Market Talk – March 28, 2023

ASIA:

The US and Japan have agreed to not impose export duties on critical minerals needed for electric vehicle batteries. The agreement is aimed at reinforcing supply chains and reducing dependence on China, which currently dominates the sector. The US law requires 40% of critical minerals in eligible EV batteries to be extracted from countries with free-trade agreements, rising to 80% in 2027, which would have excluded the EU and Japan. Rare earth elements and minerals like lithium are crucial for clean energy, but the US is expected to face supply gaps to meet demand for EV

The major Asian stock markets had a mixed day today:

• NIKKEI 225 increased 41.38 points or 0.15 % to 27,518.25
• Shanghai decreased 6.02 points or -0.19% to 3,245.38
• Hang Seng increased 216.96 points or 1.11% to 19,784.65
• ASX 200 increased 72.10 points or 1.04% to 7,034.10
• Kospi increased 25.72 points or 1.07% to 2,434.94
• SENSEX decreased 40.14 points or -0.07% to 57,613.72
• Nifty50 decreased 34.00 points or -0.20% to 16,951.70

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00531 or 0.80% to 0.67021
• NZDUSD increased 0.00495 or 0.80% to 0.62435
• USDJPY decreased 0.803 or -0.61% to 130.757
• USDCNY increased 0.00041 or 0.01% to 6.88221

Precious Metals:

• Gold increased 15.73 USD/t oz. or 0.80% to 1,972.29
• Silver increased 0.21 USD/t. oz or 0.91% to 23.305

Some economic news from last night:

Australia:

Retail Sales (MoM) (Feb) decreased from 1.8% to 0.2%

Some economic news from today:

Japan:

BoJ Core CPI (YoY) decreased from 3.1% to 2.7%

EUROPE/EMEA:

Bank lending to euro zone companies slowed for the fourth consecutive month in February, with lending to businesses expanding by 5.7% and household credit growth slowing to 3.2%. The slowdown in lending is attributed to an economic downturn and increased caution from lenders. The monthly flow of loans to companies was a negative 2.6 billion euros, and surveys indicate that lending figures could weaken further in the months ahead. Growth in the M3 measure of money circulating in the euro zone also slowed to 2.9%, falling below expectations for 3.2%.

The major Europe stock markets had a green day:

• CAC 40 increased 10.07 points or 0.14% to 7,088.34
• FTSE 100 increased 12.48 points or 0.17% to 7,484.25
• DAX 30 increased 14.34 points or 0.09% to 15,142.02

The major Europe currency markets had a green day today:

• EURUSD increased 0.00467 or 0.43% to 1.08427
• GBPUSD increased 0.00536 or 0.44% to 1.23376
• USDCHF increased 0.00366 or 0.40% to 0.91936

Some economic news from Europe today:

France:

French Business Survey (Mar) decreased from 105 to 104

Italy:

Italian Business Confidence (Mar) increased from 103.0 to 104.2

Italian Consumer Confidence (Mar) increased form 104.0 to 105.1

US/AMERICAS:

Federal Reserve Board Vice Chair for Supervision Michael S. Barr testified before the Senate Banking Committee this Tuesday, revealing that the situation at Silicon Valley Bank (SVB) was worse than previously thought. The bank run that began on March 9 saw $42 billion withdrawn from the bank. When regulators stepped in on September 10, depositors tried to withdraw an additional $100 billion—and the bank would not have been able to pay. In comparison, SVB had only $175 billion in deposit at the end of 2022. Barr said that SVB was warned in November 2021 of the risk higher interest rates would pose, but they failed to properly mitigate those risks. Barr is now seeking additional regulations for banks with over $100 billion in deposits.

US Market Closings:

• Dow declined 37.83 points or -0.12% to 32,394.25
• S&P 500 declined 6.26 points or -0.16% to 3,971.27
• Nasdaq declined 52.76 points or -0.45% to 11,716.08
• Russell 2000 declined 1.04 points or -0.06% to 1,752.63

Canada Market Closings:

• TSX Composite advanced 32.79 points or 0.17% to 19,657.53
• TSX 60 advanced 1.45 points or 0.12% to 1,180.28

Brazil Market Closing:

• Bovespa advanced 1,514.62 points or 1.52% to 101,185.09

ENERGY:

The oil markets had a mixed day today:

• Crude Oil increased 0.424 USD/BBL or 0.58% to 73.234
• Brent increased 0.63 USD/BBL or 0.81% to 78.750
• Natural gas decreased 0.08 USD/MMBtu or -3.83% to 2.0080
• Gasoline increased 0.0311 USD/GAL or 1.16% to 2.7153
• Heating oil decreased 0.0099 USD/GAL or -0.36% to 2.7605

The above data was collected around 15:11 EST on Tuesday

• Top commodity gainers: Palm Oil (3.10%), Sugar (1.82%), Cotton (3.75%) and Bitumen (2.22%)
• Top commodity losers: Coffee (-1.78%), Lumber (-3.27%), Lean Hogs (-1.27%) and Natural Gas (-3.83%)

The above data was collected around 15:16 EST Tuesday.

BONDS:

Japan 0.319% (+2.6bp), US 2’s 4.05% (+0.046%), US 10’s 3.5544% (+2.64bps); US 30’s 3.77% (+0.014%), Bunds 2.294% (+6.7bp), France 2.81% (+6.2bp), Italy 4.141% (+8bp), Turkey 10.91% (-83bp), Greece 4.205% (+4.5bp), Portugal 3.182% (+7bp); Spain 3.332% (+6.8bp) and UK Gilts 3.454% (+8.9bp).

The post Market Talk – March 28, 2023 first appeared on Armstrong Economics.