Market Talk – April 2, 2022

ASIA:

China’s factory activity slumped at the fastest pace in two years in March, a private sector PMI showed, as the fallout from the Ukraine crisis and resurgence in domestic coronavirus cases hit external and domestic demand. The outcome was in line with Thursday’s official data showing activity in Chinese manufacturing and services simultaneously contracted for the first time since the height of the country’s COVID-19 outbreak in 2020.

India’s current account deficit widened in the three months to December, mainly on the back the higher trade deficit, India’s central bank – the Reserve Bank of India said. India’s current account deficit (CAD) stood at $23 billion or 2.7% of GDP in the third quarter of fiscal year 2021/22, compared with a deficit of $2.2 billion or 0.3% of GDP as year earlier. Private transfer receipts, mainly remittances by overseas Indians, rose 13.1% on the year, while net foreign direct investment showed an inflow of $5.1 billion, lower than $17.4 billion in the same quarter a year ago. The country’s balance of payments stood at a small surplus of $0.5 billion in the third quarter of the financial year, compared with a surplus of $32.5 billion a year earlier.

South Korea’s factory activity slowed with new export orders posting the sharpest reduction since July 2020, as companies took a hit from rising input prices for goods ranging from oil and metals to semiconductors. Factory activity also slowed in Taiwan and Vietnam, and contracted in Malaysia, as the region felt the pain from rising raw material prices, other PMIs released on Friday showed.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 155.45 points or -0.56% to 27,665.98
  • Shanghai increased 30.51 points or 0.94% to 3,282.72
  • Hang Seng increased 42.70 points or 0.19% to 22.039.55
  • ASX 200 decreased 5.80 points or -0.08% to 7,493.80
  • Kospi decreased 17.80 points or -0.65% to 2,739.85
  • SENSEX increased 708.18 points or 1.21% to 59,276.69
  • Nifty50 increased 205.70 points or 1.18% to 17,670.45

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00000 or 0.00% to 0.74933
  • NZDUSD decreased 0.00190 or -0.27% to 0.69109
  • USDJPY increased 0.858 or 0.70% to 122.690
  • USDCNY increased 0.01450 or 0.23% to 6.36926
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Precious Metals:

  • Gold decreased 10.35 USD/t oz. or -0.53% to 1,926.88
  • Silver decreased 0.008 USD/t. oz or -0.03% to 24.764

Some economic news from last night:

China:

Caixin Manufacturing PMI (Mar) decreased from 50.4 to 48.1

Japan:

Manufacturing PMI (Mar) increased from 52.7 to 54.1

Tankan All Big Industry CAPEX (Q1) decreased from 9.3% to 2.2%

Tankan All Small Industry CAPEX (Q1) decreased from 5.1% to -11.4%

Tankan Big Manufacturing Outlook Index (Q1) decreased from 13 to 9

Tankan Large Manufacturers Index (Q1) decreased from 17 to 14

Tankan Large Non-Manufacturers Diffusion Index (Q1) decreased from 9 to 7

Tankan Large Non-Manufacturers Index (Q1) decreased from 10 to 9

South Korea:

Exports (YoY) (Mar) decreased from 20.6% to 18.2%

Imports (YoY) (Mar) increased from 25.2% to 27.9%

Trade Balance (Mar) decreased from 0.83B to -0.14B

Nikkei Manufacturing PMI (Mar) decreased from 53.8 to 51.2

Australia:

Home Loans (MoM) decreased from 1.0% to -4.7%

Invest Housing Finance (MoM) decreased from 6.1% to -1.8%

AIG Manufacturing Index (Mar) increased from 53.2 to 55.7

Manufacturing PMI increased from 57.0 to 57.7

Some economic news from today

India:

Exports (USD) increased from 34.57B to 40.38B

Imports (USD) increased from 55.45B to 59.07B

Trade Balance increased from -20.88B to -18.69B

FX Reserves, USD decreased from 619.68B to 617.65B

Australia:

Commodity Prices (YoY) increased from 16.7% to 40.9%

EUROPE/EMEA:

Global factory activity slowed in March as Russia’s invasion of Ukraine tightened supply chain bottlenecks, dampened demand and whacked confidence, while soaring energy costs drove a broader surge in prices, surveys showed on Friday. Uncertainty caused by the invasion, combined with an intensifying cost-of-living crisis, suggests the eurozone’s manufacturing industry could slide into a recession this quarter.

S&P Global’s final manufacturing Purchasing Managers’ Index (PMI) for the euro zone fell to a 14-month low of 56.5 in March from February’s 58.2, below an initial “flash” estimate of 57.0 but still well above the 50 mark that separates growth from contraction. German manufacturers reported slower growth and far more pessimistic expectations for factory activity, and French manufacturing growth eased a bit more than forecast. Confidence indicators in the region have plummeted and the eurozone future output PMI plunged to its lowest reading since May 2020.

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The major Europe stock markets had a green day:

  • CAC 40 increased 24.44 points or 0.37% to 6,684.31
  • FTSE 100 increased 22.22 points or 0.30% to 7,537.90
  • DAX 30 increased 31.73 points or 0.22% to 14,446.48

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00290 or -0.26% to 1.10420
  • GBPUSD decreased 0.00380 or -0.29% to 1.31080
  • USDCHF increased 0.00230 or 0.25% to 0.92625

Some economic news from Europe today:

Swiss:

PI (YoY) (Mar) increased from 2.2% to 2.4%

CPI (MoM) (Mar) decreased from 0.7% to 0.6%

procure.ch PMI (Mar) increased from 62.6 to 64.0

France:

French Manufacturing PMI (Mar) decreased from 54.8 to 54.7

French Government Budget Balance (Feb) decreased from -15.9B to -37.6B

Spain:

Spanish Manufacturing PMI (Mar) decreased from 56.9 to 54.2

Italy:

Italian Manufacturing PMI (Mar) decreased from 58.3 to 55.8

Italian Trade Balance Non-EU (Feb) increased from -4.17B to -1.55B

Germany:

German Manufacturing PMI (Mar) decreased from 57.6 to 56.9

UK:

Manufacturing PMI (Mar) decreased from 58.0 to 55.2

Euro Zone:

Manufacturing PMI (Mar) decreased from 58.2 to 56.5

Core CPI (MoM) increased from 0.9% to 2.5%

Core CPI (YoY) increased from 2.7% to 3.0%

CPI (MoM) increased from 0.9% to 2.5%

CPI (YoY) (Mar) increased from 5.9% to 7.5%

CPI, n.s.a (Mar) increased from 111.74 to 114.50

HICP ex Energy & Food (YoY) (Mar) increased from 2.9% to 3.2%

HICP ex Energy and Food (MoM) increased from 0.6% to 1.1%

US/AMERICAS:

The unemployment rate has fallen to 3.6% in the US, according to the highly anticipated report from the Labor Department. Nonfarm payrolls reached 431,000 in March, beneath the expectation of 490,000, but still presents a signal for a strengthened workforce. Per usual, the leisure and hospitality sector saw the most notable uptick after attracting over 112,000 new employees but remains depleted from pre-COVID standards. Professional and business services advanced by 102,000, with an uptick in seasonal accounting work accounting for 18,000 positions.

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The House of Representatives voted to legalize marijuana this Friday in a 220-204 vote. The Marijuana Opportunity Reinvestment and Expungement (MORE) Act would decriminalize marijuana at the federal level and would permit farmers to cultivate marijuana and businesses to sell it to consumers as a taxable commodity. The tax would start at 5% before increasing to 8%. However, the bill passed last year but failed to pass the Senate.

Press Secretary Jen Psaki announced plans to leave the White House this Friday to pursue a job in broadcasting. Psaki

US Market Closings:

  • Dow advanced 139.92 points or 0.4% to 34,818.27
  • S&P 500 advanced 15.45 points or 0.34% to 4,545,86
  • Nasdaq advanced 40.98 points or 0.29% to 14,261.5
  • Russell 2000 advanced 20.99 points or 1.01% to 2,091.11

Canada Market Closings:

  • TSX Composite advanced 62.79 points or 0.29% to 21,952.95
  • TSX 60 advanced 3.9 points or 0.29% to 1,326.57

Brazil Market Closing:

  • Bovespa advanced 1,570.92 points or 1.31% to 121,570.15

ENERGY:

The oil markets had a mixed day today:

  • Crude Oil decreased 0.39 USD/BBL or -0.39% to 99.8800
  • Brent increased 0.02 USD/BBL or 0.02% to 104.7300
  • Natural gas increased 0.095 USD/MMBtu or 1.68% to 5.7370
  • Gasoline decreased 0.0046 USD/GAL or -0.15% to 3.1461
  • Heating oil increased 0.0308 USD/GAL or 0.92% to 3.3917

The above data was collected around 12:04 EST on Friday

  • Top commodity gainers: Natural Gas (1.68%) and Canola (1.36%), Zinc(3.87%), Orange Juice (2.86%)
  • Top commodity losers: Bitumen(-2.34%), Aluminum (-1.23%), Cocoa(-1.66%) and Palm Oil(-2.37%)

The above data was collected around  12:12 EST on Friday.

BONDS:

Japan 0.2260%(+1.2bp), US 2’s 2.43% (+0.095%), US 10’s 2.3803% (+3.51bps); US 30’s 2.43% (-0.027%), Bunds 0.555% (+0.8bp), France 1.026% (+4.1bp), Italy 2.099% (+5.7bp), Turkey 23.96% (+0bp), Greece 2.68% (+0.8bp), Portugal 1.389% (+1.8bp); Spain 1.484% (+4bp) and UK Gilts 1.614% (-1.1bp).

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