased 14.70 points or 0.18% to 8,012.53
• DAX 30 increased 27.30 points or 0.18% to 15,533.64

The major Europe currency markets had a mixed day today:

• EURUSD decreased 0.00141 or -0.13% to 1.06749
• GBPUSD decreased 0.00324 or -0.27% to 1.19936
• USDCHF increased 0.00040 or 0.04% to 0.92400

US/AMERICAS:

Wholesale prices rose by 0.7% in January, surpassing the 0.4% general estimate, according to the US Labor Department. The producer price index (PPI) grew by 0.7%, marking the largest monthly increase since June. Core PPI advanced 0.5%, while core trade services rose by 0.6%. Headline PPI has increased 6% over the last 12 months in the US. Today’s report coincides with the CPI report that noted a 0.5% increase.

Cleveland Fed President Loretta Mester stated that she is optimistic about prices stabilizing and believes the US will experience “meaningful” improvement this year. “My expectation is that we will see a meaningful improvement in inflation this year and further improvement over the following year, with inflation reaching our 2% goal in 2025,” Mester stated. However, she noted her outlook was contingent on “appropriate monetary policy.” The general consensus is that the Federal Open Market Committee will raise rates a few more times this year, and recent data on inflation supports this belief.

US Market Closings:

• Dow declined 431.2 points or -1.26% to 33,696.85
• S&P 500 declined 57.19 points or -1.38% to 4,090.41
• Nasdaq declined 214.76 points or -1.78% to 11,855.83
• Russell 2000 declined 18.76 points or -0.96% to 1,942.21

Canada Market Closings:

• TSX Composite declined 113.97 points or -0.55% to 20,606.42
• TSX 60 declined 7.97 points or -0.64% to 1,241.61

Brazil Market Closing:

• Bovespa advanced 341.32 points or 0.31% to 109,941.46

ENERGY:

The oil markets had a negative day today:

• Crude Oil decreased 0.345 USD/BBL or -0.44% to 78.245
• Brent decreased 0.469 USD/BBL or -0.55% to 84.911
• Natural gas decreased 0.0675 USD/MMBtu or -2.73% to 2.4035
• Gasoline decreased 0.0769 USD/GAL or -3.08% to 2.4209
• Heating oil decreased 0.0444 USD/GAL or -1.56% to 2.8000

The above data was collected around 15:23 EST on Thursday

• Top commodity gainers: Copper (2.37%), Palm Oil (3.38%), Bitumen (2.55%), and Palladium (3.77%)
• Top commodity losers: Lumber (-2.64%), Gasoline (-3.08%), Natural Gas (-2.73%), and Coal (-2.68%)

The above data was collected around 15:32 EST on Thursday

BONDS:

Japan 0.500%(+0bp), US 2’s 4.64% (+0.017%), US 10’s 3.8666%(+5.96bps); US 30’s 3.93% (+0.078%), Bunds 2.499% (+2.5bp), France 2.945% (+0.7bp), Italy 4.324% (+0bp), Turkey 10.69% (-30bp), Greece 4.313% (+7.4bp), Portugal 3.382% (+1.1bp); Spain 3.546% (+2.9bp) and UK Gilts 3.502% (+1.5bp).

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