Market Talk – February 11, 2021

Posted Feb 11, 2021 by Martin Armstrong |

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ASIA:

China’s National Radio and Television Administration (NRTA) announced BBC World News has been barred from airing in China saying some BBC’s reports on China infringed the principles of truthfulness and impartiality in journalism. Chinese observers said the BBC has turned into “a rumor mill” that deliberately throws mud at China, and the decision to suspend its broadcast sends a clear message that China doesn’t accept fake news.

India’s gold imports in January surged 72% from a year earlier, as a correction in prices from a record high drew retail buyers and jewelers. The world’s second-biggest consumer of the gold imported around 62 tonnes of it in January, up from 36.5 tonnes a year ago, Reuters reported.

The major Asian stock markets had a mixed day today:

NIKKEI 225 closed
Shanghai closed
Hang Seng increased 134.85 points or 0.45% to 30,173.57
ASX 200 decreased 6.80 points or -0.10% to 6,850.10
Kospi closed
SENSEX increased 222.13 points or 0.43% to 51,531.52
Nifty50 increased 66.80 points or 0.44% to 15,173.30

The major Asian currency markets had a mixed day today:

AUDUSD increased 0.00269 or 0.35% to 0.77482
NZDUSD increased 0.00117 or 0.16% to 0.72262
USDJPY increased 0.15 or 0.15% to 104.79
USDCNY decreased 0.00624 or -0.10% to 6.42251

Precious Metals:

Gold decreased 16.54 USD/t oz. or -0.90% to 1,825.68
Silver decreased 0.08 USD/t. oz or -0.30% to 26.913

Some economic news from last night:

Australia:

MI Inflation Expectations increased from 3.4% to 3.7%

New Zealand:

Electronic Card Retail Sales (MoM) (Jan) increased from -0.6% to -0.4%

Electronic Card Retail Sales (YoY) (Jan) decreased from 3.5% to 1.9%

Some economic news from today:

M3 Money Supply decreased from 12.5% to 12.1%

EUROPE/EMEA:

France’s central bank governor has called for a “decarbonization” of the multitrillion-euro holdings of corporate bonds at the European Central Bank, intensifying the debate on how far monetary policy should go in tackling climate change. François Villeroy de Galhau said the ECB should adjust the amount of corporate bonds it buys and the value of the collateral it accepts depending on how aligned companies are to achieving the goals of the international climate agreement to limit global warming. Christine Lagarde, the ECB’s president, has pledged to make tackling climate change a major part of the central bank’s strategy review, which is due to be completed by September.

The major Europe stock markets had a mixed day:

CAC 40 decreased 0.98 points or -0.02% to 5,669.82
FTSE 100 increased 4.36 points or 0.07% to 6,528.72
DAX 30 increased 107.94 points or 0.77% to 14,040.91

The major Europe currency markets had a mixed day today:

EURUSD increased 0.00085 or 0.07% to 1.21263
GBPUSD decreased 0.00218 or -0.16% to 1.38090
USDCHF increased 0.0003 or 0.03% to 0.89067

Some economic news from Europe today:

UK:

Thomson Reuters IPSOS PCSI (Feb) increased from 43.1 to 45.9

RICS House Price Balance (Jan) decreased from 63% to 50%

Germany：

German WPI (YoY) (Jan) increased from -1.2% to 0.0%

German WPI (MoM) (Jan) increased from 0.6% to 2.1%

Germany Thomson Reuters IPSOS PCSI (Feb) increased from 50.87 to 51.31

France:

France Thomson Reuters IPSOS PCSI (Feb) decreased from 40.38 to 39.75

Italy:

Italy Thomson Reuters IPSOS PCSI (Feb) decreased from 38.73 to 38.52

US/AMERICAS:

Millions of Americans are at risk of losing unemployment benefits in April as Congress continues to debate the next stimulus package budget. According to the Century Foundation, 10.6 million Americans will lose their unemployment benefits by April 11. As Federal Reserve Chairman Jerome Powell noted yesterday, unemployment is one of the biggest concerns for the American economy. Under Biden’s $1.9 trillion package, the unemployed would receive an additional $400 per week. However, some Republicans are concerned this will entice some not to re-enter the workforce as they may be making more through unemployment than they would on their typical salary.

President Joe Biden spoke with China’s Xi Jinping for the first time this Thursday. The call allegedly ran for two hours, with both leaders stating that cooperation is needed to avoid a “disaster,” as Xi stated. Instead of viewing one another as a foe, the two economic powerhouses are ready for diplomatic competition. “They’re investing billions of dollars dealing with a whole range of issues that relate to transportation, the environment and a whole range of other things. We just have to step up,” President Biden stated. However, clashes are almost certain given that the Biden administration stated that China is committing genocide against Uighur Muslims. Hong Kong and Taiwan independence, trade practices, and cyber security are other unresolved hot topic issues that the two nations need to resolve.

Salesforce, the largest employer in San Francisco, announced that the “9-to-5 workday is dead.” The company believes the pandemic acted as a teaching moment that shows how remote work can “create an even better workplace – one that allows us to be more connected to each other, find more balance between work and home, and advance equality.” The company also stated that the decision to allow employees to permanently work remotely will lead to “increased innovation and better outcomes.”

In another blow to Canada’s transportation sector, Bombardier Inc. announced that it will cease Learjet production. This will result in 1,600 job losses, and more cuts are expected as the company scrambles to make up for lost revenue. “Workforce reductions are always very difficult, and we regret seeing talented and dedicated employees leave the company for any reason,” said CEO Éric Marte, “But these reductions are absolutely necessary for us to rebuild our company while we continue to navigate through the pandemic.”

US Market Closings:

Dow declined 7.1 points or -0.02% to 31,430.7
S&P 500 advanced 6.5 points or 0.17% to 3,916.38
Nasdaq advanced 53.24 points or 0.38% to 14,025.77
Russell 2000 advanced 2.88 points or 0.13% to 2,285.32

Canada Market Closings:

TSX Composite declined 64.79 points or -0.35% to 18,392.99
TSX 60 declined 1.49 points or -0.14% to 1,091.04

Brazil Market Closing:

Bovespa advanced 864.5 points or 0.73% to 119,299.83

ENERGY:

The oil markets had a negative day today:

Crude Oil decreased 0.42 USD/BBL or -0.72% to 58.2600
Brent decreased 0.32 USD/BBL or -0.52% to 61.1500
Natural gas decreased 0.039 USD/MMBtu or -1.34% to 2.8720
Gasoline decreased 0.0063 USD/GAL or -0.38% to 1.6471
Heating oil decreased 0.0149 USD/GAL or -0.85% to 1.7461

Top commodity gainers: Lumber (3.37%), Cotton (1.09%), Lithium (3.05%) and Zinc (1.12%)
Top commodity losers: Cocoa (-8.67%), Sugar (-1.44%), Natural Gas (-1.34%), and Palm Oil (-2.04%)

The above data was collected around 13:13 EST on Thursday.

BONDS:

Japan 0.08%(+1bp), US 2’s 0.00%(-0.00%), US 10’s 1.16%(+2bps); US 30’s 2.00%(+0.02%), Bunds -0.44% (+3bp), France -0.22% (-1bp), Italy 0.45% (-6bp), Turkey 12.57% (+2bp), Greece 0.76% (-3bp), Portugal 0.07% (-2bp); Spain 0.13% (-2bp) and UK Gilts 0.47% (-2bp).