Market Talk – June 10, 2021

Posted Jun 10, 2021 by Martin Armstrong |

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ASIA:

Indian economy is expected to expand 8.3 percent in fiscal year 2021-22, a report by World Bank projected on Tuesday. In its latest issue of Global Economic Prospects, the Washington-based global lender said that even though the forecast has been revised up by 2.9 percentage points, its masks significant expected economic damage from the second wave of Covid-19.

Besides, it projected the global economy to grow 5.6 percent this year, up from the 4.1 percent it forecasted in January. It said that Covid vaccinations and stimulus given by various central governments will power the fastest worldwide expansion in nearly five decades.

The major Asian stock markets had a mixed day today:

NIKKEI 225 increased 97.76 points or 0.34% to 28,958.56
Shanghai increased 19.46 points or 0.54% to 3,610.86
Hang Seng decreased 3.75 points or -0.01% to 28,738.88
ASX 200 increased 32.30 points or 0.44% to 7,302.50
Kospi increased 8.46 points or 0.26% to 3,224.64
SENSEX increased 358.83 points or 0.69% to 52,300.47
Nifty50 increased 102.40 points or 0.65% to 15,737.75

The major Asian currency markets had a mixed day today:

AUDUSD increased 0.00280 or 0.37% to 0.77573
NZDUSD increased 0.00280 or 0.39% to 0.72004
USDJPY decreased 0.19500 or -0.18% to 109.44
USDCNY decreased 0.00100 or -0.02% to 6.38732

Precious Metals:

Gold increased 5.52 USD/t oz. or 0.29% to 1,893.82
Silver increased 0.15 USD/t. oz or 0.55% to 27.904

Some economic news from last night:

Japan:

Foreign Bonds Buying increased from -1,089.9B to 665.9B

Foreign Investments in Japanese Stocks decreased from 181.4B to 94.5B

PPI (MoM) (May) decreased from 0.9% to 0.7%

PPI (YoY) (May) increased from 3.8% to 4.9%

Indonesia:

Retail Sales (YoY) (Apr) increased from -14.6% to 15.6%

Australia:

MI Inflation Expectations increased from 3.5% to 4.4%

New Zealand:

Electronic Card Retail Sales (YoY) (May) decreased from 108.7% to 18.1%

Some economic news from today:

China:

M2 Money Stock (YoY) (May) increased from 8.1% to 8.3%

New Loans (May) increased from 1,470.0B to 1,500.0B

Outstanding Loan Growth (YoY) (May) decreased from 12.3% to 12.2%

Chinese Total Social Financing (May) increased from 1,850.0B to 1,920.0B

Australia:

HIA New Home Sales (MoM) increased from -54.4% to 15.2%

EUROPE/EMEA:

President Biden and British Prime Minister Boris Johnson outlined a vision for U.S.-U.K. relations centered on promoting democracy and countering the influence of autocratic states during their first in-person meeting. The two leaders agreed Thursday on a wide-ranging document that charts a path forward from a global pandemic that has killed millions, as the virus continues spreading in some parts of the world. It calls for investments in science and technology, renewed efforts to address climate change and improved defenses against global health threats.

The major Europe stock markets had a mixed day:

CAC 40 decreased 16.96 points or -0.26% to 6,546.49
FTSE 100 increased 7.17 points or 0.10% to 7,088.18
DAX 30 decreased 9.92 points or -0.06% to 15,571.22

The major Europe currency markets had a mixed day today:

EURUSD decreased 0.00030 or -0.02% to 1.21756
GBPUSD increased 0.00560 or 0.40% to 1.41665
USDCHF decreased 0.00090 or -0.10% to 0.89496

Some economic news from Europe today:

UK:

RICS House Price Balance (May) increased from 76% to 83%

Thomson Reuters IPSOS PCSI (Jun) decreased from 55.8 to 55.7

France:

France Thomson Reuters IPSOS PCSI (Jun) increased from 45.44 to 47.25

French Non-Farm Payrolls (QoQ) (Q1) remain the same at 0.3%

French Industrial Production (MoM) (Apr) decreased from 1.0% to -0.1%

Norway:

Core CPI YTD (May) decreased from 2.0% to 1.5%

Core Inflation (MoM) (May) decreased from 0.4% to -0.4%

CPI (YoY) (May) decreased from 3.0% to 2.7%

CPI (MoM) (May) decreased from 0.3% to -0.1%

PPI (YoY) (May) increased from 22.5% to 29.4%

Italy:

Italian Industrial Production (MoM) (Apr) increased from 0.3% to 1.8%

Italian Industrial Production (YoY) (Apr) increased from 38.4% to 79.5%

Italy Thomson Reuters IPSOS PCSI (Jun) increased from 42.12 to 46.25

Germany:

Germany Thomson Reuters IPSOS PCSI (Jun) increased from 54.11 to 57.73

Euro Zone:

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

ECB Marginal Lending Facility remain the same at 0.25%

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

US/AMERICAS:

The US consumer price index rose at its fastest pace since 2008, according to data released by the Labor Department this Thursday. Prices in May rose 5% YoY, exceeding estimates of 4.7%. The last spike of this magnitude in the CPI occurred prior to the Great Recession in August 2008. The Federal Open Market Committee, the decision-making branch of the Federal Reserve, is set to meet next week to discuss monetary policy. However, most believe that the CPI spike will leave the Fed undeterred as they have previously stated they would allow inflation to run above target for a short period.

Despite officials urging teens to take the coronavirus vaccination, the Centers for Disease Control and Prevention (CDC) is now warning that there is an increased risk for heart inflammation in 16 to 24-year-olds. As of May 31, the CDC noted 275 cases of heart inflammation in that demographic. Symptoms usually develop within two to three days of receiving the second dosage, with men being more prone to the potentially fatal side effect. The news comes on the same day that Dr. Paul Offit, a top advisor to the Food and Drug Administration on children’s vaccines, voiced his urgency for all children to be vaccinated.

TC Energy Corp is abandoning plans for the Keystone XL pipeline after a 10+ year battle to build the lucrative pipeline that was designed to carry oil from Canada to the US. President Biden suspended permits for the pipeline on his first day of office, while simultaneously reentering the Paris climate agreement. TC Energy initially warned that suspending the project would lead to thousands of workers losing their jobs. TC Energy took a C$2.2 billion loss on the canceled pipeline last month, but announced plans to officially abandon the project this week. “We remain disappointed and frustrated with the circumstances surrounding the Keystone XL project,“ Alberta Premier Jason Kenney stated, ”including the cancellation of the presidential permit for the pipeline’s border crossing.”

US Market Closings:

Dow advanced 19.1 points or 0.06% to 34,466.24
S&P 500 advanced 19.63 points or 0.47% to 4,239.18
Nasdaq advanced 108.58 points or 0.78% to 14,020.33
Russell 2000 declined 15.72 points or -0.68% to 2,311.41

Canada Market Closings:

TSX Composite advanced 47.2 points or 0.24% to 20,049.47
TSX 60 advanced 2.04 points or 0.17% to 1,197.19

Brazil Market Closing:

Bovespa advanced 169.37 points or 0.13% to 130,076.17

ENERGY:

The oil markets had a green day today:

Crude Oil increased 0.17 USD/BBL or 0.24% to 70.1300
Brent increased 0.37 USD/BBL or 0.51% to 72.4300
Natural gas increased 0.01 USD/MMBtu or 0.32% to 3.1390
Gasoline increased 0.01 USD/GAL or 0.28% to 2.2086
Heating oil increased 0.01 USD/GAL or 0.35% to 2.1370

The above data was collected around 13:55 EST on Thursday

Top commodity gainers: Palm Oil (1.27%), Cocoa (1.32%), Coffee (1.21%) and Corn (1.09%)
Top commodity losers: Bitumen (-2.19%), Rice (-1.57%), Rubber (-1.61%), and Lumber (-3.61%)

The above data was collected around 14:05 EST on Thursday.

BONDS:

Japan 0.0520%(-1bp), US 2’s 0.1508%(-0.00%), US 10’s 1.4688%(-2bps); US 30’s 2.1594%(-0.01%), Bunds -0.2570% (-1bp), France 0.111% (-1bp), Italy 0.7942% (-4bp), Turkey 17.87% (+0bp), Greece 0.8090% (-1bp), Portugal 0.403% (+1bp); Spain 0.39% (-2bp) and UK Gilts 0.742% (+1bp).