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Market Talk – May 4, 2022


ASIA:

China’s central bank on Wednesday pledged monetary policy support to ensure ample liquidity, help businesses badly hit by the latest COVID-19 outbreak in the country and support a recovery in consumption. Financing institutions should aim to meet the needs of the real economy, the PBOC said, such as boosting financing for small firms with lower costs, helping import and export firms, as well as the service sector and aviation companies which have been badly hit by the pandemic. The bank also called for “stable and orderly” growth in financing the real estate sector, which has experienced a prolonged slowdown in recent months.

IMF recent economic forecast predicted that India may India may only become a $5-trillion economy in FY29. According to data from the IMF’s World Economic Outlook Database, updated last month, India’s nominal GDP is seen rising to $4.92 trillion in FY28. As such, it will only be in the following year, or FY29, that the GDP will cross the $5-trillion mark. That’s four years beyond the target the Narendra Modi government had set. According to the IMF forecasts, India’s nominal GDP in expected to grow 13.4 percent in FY23 in rupee terms. In US dollar terms, the nominal GDP growth in FY23 is forecast at 8.2 percent. The difference between the two nominal growth rates is down to the change in the exchange rate, with the rupee seen depreciating to 81.5 per dollar in FY23 from 77.7 per dollar in FY22. The IMF’s forecasts assume a steady depreciation of the rupee against the greenback every year.

 

The major Asian stock markets had a negative day today:

  • NIKKEI 225 closed
  • Shanghai closed
  • Hang Seng decreased 232.37 points or -1.10% to 20,869.52
  • ASX 200 decreased 11.50 points or -0.16% to 7,304.70
  • Kospi decreased 2.89 points or -0.11% to 2,677.57
  • SENSEX decreased 1,306.96 points or -2.29% to 55,669.03
  • Nifty50 decreased 391.50 points or -2.29% to 16,677.60

 

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00445 or 0.63% to 0.71439
  • NZDUSD increased 0.00184 or 0.29% to 0.64470
  • USDJPY decreased 0.071 or -0.05% to 130.072
  • USDCNY increased 0.01358 or 0.20% to 6.66005

 

Precious Metals:

  • Gold decreased 3.64 USD/t oz. or -0.19% to 1,864.15
  • Silver decreased 0.247 USD/t. oz or -1.09% to 22.308

 

 

Some economic news from last night:

South Korea:

FX Reserves – USD (Apr) decreased from 457.81B to 449.30B

Australia:

AIG Construction Index (Apr) decreased from 56.5 to 55.9

Home Loans (MoM) increased from -4.7% to 0.9%

Invest Housing Finance (MoM) increased from -1.8% to 2.9%

Retail Sales (MoM) (Mar) decreased from 1.8% to 1.6%

New Zealand:

ANZ Commodity Price Index (MoM) decreased from 3.9% to -1.9%

Employment Change (QoQ) (Q1) remain the same at 0.1%

Labor Cost Index (YoY) (Q1) increased from 2.8% to 3.1%

Labor Cost Index (QoQ) (Q1) remain the same at 0.7%

Participation Rate (Q1) decreased from 71.10% to 70.90%

Unemployment Rate (Q1) remain the same at 3.2%

 

Some economic news from today

India:

Cash Reserve Ratio increased from 4.00% to 4.50%

Interest Rate Decision remain the same at 4.40%

Reverse REPO Rate remain the same at 3.35%

Singapore:

Manufacturing PMI (Apr) increased from 50.1 to 50.3

 

 

 

EUROPE/EMEA:

Britain banned all service sector exports to Russia on Wednesday and imposed sanctions on 63 individuals and organizations, its latest wave of measures to increase pressure on Moscow to reverse course and pull back from Ukraine. The measures, the government said, would cut off Russia’s access to Britain’s management consulting, accounting and PR services, cementing a decision many had already taken for themselves, including the so-called Big Four accounting and consultancy firms — Deloitte, EY, KPMG and PwC. Britain also imposed sanctions on individual journalists and media organizations.

Maersk has found possible buyers for its stake in Global Ports Investments, which operates ports in Russia as it withdraws from the country following a final cargo shipment this week, the Danish shipping group said on Wednesday. Maersk put its 30.75% share of Global Ports up for sale as it decided to quit Russia because of its invasion of Ukraine. One of the world’s biggest container shippers with a market share of around 17%, Maersk also said that while consumers had spent more on goods during the pandemic rather than services such as restaurants and travel, that was changing.

 

The major Europe stock markets had a negative day:

  • CAC 40 decreased 80.50 points or -1.24% to 6,395.68
  • FTSE 100 decreased 67.88 points or -0.90% to 7,493.45
  • DAX 30 decreased 68.65 points or -0.49% to 13,970.82

 

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00211 or 0.20% to 1.05411
  • GBPUSD decreased 0.00095 or -0.08% to 1.24846
  • USDCHF increased 0.00508 or 0.52% to 0.98430

 

Some economic news from Europe today:

Germany:

German Composite PMI (Apr) decreased from 55.1 to 54.3

German Services PMI (Apr) increased from 56.1 to 57.6

German Exports (MoM) (Mar) decreased from 6.2% to -3.3%

German Imports (MoM) (Mar) decreased from 4.7% to 3.4%

German Trade Balance (Mar) decreased from 11.1B to 3.2B

Spain:

Spanish Unemployment Change decreased from -2.9K to -86.3K

Spanish Services PMI (Apr) increased from 53.4 to 57.1

Italy:

Italian Composite PMI (Apr) increased from 52.1 to 54.5

Italian Services PMI (Apr) increased from 52.1 to 55.7

France:

French Markit Composite PMI (Apr) increased from 56.3 to 57.6

French Services PMI (Apr) increased from 57.4 to 58.9

UK:

BoE Consumer Credit (Mar) decreased from 1.563B to 1.303B

M4 Money Supply (MoM) (Mar) decreased from 1.0% to 0.1%

Mortgage Approvals (Mar) decreased from 70.97K to 70.69K

Mortgage Lending (Mar) increased from 4.56B to 6.97B

Net Lending to Individuals increased from 6.1B to 8.3B

Norway:

House Price Index (YoY) (Apr) remain the same at 6.20%

Euro Zone:

Retail Sales (MoM) (Mar) decreased from 0.4% to -0.4%

Retail Sales (YoY) (Mar) decreased from 5.2% to 0.8%

Markit Composite PMI (Apr) increased from 54.9 to 55.8

Services PMI (Apr) increased from 55.6 to 57.7

 

US/AMERICAS:

Half a percentage point – the news the markets have been waiting on all week from the Federal Reserve. In the most hawkish move in 20 years, members of the FOMC voted to raise the benchmark to 0.75-1%. Fed Chairman Jerome Powell noted that controlling inflation is of the upmost concern.  “Inflation is much too high and we understand the hardship it is causing, we’re moving expeditiously to bring it back down,” Powell said. The central bank will also eventually reduce its bond holdings by $95 billion a month. Powell indicated a 50 basis point hike is on the table for the next meeting, but he does not foresee rates rising beyond that level in June. “The American economy is very strong and well-positioned to handle tighter monetary policy,” he added.

US Market Closings:

  • Dow advanced 932.93 points or 2.82% to 34,061.72
  • S&P 500 advanced 124.91 points or 2.99% to 4,300.39
  • Nasdaq advanced 401.1 points or 3.19% to 12,954.86
  • Russell 2000 advanced 51.07 points or 2.69% to 1,949.92

 

Canada Market Closings:

  • TSX Composite advanced 279.67 points or 1.34% to 21,184.95
  • TSX 60 advanced 14.72 points or 1.16% to 1,281.56

 

Brazil Market Closing:

  • Bovespa advanced 1,815.65 points or 1.7% to 108,343.74

 

 

ENERGY:

 

The oil markets had a green day today:

 

  • Crude Oil increased 5.35 USD/BBL or 5.22% to 107.760
  • Brent increased 5.13 USD/BBL or 4.89% to 110.10
  • Natural gas increased 0.446 USD/MMBtu or 5.61% to 8.3990
  • Gasoline increased 0.1456 USD/GAL or 4.16% to 3.6468
  • Heating oil increased 0.0887 USD/GAL or 2.17% to 4.1714

 

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

 

  • Top commodity gainers: Coal (8.41%) and Natural Gas (5.61%), Crude Oil (5.22%), Brent (4.89%)
  • Top commodity losers: Lumber(-3.78%), Live Cattle (-0.30%), Corn (-0.47%) and Silver (-1.09%)

 

The above data was collected around 14:03 EST on Wednesday

 

BONDS:

 

Japan 0.2250%(+0.8bp), US 2’s 2.80% (+0.017%), US 10’s 2.9656% (-1.34bps); US 30’s 3.03% (+0.017%), Bunds 0.968% (+1.4bp), France 1.494% (+1.6bp), Italy 2.9610% (+9.1bp), Turkey 20.27% (+35bp), Greece 3.425% (+5.1bp), Portugal 2.12% (+5.8bp); Spain 2.09% (+6.6bp) and UK Gilts 1.9690% (+1.2bp).

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