Market Talk – March 16, 2021

Posted Mar 16, 2021 by Martin Armstrong |

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ASIA:

India’s trade deficit in goods widened to $12.62 billion in February from $10.16 billion during the same period a year earlier, revised data released by the government on Monday showed. Merchandise exports rose 0.67% in February from a year earlier to $27.93 billion, while imports were up 6.96% to $40.54 billion, the data showed.

The United States overtook Saudi Arabia as India’s second-biggest oil supplier after Iraq last month, as refiners boosted cheaper U.S. crude purchases to record levels to offset OPEC+ supply cuts, Reuters reported. India’s imports from the United States — the world’s top producer — rose 48% to a record 545,300 bpd in February from the prior month, accounting for 14% of India’s overall imports last month, the data obtained by Reuters showed. In contrast, February imports from Saudi Arabia fell by 42% from January to a decade low of 445,200 bpd, the data showed. Saudi Arabia, which has consistently been one of India’s top two suppliers, slipped to No. 4 for the first time since at least January 2006. The switch in supplies, triggered by lower US crude demand, coincided with Saudi Arabia’s voluntary extra 1 million barrel per day (bpd) output cut, on top of an agreement by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to maintain lower production.

The major Asian stock markets had a mixed day today:

NIKKEI 225 increased 154.12 points or 0.52% to 29,921.09
Shanghai increased 26.79 points or 0.78% to 3,446.73
Hang Seng increased 193.93 points or 0.67% to 29,027.69
ASX 200 increased 54.10 points or 0.80% to 6,827.10
Kospi increased 21.46 points or 0.70% to 3,067.17
SENSEX decreased 31.12 points or -0.06% to 50,363.96
Nifty50 decreased 19.05 points or -0.13% to 14,910.45

The major Asian currency markets had a mixed day today:

AUDUSD increased 0.00003 or 0.00% to 0.77462
NZDUSD decreased 0.00079 or -0.11% to 0.71922
USDJPY decreased 0.14 or -0.13% to 108.99
USDCNY increased 0.0029 or 0.04% to 6.50125

Precious Metals:

Gold decreased 0.40 USD/t oz. or -0.02% to 1,731.44
Silver decreased 0.32 USD/t. oz or -1.23% to 25.937

Some economic news from last night:

South Korea:

Export Price Index (YoY) (Feb) increased from -1.9% to 0.2%

Import Price Index (YoY) (Feb) increased from -5.8% to -0.8%

Australia:

House Price Index (QoQ) (Q4) increased from 0.8% to 3.0%

New Zealand：

Credit Card Spending (YoY) decreased from -5.2% to -6.7%

Singapore:

Unemployment Rate (Q4) remain the same at 3.3%

Some economic news from today:

Japan:

Capacity Utilization (MoM) (Jan) increased from 0.8% to 4.7%

Industrial Production (MoM) (Jan) increased from 1.0% to 4.3%

Hong Kong:

Unemployment Rate (Feb) increased from 7.0% to 7.2%

New Zealand:

GlobalDairyTrade Price Index decreased from 15.0% to -3.8%

EUROPE/EMEA:

The UK economy contracted -2.9% in January from a month earlier, as the government rolled out a third lockdown to combat the rise in coronavirus cases. Data from the Office for National Statistics on 11 March showed the economy was 9.2% smaller than in January 2020. The Bank of England last month predicted a 4% contraction for the first quarter of 2021, due to lockdown restrictions which continue to suppress business activity, along with post-Brexit disruption resulting from new trading rules.

Germany’s second lockdown has stopped the recovery in Europe’s largest economy, but recent data for the first quarter suggest there won’t be a “drastic plunge” in gross domestic product as seen during the first lockdown last year, the statistics office said on Tuesday.

The European Bank for Reconstruction and Development (EBRD) expects 3% growth for Poland in 2021, which would make Poland the only EU member to reach its pre-crisis level by the end of 2021. The country has grown from 49% to 70% of the EU’s average economic wages since joining the EU in 2004 and in November Poland was again number three in the EU in terms of industrial production growth.

The major Europe stock markets had a green day:

CAC 40 increased 19.46 points or 0.32% to 6,055.43
FTSE 100 increased 53.91 points or 0.80% to 6,803.61
DAX 30 increased 96.16 points or 0.66% to 14,557.58

The major Europe currency markets had a negative day today:

EURUSD decreased 0.00234 or -0.20% to 1.19029
GBPUSD decreased 0.00009 or -0.01% to 1.38960
USDCHF decreased 0.00286 or -0.31% to 0.92480

Some economic news from Europe today:

France:

French CPI (MoM) (Feb) decreased from 0.2% to 0.0%

French CPI (YoY) remain the same at 0.6%

French HICP (YoY) (Feb) remain the same at 0.8%

French HICP (MoM) (Feb) decreased from 0.3% to 0.0%

Italy:

Italian CPI (MoM) (Feb) decreased from 0.7% to 0.1%

Italian CPI (YoY) (Feb) increased from 0.4% to 0.6%

Italian CPI Ex Tobacco (MoM) (Feb) increased from 0.2% to 0.5%

Italian HICP (MoM) (Feb) increased from -0.9% to -0.2%

Italian HICP (YoY) (Feb) increased from 0.7% to 1.0%

Germany:

German ZEW Current Conditions (Mar) increased from -67.2 to -61.0

German ZEW Economic Sentiment (Mar) increased from 71.2 to 76.6

Euro Zone:

ZEW Economic Sentiment (Mar) increased from 69.6 to 74.0

US/AMERICAS:

US lawmakers are looking to add $12 billion to the foreign defense budget, citing that it would help the US to compete with China and prevent climate change. Senator Murphy said it is “mind-boggling” that the US Defense Department received increased funding every year while other “vital national security agencies” do not. According to Reuters, the US currently spends $740 billion on its military budget.

Kim Yo Jong, the sister of North Korean dictator Kim Jung Un, sent a warning to the Biden administration this Tuesday in response to a joint US-South Korea military exercise. “We take this opportunity to warn the new U.S. administration trying hard to give off powder smell in our land,” Kim Yo Jong said in a statement, “If it [the U.S.] wants to sleep in peace for coming four years, it had better refrain from causing a stink at its first step.”

Brazil’s economy added a record number of jobs in January, according to the Economy Ministry. A total of 260,353 jobs were created in Brazil, doubling analysts’ expectations. The manufacturing sector saw the biggest boost with 90,431 new jobs, followed by the service sector that added 83,686, and construction which experienced a 43,498 increase.

US Market Closings:

Dow declined 127.51 points or -0.39% to 32,825.95
S&P 500 declined 6.23 points or -0.16% to 3,962.71
Nasdaq advanced 11.86 points or 0.09% to 13,471.57
Russell 2000 declined 40.65 points or -1.72% to 2,319.52

Canada Market Closings:

TSX Composite declined 80.74 points or -0.43% to 18,874.01
TSX 60 declined 4.34 points or -0.38% to 1,123.74

Brazil Market Closing:

Bovespa declined 831.96 points or -0.72% to 114,018.78

ENERGY:

The oil markets had a mixed day today:

Crude Oil decreased 0.74 USD/BBL or -1.13% to 64.6500
Brent decreased 0.61 USD/BBL or -0.89% to 68.2700
Natural gas increased 0.07 USD/MMBtu or 2.98% to 2.5580
Gasoline decreased 0.01 USD/GAL or -0.24% to 2.0996
Heating oil decreased 0.02 USD/GAL or -0.91% to 1.9312
Top commodity gainers: Natural Gas (2.98%), Orange Juice (1.75%), Lean Hogs (2.43%) and Palladium (4.48%)
Top commodity losers: Bitumen (-3.19%), Lumber (-19.42%), Cocoa (-27.20%), and Palm Oil (-2.34%)

The above data was collected around 16:29 EST on Tuesday.

BONDS:

Japan 0.10%(-1bp), US 2’s 0.15%(-0.002%), US 10’s 1.62%(+2bps); US 30’s 2.38%(+0.011%), Bunds -0.33% (+4bp), France -0.09% (+0bp), Italy 0.62% (+2bp), Turkey 13.84% (-4bp), Greece 0.87% (+5bp), Portugal 0.20% (+2bp); Spain 0.32% (+2bp) and UK Gilts 0.79% (-1bp).