Market Talk – April 22, 2021

Posted Apr 22, 2021 by Martin Armstrong |

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ASIA:

India has raised concerns over United States putting it on a monitoring list of currency manipulators. Last week, the U.S. Treasury Department put India along with 10 other economies including Singapore, Thailand and Mexico on the “Monitoring List” that it said required close attention to their currency practices. India’s trade ministry official said India’s trade surplus with the United States had gone up by nearly $5 billion in the financial year 2020/21 that ended on March 31. India’s bilateral trade surplus in goods with the United States totaled $24 billion in 2020, along with a services trade surplus of $8 billion, the U.S. report said. Some economists said the latest move by the United States to put India on the watchlist may discourage the central bank from aggressive intervention in the foreign exchange market.

Indian refiners’ crude oil processing rose in March from the previous month as fuel demand recovered, although throughput remained marginally lower than a year earlier, highlighting the pandemic’s toll on economic activity. Refineries’ crude oil throughput rose 1.8% month-on-month to 4.96 million barrels per day (20.99 million tonnes), provisional government data showed on Tuesday. But it fell 1% compared to March last year. India’s fuel consumption staged a rebound in March, jumping to its highest level since December 2019 as the economy continued to open up.

The major Asian stock markets had a mixed day today:

NIKKEI 225 increased 679.62 points or 2.38% to 29,188.17
Shanghai decreased 7.82 points or -0.23% to 3,465.11
Hang Seng increased 133.42 points or 0.47% to 28,755.34
ASX 200 increased 57.90 points or 0.83% to 7,055.40
Kospi increased 5.86 points or 0.18% to 3,177.52
SENSEX increased 374.87 points or 0.79% to 48,080.67
Nifty50 increased 109.75 points or 0.77% to 14,406.15

The major Asian currency markets had a mixed day today:

AUDUSD decreased 0.00308 or -0.40% to 0.77236
NZDUSD decreased 0.00351 or -0.49% to 0.71692
USDJPY increased 0.11 or 0.10% to 108.14
USDCNY decreased 0.00121 or -0.02% to 6.49047

Precious Metals:

Gold decreased 11.38 USD/t oz. or -0.63% to 1,782.08
Silver decreased 0.406 USD/t. oz or -1.53% to 26.169

Some economic news from last night:

Japan:

Foreign Bonds Buying decreased from 1,715.5B to 906.5B

Foreign Investments in Japanese Stocks decreased from 641.1B to 286.3B

Australia:

NAB Quarterly Business Confidence increased from 15 to 17

Some economic news from today:

Hong Kong:

Unemployment Rate (Mar) decreased from 7.2% to 6.8%

EUROPE/EMEA:

The UK was not removed from ban on travel from US in its latest review by Biden Administration. In the latest review the U.S. raised the travel advisory to the UK to a level 4, the highest, meaning people should not travel. The Biden administration has also added 130 other countries to the list (including many countries in Europe), in line with an increase in perceived epidemiological risks, assessed by the CDC. The news is a blow to airlines who had been pushing both governments to open up the U.S./U.K. travel corridor as soon as May. The London–New York route is one of the most lucrative and a recent report suggested that delaying the opening of travel between the two countries until September could cost £55.7 ($76) billion in lost trade and £3 ($4.1) billion in tourism GDP. It had been reported that President Biden was considering May to remove the travel ban on the back of a strong vaccination rollout across both countries.

The major Europe stock markets had a green day:

CAC 40 increased 56.73 points or 0.91% to 6,267.28
FTSE 100 increased 42.95 points or 0.62% to 6,938.24
DAX 30 increased 124.55 points or 0.82% to 15,320.52

The major Europe currency markets had a mixed day today:

EURUSD decreased 0.0019 or -0.16% to 1.20182
GBPUSD decreased 0.00758 or -0.54% to 1.38545
USDCHF increased 0.00131 or 0.14% to 0.91801

Some economic news from Europe today:

Swiss:

Trade Balance (Mar) increased from 3.674B to 5.816B

Norway:

Industrial Confidence (Q1) increased from 3.8 to 8.2

France:

French Business Survey (Apr) increased from 99 to 104

Italy:

Italian Industrial Sales (MoM) (Feb) decreased from 2.60% to 0.20%

Italian Industrial Sales (YoY) (Feb) increased from -1.60% to 0.90%

UK:

CBI Industrial Trends Orders (Apr) decreased from -5 to -8

Euro Zone:

Deposit Facility Rate (Apr) remain the same at -0.50%

ECB Marginal Lending Facility remain the same at 0.25%

ECB Interest Rate Decision (Apr) remain the same at 0.00%

Consumer Confidence (Apr) increased from -10.8 to -8.1

US/AMERICAS:

President Biden proposed a capital gains tax increase, disrupting the markets this Thursday. The president would like to increase the tax from 20% to 29.6% for anyone earning over $1 million.

The Labor Department released optimistic data this Thursday showing signs of a labor recover in the US. First time weekly unemployment claims fell to 547,000, beating analysts’ expectations of 603,000. This parts a post-pandemic low, beating last week’s figure of 576,000. Continuing jobless claims declined by 34,000 to 3.67 million. National unemployment remains at 6%, well above the 50-year pre-pandemic low of 3.5%, but a stark improvement from the pandemic high of 14.7%.

Mexico’s annual inflation reached a three-year-high, soaring past the central bank’s target, the national statics agency (INEGI) reported. Inflation in the beginning of April hit 6.05%, surpassing Reuters’ estimates of 5.84%. The Bank of Mexico had set a target inflation rate of 3%, permitting a point percentage point tolerance range. Bank of Mexico Governor Alejandro Diaz de Leon stated that the bank anticipated a temporary rise in inflation. The central bank will deliberate on policy again on May 13.

US Market Closings:

Dow declined 321.41 points or -0.94% to 33,815.9
S&P 500 declined 38.44 points or -0.92% to 4,134.98
Nasdaq declined 131.8 points or -0.94% to 13,818.41
Russell 2000 declined 7.01 points or -0.31% to 2,232.61

Canada Market Closings:

TSX Composite declined 111.61 points or -0.58% to 19,031.64
TSX 60 declined 7.25 points or -0.64% to 1,132.47

Brazil Market Closing:

Bovespa declined 690.51 points or -0.58% to 119,371.48

ENERGY:

The oil markets had a mixed day today:

Crude Oil increased 0.12 USD/BBL or 0.20% to 61.4700
Brent increased 0.11 USD/BBL or 0.17% to 65.4300
Natural gas increased 0.073 USD/MMBtu or 2.71% to 2.7650
Gasoline decreased 0.0044 USD/GAL or -0.22% to 1.9790
Heating oil increased 0.0048 USD/GAL or 0.26% to 1.8585

Top commodity gainers: Wheat (4.42%), Natural Gas (2.71%), Soybeans (2.69%) and Corn (4.00%)
Top commodity losers: Bitumen (-2.12%), Feeder Cattle (-1.54%), Palladium (-1.57%), and Silver (-1.53%)

The above data was collected around 12:02 EST on Thursday.

BONDS:

Japan 0.0650%(-0bp), US 2’s 0.16%(+0.006%), US 10’s 1.5856%(+2.16bps); US 30’s 2.2703%(+0.01%), Bunds -0.2760% (-2bp), France -0.0274% (-1bp), Italy 0.7570% (+0.1bp), Turkey 17.66% (+0bp), Greece 0.9060% (+0.6bp), Portugal 0.412% (+1bp); Spain 0.396% (+0.07bp) and UK Gilts 0.74% (-0.1bp).