Market Talk – March 26, 2021

Posted Mar 26, 2021 by Martin Armstrong |

Spread the love

ASIA:

China is slapping massive duties on wine from Australia for the next five years, a move that threatens to deprive the country’s winemakers of their top export market and escalate a trade dispute. The duties, which range from 116% to 218%, were announced Friday and come after an investigation by Chinese authorities found instances of “dumping and [market] damage.” They take effect on Sunday. Australian Grape & Wine Chief Executive Tony Battaglene told Bloomberg Friday that the industry group will likely recommend making a complaint to the World Trade Organization. China was, until recently, the largest market for exports of Australian wine.

India’s central bank governor said that country’s economic activity should continue “unabated” despite a recent surge in coronavirus infections in many areas. Central bank governor Shaktikanta Das called the increase a “matter of concern” but said India was better prepared to tackle the situation. With a vaccination drive underway, he added, the stringent lockdowns imposed last year might not be needed. Das said he did not foresee any downward revision in the growth forecast of 10.5% for the fiscal year 2021/22, based on preliminary data, but final projections are to be published on April 7 after a review by the monetary policy committee.

The major Asian stock markets had a green day today:

NIKKEI 225 increased 446.82 points or 1.56% to 29,176.70
Shanghai increased 54.74 points or 1.63% to 3,418.33
Hang Seng increased 436.82 points or 1.57% to 28,336.43
ASX 200 increased 33.60 points or 0.49% to 6,824.20
Kospi increased 32.68 points or 1.09% to 3,041.01
SENSEX increased 568.38 points or 1.17% to 49,008.50
Nifty50 increased 182.40 points or 1.27% to 14,507.30

The major Asian currency markets had a mixed day today:

AUDUSD increased 0.00398 or 0.52% to 0.76332
NZDUSD increased 0.0001 or 0.01% to 0.69666
USDJPY increased 0.42 or 0.38% to 109.63
USDCNY decreased 0.00603 or -0.09% to 6.54076

Precious Metals:

Gold increased 6.48 USD/t oz. or 0.38% to 1,733.30
Silver increased 0.04 USD/t. oz or 0.16% to 25.061

Some economic news from last night:

Japan:

Tokyo Core CPI (YoY) (Mar) increased from -0.3% to -0.1%

Tokyo CPI (YoY) (Mar) increased from -0.3% to -0.2%

CPI Tokyo Ex Food and Energy (MoM) (Mar) increased from 0.1% to 0.2%

South Korea:

Consumer Confidence (Mar) increased from 97.4 to 100.5

Some economic news from today:

India:

Bank Loan Growth decreased from 6.6% to 6.5%

Deposit Growth remain the same at 12.1%

FX Reserves, USD increased from 582.04B to 582.27B

Singapore:

Industrial Production (MoM) (Feb) decreased from 4.3% to 1.6%

Industrial Production (YoY) (Feb) increased from 9.2% to 16.4%

EUROPE/EMEA:

Britain’s economy returned to growth in March as businesses stepped up preparations for the easing of lockdown, lifting optimism in the services sector to the highest level since 2004. Reflecting hopes that the Covid vaccine will enable a rapid economic recovery this summer, surveys from IHS Markit and the Chartered Institute of Procurement and Supply (Cips) showed business activity rose at the fastest rate in seven months. Official figures this week signaled the first drop in the unemployment rate in the three months to January, as billions of pounds of government support for businesses and the furlough scheme – extended until the end of September – give firms more confidence to retain staff and hire new workers.

The major Europe stock markets had a green day:

CAC 40 increased 36.40 points or 0.61% to 5,988.81
FTSE 100 increased 65.76 points or 0.99% to 6,740.59
DAX 30 increased 127.58 points or 0.87% to 14,748.94

The major Europe currency markets had a mixed day today:

EURUSD increased 0.00205 or 0.17% to 1.17948
GBPUSD increased 0.00467 or 0.34% to 1.37938
USDCHF decreased 0.0001 or -0.01% to 0.93956

Some economic news from Europe today:

UK:

Core Retail Sales (MoM) (Feb) increased from -8.8% to 2.4%

Core Retail Sales (YoY) (Feb) increased from -3.8% to -1.1%

Retail Sales (YoY) (Feb) increased from -5.9% to -3.7%

Retail Sales (MoM) (Feb) increased from -8.2% to 2.1%

Norway:

Credit Indicator (YoY) (Feb) increased from 4.9% to 5.0%

Unemployment Change (Mar) increased from 128.46K to 129.50K

Unemployment Rate n.s.a. (Mar) decreased from 4.30% to 4.20%

Spain:

Spanish GDP (YoY) (Q4) increased from -9.0% to -8.9%

Spanish GDP (QoQ) (Q4) decreased from 16.4% to 0.0%

Italy:

Italian Business Confidence (Mar) increased from 99.5 to 101.2

Italian Consumer Confidence (Mar) decreased from 101.4 to 100.9

Germany:

German Business Expectations (Mar) increased from 95.0 to 100.4

German Current Assessment (Mar) increased from 90.6 to 93.0

German Ifo Business Climate Index (Mar) increased from 92.7 to 96.6

US/AMERICAS:

Consumer spending, the largest component of the US’ GDP, contracted 1% in February, according to new data by the Commerce Department. The decline was a sharp drop from the 3.4% rebound in February. Analysts are expecting this drop to be temporary, noting that unexpected storms and a delay in stimulus checks impacted much of the country. Additionally, personal income dove to 7.1% after rebounding to 10.1% the month prior. Analysts at Reuters had anticipated income declining 7.3% in February and consumer spending decreasing 0.7%.

According to the finance ministry, the Canadian budget deficit from April to January expanded to C$268.18 billion from C$10.56 billion YoY. Revenues declined 14.% YTD, while expenses soared 83.9% due to coronavirus relief spending. The Canadian economy experienced a C$40.01 billion decline in January 2021 alone, which is in stark contrast to the C$415 million surplus seen in January of last year before the pandemic began. “The unprecedented shift in the government’s financial results reflects the severe deterioration in the economic situation and temporary measures implemented … as a result of the COVID-19 outbreak during this period,” the finance ministry stated this Friday.

In Brazil, foreign direct investment (FDI) expanded to $9 billion during February. This marks the largest monthly jump since August 2019. The country also experienced the ninth consecutive month of positive net portfolio inflows, with investors pouring $3.6 billion into Brazilian bonds and stocks. Analysts had only anticipated a $6.1 billion inflow, and the number is drastically higher YoY when inflows were only $2.6 billion.

US Market Closings:

Dow advanced 452.4 points or 1.39% to 33,072.88
S&P 500 advanced 65.02 points or 1.66% to 3,974.54
Nasdaq advanced 161.04 points or 1.24% to 13,138.72
Russell 2000 advanced 38.36 points or 1.76% to 2,221.48

Canada Market Closings:

TSX Composite advanced 101.48 points or 0.54% to 18,752.58
TSX 60 advanced 5.09 points or 0.46% to 1,120.51

Brazil Market Closing:

Bovespa advanced 1,030.72 points or 0.91% to 114,780.62

ENERGY:

The oil markets had a mixed day today:

Crude Oil increased 2.61 USD/BBL or 4.46% to 61.1700
Brent increased 2.72 USD/BBL or 4.39% to 64.6700
Natural gas decreased 0.001 USD/MMBtu or -0.04% to 2.5690
Gasoline increased 0.0427 USD/GAL or 2.22% to 1.9636
Heating oil increased 0.0677 USD/GAL or 3.87% to 1.8155

Top commodity gainers: Crude Oil (4.46%), Brent (4.39%), Heating Oil (3.87%) and Ethanol (3.33%)
Top commodity losers: Palm Oil (-4.92 %), Rubber (-4.13%), Lumber (-1.59%), and Canola (-3.84%)

The above data was collected around 13:43 EST on Friday.

BONDS:

Japan 0.08%(+0bp), US 2’s 0.14%(+0.002%), US 10’s 1.66%(+4bps); US 30’s 2.37%(+0.033%), Bunds -0.38% (+4bp), France -0.13% (+1bp), Italy 0.63% (+6bp), Turkey 17.67% (+21bp), Greece 0.87% (+1bp), Portugal 0.19% (+4bp); Spain 0.30% (+3bp) and UK Gilts 0.76% (+3bp).