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Market Talk – May 2, 2022


ASIA:

China supports crisis-hit Sri Lanka’s decision to work with the International Monetary Fund (IMF) to restructure its debt, Beijing’s ambassador Qi Zhenhong told Sri Lankan Finance Minister Ali Sabry at a meeting on Monday. Sri Lanka last month unilaterally suspended external debt repayments before approaching the IMF for help. China is one of Sri Lanka’s largest bilateral lenders with about $6.5 billion in loans.

India’s unemployment rate rose to 7.83% in April from 7.60% in March, data from the Centre for Monitoring Indian Economy (CMIE) showed on Sunday. The urban unemployment rate rose to 9.22% in April from 8.28% the previous month, while the rural unemployment rate slipped to 7.18% from 7.29%, the data showed. Economists say job opportunities have been hit by sluggish domestic demand and the slow pace of economic recovery amid rising prices. Retail inflation rose to a 17-months high of 6.95% in March and is likely to peak around 7.5% later this year. Economists expect a repo rate hike by the central bank in June.

Analysts at J.P. Morgan downgraded Thailand’s equities rating on Monday, citing the slow pace of recovery in the tourism industry due to rising inflation and a surge in COVID-19 cases in China. Travel and tourism in Southeast Asia – known for its white sand beaches, historical architecture and warm climate – contributed $380.6 billion to the region’s GDP in 2019, or 11.8% of the total, according to World Travel and Tourism Council. Thailand’s tourism industry contributed to 12% of the country’s GDP before the pandemic. Thailand’s economic activity improved in April following easing of COVID restrictions but remained under pressure from rising living costs after a slowdown the previous month, its central bank said on Friday.

 

The major Asian stock markets had a negative day today:• NIKKEI 225 decreased 29.37 points or -0.11% to 26,818.53• Shanghai closed• Hang Seng closed• ASX 200 decreased 88.00 points or -1.18% to 7,347.00• Kospi decreased 7.60 points or -0.28% to 2,687.45• SENSEX decreased 84.88 points or -0.15% to 56,975.99• Nifty50 decreased 33.45 points or -0.20% to 17,069.10

The major Asian currency markets had a mixed day today:• AUDUSD decreased 0.00189 or -0.27% to 0.70402• NZDUSD decreased 0.00328 or -0.51% to 0.64228• USDJPY   increased 0.372 or 0.29% to 130.202• USDCNY increased 0.04363 or 0.66% to 6.68353

Precious Metals:• Gold decreased 30.65 USD/t oz. or -1.62% to 1,865.75• Silver decreased 0.174 USD/t. oz or -0.77% to 22.566

Some economic news from last night:Japan:Manufacturing PMI (Apr) decreased from 54.1 to 53.5South Korea:Nikkei Manufacturing PMI (Apr) increased from 51.2 to 52.1Australia:AIG Manufacturing Index (Apr) increased from 55.7 to 58.5ANZ Job Advertisements (MoM) decreased from 0.7% to -0.5%

Some economic news from todayIndia:Nikkei Markit Manufacturing PMI (Apr) increased from 54.0 to 54.7Japan:Household Confidence (Apr) increased from 32.8 to 33.0Australia:Commodity Prices (YoY) decreased from 40.9% to 39.9%

EUROPE/EMEA:

The European Union was preparing sanctions on Russian oil on Monday, with possible exemptions for wary countries, and warned that complying in full with Moscow’s proposed scheme to receive gas payments in roubles would breach existing EU sanctions. The European Commission is expected to propose a sixth package of EU sanctions this week against Russia over its invasion of Ukraine, including a potential embargo on buying Russian oil – a measure that would deprive Moscow of a large revenue stream, but that has so far divided EU countries. Russia supplies 40% of EU gas and 26% of its oil imports.

To keep the 27-nation bloc united, the Commission may offer Hungary and Slovakia an exemption or a long transition period – with any overall ban likely to be phased in by the year-end, officials said on Monday. Both Hungary and Slovakia are heavily dependent on Russian crude. Hungary has said it would oppose energy sanctions.

Italy on Monday approved a new stimulus package worth 14 billion euros ($14.71 billion) to shield firms and families from the economic impact of the war in Ukraine, Prime Minister Mario Draghi said. The measures will not push up the country’s budget deficit this year and will partly be financed by increasing a windfall tax on energy companies, Draghi told reporters after cabinet approved the government decree.


The major Europe stock markets had a negative day:• CAC 40 decreased 108.16 points or -1.66% to 6,425.61• FTSE 100 closed• DAX 30  decreased 158.81 points or -1.13% to 13,939.07

The major Europe currency markets had a mixed day today:• EURUSD decreased 0.00461 or -0.44% to 1.05016• GBPUSD decreased 0.00815 or -0.65% to 1.24904• USDCHF increased 0.00484 or 0.50% to 0.97811

Some economic news from Europe today:Germany:German Retail Sales (MoM) (Mar) decreased from 0.3% to -0.1%German Retail Sales (YoY) (Mar) decreased from 7.0% to -2.7%German Manufacturing PMI (Apr) decreased from 56.9 to 54.6Swiss:SECO Consumer Climate (Q2) decreased from 3 to -18procure.ch PMI (Apr) decreased from 64.0 to 62.5Spain:Spanish Manufacturing PMI (Apr) decreased from 54.2 to 53.3Italy:Italian Manufacturing PMI (Apr) decreased from 55.8 to 54.5Italian Monthly Unemployment Rate (Mar) decreased from 8.5% to 8.3%France:French Manufacturing PMI (Apr) increased from 54.7 to 55.7Norway:Manufacturing PMI (Apr) increased from 59.7 to 60.6Euro Zone:Manufacturing PMI (Apr) decreased from 56.5 to 55.5Business and Consumer Survey (Apr) decreased from 106.7 to 105.0Business Climate (Apr) increased from 1.68 to 1.98Consumer Confidence (Apr) decreased from -21.6 to -22.0Consumer Inflation Expectation (Apr) decreased from 62.9 to 50.0Selling Price Expectations (Apr) increased from 57.2 to 60.8Services Sentiment (Apr) decreased from 13.6 to 13.5Industrial Sentiment (Apr) decreased from 9.0 to 7.9

US/AMERICAS:

It’s a busy week for the economy as the market awaits the Fed’s next decision later in the week. The first quarter of the year has not been favorable for Wall Street. The Nasdaq is down 21%, while the Dow is down 9%. The S&P managed to drop 13% during the first three months of the year. Netflix’s recent 68% plummet took a toll on the S&P 500 while other tech stocks such as Facebook and Amazon also underperformed.

US Market Closings:

  • Dow advanced 84.29 points or 0.26% to 33,061.5
  • S&P 500 advanced 23.47 points or 0.57% to 4,155.4
  • Nasdaq advanced 201.38 points or 1.63% to 12,536.02
  • Russell 2000 advanced 18.81 points or 1.01% to 1,882.91

 

Canada Market Closings:

  • TSX Composite declined 69.78 points or -0.34% to 20,692.22
  • TSX 60 declined 1.16 points or -0.09% to 1,254.38

 

Brazil Market Closing:

  • Bovespa declined 1,237.52 points or -1.15% to 106,638.64

ENERGY:

The oil markets had a green day today:

• Crude Oil increased 0.68 USD/BBL or 0.65% to 105.370• Brent increased 0.76 USD/BBL or 0.71% to 107.90• Natural gas increased 0.223 USD/MMBtu or 3.08% to 7.4670• Gasoline increased 0.0812 USD/GAL or 2.36% to 3.5229• Heating oil increased 0.2071 USD/GAL or 5.16% to 4.2243

The above data was collected around 13:51 EST on Monday  • Top commodity gainers: Heating Oil (5.16%) and Natural Gas (3.08%),  Gasoline (2.36%),  Feeder Cattle (3.21%)• Top commodity losers: Copper(-3.19%),  Sugar (-2.64%), Palladium (-4.52%) and Coffee (-2.65%)

The above data was collected around 13:58 EST on Monday

BONDS: 

Japan 0.2350%(+1.8bp), US 2’s 2.72% (-0.014%), US 10’s 2.9748% (+3.73bps); US 30’s 3.05% (+0.051%), Bunds 0.957% (+2.2bp), France 1.481% (+1.8bp), Italy 2.8600% (+8.5bp), Turkey 20.27% (+35bp), Greece 3.393% (+5.8bp), Portugal 2.071% (+3.9bp); Spain 2.043% (+6.2bp) and UK Gilts 1.9050% (-0.2bp).

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