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Market Talk – May 6, 2022


ASIA:

Activity in India’s dominant services sector grew at its fastest pace in five months in April on strong demand, prompting firms to add jobs for the first time since November, a private survey showed, but sky-rocketing inflation remained a major concern. The S&P Global India Services Purchasing Managers’ Index rose to 57.9 in April from 53.6 in March, its highest since November and surpassing the 54.0 estimate in a Reuters poll. While the index remained above the 50-mark separating growth from contraction for a ninth straight month, it was the best start to a fiscal year for the sector since 2011/12.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 increased 185.03 points or 0.69% to 27,003.56
  • Shanghai decreased 66.20 points or -2.16% to 3,001.56
  • Hang Seng decreased 791.44 points or -3.81% to 20,001.96
  • ASX 200 decreased 159.10 points or -2.16% to 7,205.60
  • Kospi decreased 33.06 points or -1.23% to 2,644.51
  • SENSEX decreased 866.65 points or -1.56% to 54,835.58
  • Nifty50 decreased 271.40 points or -1.63% to 16,411.25

 

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00185 or -0.26% to 0.71032
  • NZDUSD increased 0.00041 or 0.06% to 0.64336
  • USDJPY increased 0.186 or 0.14% to 130.414
  • USDCNY increased 0.02064 or 0.31% to 6.70683

 

Precious Metals:

  • Gold increased 11.52 USD/t oz. or 0.61% to 1,888.36
  • Silver decreased 0.050 USD/t. oz or -0.22% to 22.452

 

Some economic news from last night:

Japan:

Tokyo Core CPI (YoY) (Apr) increased from 0.8% to 1.9%

Tokyo CPI (YoY) (Apr) increased from 1.3% to 2.5%

CPI Tokyo Ex Food and Energy (MoM) (Apr) increased from 0.2% to 0.4%

Monetary Base (YoY) decreased from 7.9% to 6.6%

Australia:

AIG Services Index (Apr) increased from 56.2 to 57.8

 

Some economic news from today

India:

Bank Loan Growth decreased from 11.2% to 11.1%

Deposit Growth decreased from 10.1% to 9.8%

FX Reserves, USD decreased from 600.42B to 597.73B

Hong Kong:

Foreign Reserves (USD) (Apr) decreased from 481.60B to 465.70B

 

EUROPE/EMEA:

Britain is facing the risk of stagflation after the Bank of England warned that surging energy prices will drive inflation to 10% by the end of the year as the economy stumbles. The pound plunged to its lowest since June 2020 as the BoE hiked borrowing costs to a 13-year high. Sterling has lost 2.5 cents since the start of the day, down 2%, on track for the worst day since March 2020. The BoE predicted that the economy could contract sharply in the last quarter of this year when the energy price cap is lifted, as the cost-of-living crisis hit household spending.

French economic growth fell to zero in the first quarter of the year as households reduced their consumption due to rising inflation and the war in Ukraine, data showed on Friday. The zero-growth result was weaker than the INSEE statistics agency’s pre-war forecast of a 0.3 percent expansion, underlying the economic difficulties faced across Europe. The French annual inflation rate also accelerated to 4.8 percent in April, up from 4.5 percent the month before, INSEE said in a separate statement. INSEE said there had been a 1.3 percent fall in French consumer spending in the first quarter – falling short of economists’ expectations. The French government implemented a cut of 15 euro cents per liter at the pump for vehicle owners in April, which INSEE said would have an impact on the headline inflation rate.

 

The major Europe stock markets had a negative day:

  • CAC 40 decreased 110.04 points or -1.73% to 6,258.36
  • FTSE 100 decreased 115.33 points or -1.54% to 7,387.94
  • DAX 30 decreased 228.23 points or -1.64% to 13,674.29

 

 

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00266 or 0.25% to 1.05671
  • GBPUSD decreased 0.00121 or -0.10% to 1.23529
  • USDCHF increased 0.00204 or 0.21% to 0.98678

 

Some economic news from Europe today:

Swiss:

Unemployment Rate n.s.a. (Apr) decreased from 2.4% to 2.3%

Unemployment Rate s.a. (Apr) remain the same at 2.2%

UK:

Halifax House Price Index (MoM) (Apr) decreased from 1.5% to 1.1%

Halifax House Price Index (YoY) decreased from 11.0% to 10.8%

Construction PMI (Apr) decreased from 59.1 to 58.2

Germany:

German Industrial Production (MoM) (Mar) decreased from 0.1% to -3.9%

France:

French Non-Farm Payrolls (QoQ) (Q1) decreased from 0.4% to 0.3%

French Reserve Assets Total (Apr) increased from 235,521.0M to 245,991.0M

Spain:

Spanish Industrial Production (YoY) (Mar) decreased from 2.8% to 0.1%

Italy:

Italian Retail Sales (MoM) (Mar) decreased from 0.7% to -0.5%

Italian Retail Sales (YoY) (Mar) increased from 4.6% to 5.6%

US/AMERICAS:             

The April jobs report is in and shows an increasingly tight labor market. Nonfarm payrolls advanced by 428,000 last month, surpassing estimates by 28,000, according to the Bureau of Labor Statistics. The unemployment rate now sits at 3.6%. Hourly earnings rose 0.3% for the month, marking a 5.5% YoY advancement, but is still well beneath the inflation rate. Labor force participation fell 0.2 percentage points to 62.2%.

The leisure and hospitality sector saw the largest growth after adding 78,000 positions. Manufacturing and warehousing advanced by 55,000 and 52,000 respectively. Professional services saw an increase of 41,000, financial services rose by 35,000, and the health care industry added an additional 34,000 positions.

US Market Closings:

  • Dow declined 98.6 points or -0.3% to 32,899.37
  • S&P 500 declined 23.53 points or -0.57% to 4,123.34
  • Nasdaq declined 173.03 points or -1.4% to 12,144.66
  • Russell 2000 declined 31.58 points or -1.69% to 1,839.59

 

Canada Market Closings:

  • TSX Composite declined 62.89 points or -0.3% to 20,633.28
  • TSX 60 declined 2.69 points or -0.21% to 1,250.59

 

Brazil Market Closing:

  • Bovespa declined 169.46 points or -0.16% to 105,134.73

 

ENERGY:

 

The oil markets had a mixed day today:

 

  • Crude Oil increased 1.54 USD/BBL or 1.42% to 109.800
  • Brent increased 1.41 USD/BBL or 1.27% to 112.31
  • Natural gas decreased 0.604 USD/MMBtu or -6.88% to 8.1790
  • Gasoline increased 0.1035 USD/GAL or 2.83% to 3.7622
  • Heating oil decreased 0.0419 USD/GAL or -1.04% to 3.9994

 

The above data was collected around 13:20 EST on Friday

 

  • Top commodity gainers: Gasoline (2.83%) and Brent (1.27%), Crude Oil (1.42%), Sugar (1.70%)
  • Top commodity losers: Palladium(-6.65%), Coffee (-3.18%), Natural Gas (-6.88%) and Palm Oil (-5.07%)

 

The above data was collected around 13:30 EST on Friday.

 

BONDS:

 

Japan 0.250%(+2.1bp), US 2’s 2.69% (-0.022%), US 10’s 3.1106% (+7.6bps); US 30’s 3.20% (+0.081%), Bunds 1.146% (+9.8bp), France 1.67% (+10bp), Italy 3.150% (+12.5bp), Turkey 20.82% (+11bp), Greece 3.595% (+20.3bp), Portugal 2.288% (+10.2bp); Spain 2.281% (+13.4bp) and UK Gilts 2.0080% (+4.4bp).

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