Market Talk – May 20, 2021

Posted May 20, 2021 by Martin Armstrong |

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ASIA:

Indian refiners and at least one European refiner is re-evaluating their crude purchases to make room for Iranian oil in the second half of this year, anticipating that U.S. sanctions will be lifted, company officials and trading sources said. At least one European refiner has held in-depth discussions with Iran’s state oil firm NIOC on resuming purchases and Indian refiners say they plan to reduce spot purchases to make way for Iranian contract barrels.

The major Asian stock markets had a mixed day today:

NIKKEI 225 increased 53.80 points or 0.19% to 28,098.25

Shanghai decreased 4.02 points or -0.11% to 3,506.94

Hang Seng decreased 143.52 points or -0.50% to 28,450.29

ASX 200 increased 87.90 points or 1.27% to 7,019.60

Kospi decreased 10.77 points or -0.34% to 3,162.28

SENSEX decreased 337.78 points or -0.68% to 49,564.86

Nifty50 decreased 124.10 points or -0.83% to 14,906.05

The major Asian currency markets had a mixed day today:

AUDUSD increased 0.00552 or 0.71% to 0.77765

NZDUSD increased 0.00467 or 0.65% to 0.72086

USDJPY decreased 0.5 or -0.46% to 108.77

USDCNY decreased 0.00839 or -0.13% to 6.43181

Precious Metals:

Gold increased 9.97 USD/t oz. or 0.53% to 1,879.54
Silver increased 0.15 USD/t. oz or 0.54% to 27.900

Some economic news from last night:

China:

PBoC Loan Prime Rate remain the same at 3.85%

Japan:

Reuters Tankan Index (May) increased from 13 to 21

Adjusted Trade Balance decreased from 0.30T to 0.07T

Core Machinery Orders (MoM) (Mar) increased from -8.5% to 3.7%

Core Machinery Orders (YoY) (Mar) increased from -7.1% to -2.0%

Exports (YoY) (Apr) increased from 16.1% to 38.0%

Foreign Bonds Buying increased from -72.2B to 600.2B

Foreign Investments in Japanese Stocks decreased from 144.7B to -471.4B

Imports (YoY) (Apr) increased from 5.8% to 12.8%

Trade Balance (Apr) decreased from 662.2B to 255.3B

Australia:

MI Inflation Expectations increased from 3.2% to 3.5%

Employment Change (Apr) decreased from 77.0K to -30.6K

Full Employment Change (Apr) increased from -21.1K to 33.8K

Participation Rate (Apr) decreased from 66.3% to 66.0%

Unemployment Rate (Apr) decreased from 5.7% to 5.5%

New Zealand:

Budget Balance (Aug) increased from -40.177B to -25.277B

Net Debt Forecast (Aug) decreased from 39.70% to 34.00%

Economic Forecast (Aug) increased from -21.576B to -15.127B

Some economic news from today:

Hong Kong:

Unemployment Rate (Apr) decreased from 6.8% to 6.4%

India:

M3 Money Supply decreased from 10.6% to 10.2%

Indonesia:

Export Growth (YoY) (Apr) increased from 30.47% to 51.94%

Import Growth (YoY) (Apr) increased from 25.73% to 29.93%

Trade Balance (Apr) increased from 1.56B to 2.19B

EUROPE/EMEA:

Britain will create a new public railway operator called Great British Railways (GBR) in the biggest reform in a quarter of a century of a network plagued by expensive fares, packed commuter carriages and blunders over timetables. The first stage of the multi-year plan will see flexible season tickets introduced next month to cater for increased working at home that has become the norm for many commuters during the coronavirus lockdown.

The major Europe stock markets had a green day:

CAC 40 increased 81.03 points or 1.29% to 6,343.58

FTSE 100 increased 69.59 points or 1.00% to 7,019.79

DAX 30 increased 256.70 points or 1.70% to 15,370.26

The major Europe currency markets had a mixed day today:

EURUSD increased 0.005 or 0.41% to 1.22224

GBPUSD increased 0.00692 or 0.49% to 1.41786

USDCHF decreased 0.00536 or -0.59% to 0.89860

Some economic news from Europe today:

UK:

CBI Industrial Trends Orders (May) increased from -8 to 17

Germany:

German PPI (YoY) (Apr) increased from 3.7% to 5.2%

German PPI (MoM) (Apr) decreased from 0.9% to 0.8%

Euro Zone:

Current Account (Mar) decreased from 25.9B to 17.8B

Current Account n.s.a. (Mar) increased from 13.3B to 31.0B

Construction Output (MoM) (Mar) increased from -2.03% to 2.73%

US/AMERICAS:

The US workforce is beginning to hear, data from the Labor Department alluded this Thursday, after releasing weekly jobless figures that reflect a pandemic low. A total of 444,000 people filed jobless claims last week. In contrast, claims reached 2.3 million at this time one year ago in the depth of state lockdowns. Continuing claims continued to rise on the other hand, growing by 111,000 last week to 3,75 million.

Google announced plans to launch its first brick and mortar shop in New York City near the company’s office. The store will sell Google phones, tablets, Nest products, wearable fitness devices, and speakers. This is in contrast to most current business strategies that involve moving sales to an online platform. The company hopes that allowing users to test the products live, in-person, will contribute to growing sales. The store is expected to open this summer.

The US Treasury Department is hunting for taxes on cryptocurrencies. Transactions over $10,000, similar to cash, must be reported to the Internal Revenue Service (IRS). “Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the Treasury stated. The IRS believes $600 billion in owed taxes went unreported in 2019 and plans to implement harsher penalties for anyone who evades their tax obligation.

US Market Closings:

Dow advanced 188.11 points or 0.55% to 34,084.15
S&P 500 advanced 43.44 points or 1.06% to 4,159.12
Nasdaq advanced 236 points or 1.77% to 13,535.74
Russell 2000 advanced 14.12 points or 0.64% to 2,207.76

Canada Market Closings:

TSX Composite advanced 125.92 points or 0.65% to 19.542.95
TSX 60 advanced 8.01 points or 0.69% to 1,170.7

Brazil Market Closing:

Bovespa advanced 64.49 points or 0.05% to 122,700.79

ENERGY:

The oil markets had a negative day today:

Crude Oil decreased 0.19 USD/BBL or -0.30% to 63.1700

Brent decreased 0.29 USD/BBL or -0.44% to 66.3700

Natural gas decreased 0.031 USD/MMBtu or -1.05% to 2.9330

Gasoline decreased 0.0121 USD/GAL or -0.58% to 2.0899

Heating oil decreased 0.0093 USD/GAL or -0.46% to 1.9978

Top commodity gainers: Lumber (4.75%), Coal (1.25%), Corn (1.67%) and Orange Juice (2.51%)

Top commodity losers: Bitumen (-1.92%), Palm Oil (-4.49%), Canola (-3.21%), and Natural Gas (-1.05%)

The above data was collected around 12:05 EST on Thursday.

BONDS:

Japan 0.0810%(+1bp), US 2’s 0.1512%(-0.01%), US 10’s 1.6284%(-5.46bps); US 30’s 2.3306%(-0.06%), Bunds -0.113% (-0.3bp), France 0.262% (-2.5bp), Italy 1.0517% (-6.5bp), Turkey 17.45% (+3bp), Greece 1.027% (-5.4bp), Portugal 0.573% (-4.5bp); Spain 0.574% (-3.77bp) and UK Gilts 0.835% (-1.4bp).