Market Talk – April 8, 2021

Posted Apr 8, 2021 by Martin Armstrong |

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ASIA:

According to a study, some 75% of the world’s bitcoin mining is done in China. The reason given for this in the report is cheap electricity and relatively easy access to manufacturers who make specialized hardware. As a result, the nation’s bitcoin carbon footprint is as big as one of its ten largest cities, the report suggests. The research on China’s mining activities — published by peer-reviewed journal Nature Communications on Tuesday — was conducted by academics from the University of the Chinese Academy of Sciences, Tsinghua University, Cornell University and the University of Surrey.

India’s central bank, Reserve Bank of India (RBI) kept interest rates at record lows but committed to a massive government bond purchase program, keeping monetary policy accommodative amid concerns rising COVID-19 cases could derail a nascent economic recovery. The monetary policy committee decided unanimously to leave the RBI’s repo rate, its key lending rate, unchanged at 4%, and the reverse repo rate, its borrowing rate, at 3.35%.

The major Asian stock markets had a mixed day today:

NIKKEI 225 decreased 21.81 points or -0.07% to 29,708.98
Shanghai increased 2.93 points or 0.08% to 3,482.55
Hang Seng increased 333.27 points or 1.16% to 29,008.07
ASX 200 increased 70.80 points or 1.02% to 6,998.80
Kospi increased 5.85 points or 0.19% to 3,143.26
SENSEX increased 84.45 points or 0.17% to 49,746.21
Nifty50 increased 54.75 points or 0.37% to 14,873.80

The major Asian currency markets had a mixed day today:

AUDUSD increased 0.00221 or 0.29% to 0.76358
NZDUSD increased 0.0033 or 0.47% to 0.70437
USDJPY decreased 0.58 or -0.53% to 109.26
USDCNY increased 0.00836 or 0.13% to 6.55886

Precious Metals:

Gold increased 18.79 USD/t oz. or 1.08% to 1,756.07
Silver increased 0.323 USD/t. oz or 1.29% to 25.443

Some economic news from last night:

Japan:

Adjusted Current Account increased from 1.50T to 1.79T

Current Account n.s.a. (Feb) increased from 0.647T to 2.917T

Foreign Bonds Buying increased from 201.3B to 377.0B

Foreign Investments in Japanese Stocks increased from -852.4B to 978.4B

Hong Kong:

Manufacturing PMI (Mar) increased from 50.2 to 50.5

New Zealand:

ANZ Business Confidence decreased from -4.1 to -8.4

Some economic news from today:

Japan:

Household Confidence (Mar) increased from 33.9 to 36.1

Economy Watchers Current Index (Mar) increased from 41.3 to 49.0

EUROPE/EMEA:

The European Central Bank (ECB) is considering reducing its bond purchase program as early as this summer. The ECB put forward an emergency bond-buying program in March 2020 to deal with the economic shock of the global pandemic. This program, known as the PEPP, is currently set to end in March 2022 and total up to 1.85 trillion euros ($2.2 trillion U.S.). The ECB has forecast 4% gross domestic product (GDP) growth for the Euro area in 2021, after the region contracted by almost 7% in 2020. The central bank sees GDP standing 2.3% above pre-crisis levels by the end of 2023.

The French economy will expand by 5% in 2021, Economy Minister Bruno Le Maire said in a newspaper interview, as a third lockdown to tackle the coronavirus pandemic has prompted a downward revision in the previous government forecast for 6% growth. French schools and non-essential stores such as clothing chains will now be shut for four weeks, after COVID-19 cases surged in recent weeks, edging up the number of patients in intensive care units.

The major Europe stock markets had a green day:

CAC 40 increased 35.06 points or 0.57% to 6,165.72
FTSE 100 increased 56.90 points or 0.83% to 6,942.22
DAX 30 increased 26.32 points or 0.17% to 15,202.68

The major Europe currency markets had a mixed day today:

EURUSD increased 0.00268 or 0.23% to 1.18991
GBPUSD decreased 0.00082 or -0.06% to 1.37320
USDCHF decreased 0.00404 or -0.43% to 0.92539

Some economic news from Europe today:

Germany:

German Factory Orders (MoM) (Feb) increased from 0.8% to 1.2%

IHS Markit Construction PMI (Mar) increased from 41.0 to 47.5

UK:

Construction PMI (Mar) increased from 53.3 to 61.7

RICS House Price Balance (Mar) increased from 54% to 59%

Norway:

Manufacturing Production (MoM) (Feb) decreased from 2.5% to -0.4%

House Price Index (YoY) (Mar) increased from 9.70% to 12.50%

France:

French Current Account (Feb) decreased from -2.00B to -2.60B

French Exports (Feb) decreased from 39.9B to 38.7B

French Imports (Feb) decreased from 44.1B to 43.9B

French Trade Balance (Feb) decreased from -4.2B to -5.3B

Euro Zone:

PPI (YoY) (Feb) increased from 0.4% to 1.5%

PPI (MoM) (Feb) decreased from 1.7% to 0.5%

US/AMERICAS:

Despite the Federal Reserve delivering an optimistic forecast for unemployment by the end of 2021, nearly a quarter of Americans who lost their livelihoods during the pandemic have yet to return to work. The Bureau of Labor Statistics reported that 2.4 million people had been employed for 52 weeks or longer, with long-term unemployment affecting 24% of those unemployed. Several factors have contributed to long-term unemployment, such as lockdown impacting blue-collar workers who cannot work from home and women disproportionately leaving the workforce to care for children as many schools have yet to reopen.

The state of Floria has filed a lawsuit against the CDC for prohibiting cruise ships from sailing. Florida Governor Ron DeSantis stated that the CDC’s order has caused tens of thousands of workers to lose their jobs. “We don’t believe the federal government has the right to mothball a major industry for over a year, based on very little evidence and very little data,” DeSantis declared. Caribbean Group CEO Richard Fain has questioned why cruise lines have not been “treated the same as other sectors and travel and tourism and entertainment.” He also pointed to the irony of allowing travelers to fly to ports, but prohibiting them from boarding ships.

Ontario, Canada, the nation’s most populated province, has re-entered a full lockdown that is expected to last at least one month. Despite vaccines becoming available, the roll-out has been slower than anticipated. Health officials noted that new variants of the virus has become a top concern. Premier Doug Ford is facing harsh criticism for failing to implement a paid sick day program, as many were forced to choose between going to work while sick or losing income. Ford claims workers could have accessed funds through the Canada Recovery Sickness Benefit (CRSB) that offered C$500 weekly to anyone required to quarantine due to COVID-19.

US Market Closings:

Dow advanced 57.31 points or 0.17% to 33,503.57
S&P 500 advanced 17.22 points or 0.42% to 4,097.17
Nasdaq advanced 140.47 points or 1.03% to 13,829.31
Russell 2000 advanced 19.54 points or 0.88% to 2,242.6

Canada Market Closings:

TSX Composite advanced 99.8 points or 0.52% to 19,228.87
TSX 60 advanced 3.69 points or 0.32% to 1,145.19

Brazil Market Closing:

Bovespa advanced 689.65 points or 0.59% to 118,313.23

ENERGY:

The oil markets had a negative day today:

Crude Oil decreased 0.44 USD/BBL or -0.74% to 59.3300
Brent decreased 0.27 USD/BBL or -0.43% to 62.8900
Natural gas decreased 0.004 USD/MMBtu or -0.16% to 2.5160
Gasoline decreased 0.0049 USD/GAL or -0.25% to 1.9469
Heating oil decreased 0.0133 USD/GAL or -0.74% to 1.7946

Top commodity gainers: Ethanol (2.92%), Cotton (2.82%), Canola (2.76%) and Corn (2.59%)
Top commodity losers: Bitumen (-2.59%), Coal (-1.84%), Palm Oil (-1.72%), and Rubber (-1.68%)

The above data was collected around 11:29 EST on Thursday.

BONDS:

Japan 0.10%(+0bp), US 2’s 0.15%(-0.002%), US 10’s 1.66%(+1bps); US 30’s 2.35%(+0.017%), Bunds -0.32% (-0bp), France -0.07% (-1bp), Italy 0.68% (-3bp), Turkey 17.64% (+15bp), Greece 0.85% (-1bp), Portugal 0.24% (-1bp); Spain 0.35% (-0bp) and UK Gilts 0.79% (+2bp).