ASIA:
The chairmen of India’s biggest corporate companies lost around 7 billion USD of personal wealth combined to date in notional terms due to the COVID-19 outbreak in China and other parts of the world. Most of this wealth erosion happened over the last 15 days, when domestic equity indices have come tumbling down. BSE Sensex has crashed nearly 3,000 points in 11 sessions since February 12, when India’s stock exchange first caught the chill from the virus.
Indian jewelers have received surprise tax notices asking them to turn over money they made from customers who scrambled to buy gold after Prime Minister Narendra Modi’s 2016 ban on high currency notes, according to a dozen jewelers and tax officials. According to the Indian Bullion and Jewelers Association, about 15,000 Indian jewelers have been sent tax demands asking them the source of earnings of past revenue. India’s tax authorities are seeking around $7 billion from people in the gems and jewelry sector on revenue made of such nature, according to sources.
According to a Reuters poll of economists, the median forecast for India’s GDP growth is at 4.7% for the fourth quarter, marginally higher than 4.5% in the previous quarter. The small increase could be because of a rebound in rural demand, private consumption, and government spending. Economists said the coronavirus effect on the economy will be visible in the quarter ending March 2020 and it would be a challenge to achieve 4.5% of annual growth this quarter.
In a survey released by the Beijing-based American Chamber of Commerce in China this week, it is reported that foreign businesses, primarily in US and European companies, are still facing challenges in getting back to work, especially in factories, adding to revenue losses. Travel disruptions to the flow of people and goods are a top challenge for foreign companies in China right now, says Greg Gilligan, chairman of the Beijing-based American Chamber of Commerce in China. Most of the 169 member companies that responded to the chamber’s survey last week said it’s too early to tell how much the delays cost, but about 10% estimated the losses are at least $71,400 a day.
The major Asian stock markets had a negative day today:
- NIKKEI 225 decreased 805.27 points or -3.67% to 21,142.96
- Shanghai decreased 111.03 points or -3.71% to 2,880.30
- Hang Seng decreased 648.69 points or -2.42% to 26,129.93
- ASX 200 decreased 216.70 points or -3.25% to 6,441.20
- Kospi decreased 67.88 points or -3.30% to 1,987.01
- SENSEX decreased 1,448.37 points or -3.64% to 38,297.29
The major Asian currency markets had a negative day today:
- AUDUSD decreased 0.00867 or -1.32% to 0.64913
- NZDUSD decreased 0.0076 or 1.20% to 0.6238
- USDJPY decreased 1.45 or -1.32% to 108.17
- USDCNY decreased 0.02207 or -0.31% to 6.98643
Precious Metals:
- Gold decreased 59.95 USD/t oz. or -3.65% to 1,580.91
- Silver decreased 1.1917 USD/t. oz or -6.68% to 16.6478
Some economic news from last night:
South Korea:
Retail Sales (MoM) decreased from 0.3% to -3.1%
Industrial Production (MoM) (Jan) decreased from 3.7% to -1.3%
Industrial Production (YoY) (Jan) decreased from 4.2% to -2.4%
Service Sector Output (MoM) (Jan) increased from 0.1% to 0.4%
Japan:
Jobs/applications ratio (Jan) decreased from 1.57 to 1.49
Tokyo Core CPI (YoY) (Feb) decreased from 0.7% to 0.5%
Tokyo CPI (YoY) (Feb) decreased from 0.6% to 0.4%
CPI Tokyo Ex Food and Energy (MoM) (Feb) increased from -0.5% to 0.0%
Unemployment Rate (Jan) increased from 2.2% to 2.4%
Foreign Bonds Buying decreased from 1,421.8B to 658.7B
Foreign Investments in Japanese Stocks increased from -216.6B to -68.6B
Industrial Production (MoM) (Jan) decreased from 1.2% to 0.8%
Industrial Production forecast 1m ahead (MoM) (Feb) increased from 3.5% to 5.3%
Industrial Production forecast 2m ahead (MoM) (Mar) decreased from 4.1% to -6.9%
Retail Sales (YoY) (Jan) increased from -2.6% to -0.4%
Auatralia:
Housing Credit (Jan) increased from 0.2% to 0.3%
Private Sector Credit (MoM) (Jan) increased from 0.3% to 0.4%
Singapore:
Bank Lending (Jan) decreased from 692.4B to 691.2B
Indonesia:
M2 Money Supply (YoY) (Jan) increased from 6.50% to 7.10%
Some economic news from today:
Japan:
Housing Starts (YoY) (Jan) decreased from -7.9% to -10.1%
Construction Orders (YoY) (Jan) decreased from 18.0% to -17.0%
Hong Kong:
M3 Money Supply (Jan) increased from 2.3% to 2.4%
India:
Federal Fiscal Deficit (Jan) increased from 9,317.25B to 9,854.72B
Bank Loan Growth decreased from 7.1% to 6.4%
Deposit Growth decreased from 9.9% to 9.2%
FX Reserves, USD increased from 476.09B to 476.12B
Infrastructure Output (YoY) (Jan) increased from 1.3% to 2.2%
GDP Annual decreased from 6.1% to 5.0%
GDP Quarterly (YoY) (Q3) decreased from 5.1% to 4.7%
EUROPE/EMEA:
Today capped the worst performance over the course of a week since the financial crisis of 2008. Today alone the CAC, DAX, and FTSE dropped more than 3% as fears over global slowdown due to the coronavirus continue to mount.
Hundreds of refugees have reached the European border as Turkey pleads with the EU for assistance in keeping the refugees within the Turkish border. Bulgarian and Greece authorities have already deployed military to the borders to stop anyone trying to cross.
The French European minister hit at the UK for implementing “artificial deadlines” and said that the EU will not be pressured into signing any deal just for the sake of being on time. The initial conversations between the two parties seem to be surrounding the topic of respect, with the EU assuring the UK they will respect the sovereignty of the UK as long as they respect theirs.
The major Europe stock markets had a negative day today:
- CAC 40 decreased 185.69 points or -3.38% to 5,309.90
- FTSE 100 decreased 215.79 points, or -3.18% to 6,580.61
- DAX 30 decreased 477.11 points or -3.86% to 11,890.35
The major Europe currency markets had a mixed day today:
- EURUSD decreased 0.00045 or -0.04% to 1.09955
- GBPUSD decreased 0.0134 or -1.04% to 1.27550
- USDCHF increased 0.0003 or 0.03% to 0.9687
Some economic news from Europe today:
UK:
Nationwide HPI (MoM) (Feb) decreased from 0.5% to 0.3%
Nationwide HPI (YoY) (Feb) increased from 1.9% to 2.3%
Germany:
German Import Price Index (MoM) (Jan) decreased from 0.2% to -0.4%
German Import Price Index (YoY) (Jan) decreased from -0.7% to -0.9%
German Unemployment Change (Feb) decreased from -4K to -10K
German Unemployment Rate (Feb) remain the same at 5.0%
German Unemployment (Feb) decreased from 2.272M to 2.262M
German Unemployment n.s.a. (Feb) decreased from 2.426M to 2.396M
German CPI (MoM) (Feb) increased from -0.6% to 0.4%
German CPI (YoY) (Feb) remain the same at 1.7%
German HICP (MoM) (Feb) increased from -0.8% to 0.6%
German HICP (YoY) (Feb) increased from 1.6% to 1.7%
Spain:
Spanish Current account (Dec) decreased from 3.35B to 2.21B
Norway:
Credit Indicator (YoY) (Jan) decreased from 5.1% to 5.0%
Central Bank Currency Purchase (Mar) remain the same at -500.0M
Unemployment Change (Feb) decreased from 75.67K to 75.15K
Unemployment Rate n.s.a. (Feb) decreased from 2.40% to 2.30%
France:
French Consumer Spending (MoM) (Jan) decreased from -0.3% to -1.1%
French CPI (YoY) decreased from 1.5% to 1.4%
French CPI (MoM) increased from -0.4% to 0.0%
French GDP (QoQ) (Q4) decreased from 0.3% to -0.1%
French HICP (MoM) increased from -0.5% to 0.0%
French HICP (YoY) decreased from 1.7% to 1.6%
French PPI (MoM) (Jan) decreased from 0.1% to -0.1%
Swiss:
Retail Sales (YoY) (Jan) decreased from 0.8% to -0.1%
KOF Leading Indicators (Feb) increased from 100.1 to 100.9
Italy:
Italian CPI (YoY) (Feb) decreased from 0.5% to 0.4%
Italian CPI (MoM) (Feb) decreased from 0.1% to 0.0%
Italian HICP (YoY) (Feb) decreased from 0.4% to 0.3%
Italian HICP (MoM) (Feb) increased from -1.8% to -0.4%
US/AMERICAS:
St. Louis Federal Reserve President James Bullard announced this Friday that the US economy is in a good position. In fact, Bullard noted that the US economy may benefit in the long-term despite this week’s sell-off as capital may seek safety in the US. The Federal Reserve initially expected to hold rates this year prior to the coronavirus disrupting the global economy on a mass scale. Now, the Fed president believes that rate cuts could become a possibility if conditions worsen. “Further policy rate cuts are a possibility if a global pandemic actually develops with health effects approaching the scale of ordinary influenza, but this is not the baseline case at this time,” Bullard stated this Friday.
The unforeseen steep downtown in the global economy this quarter is causing many analysts to question whether the Federal Reserve will use interest rates manipulation to boost the US economy. The Chief US economist for Goldman predicts the Fed will lower rates by 75 basis points in the near-term, and will reduce rates potentially three times between March and June. Other analysts are anticipating four rate cuts in 2020. Goldman is expecting moderate disruptions to the supply chain in the goods-producing sector that will prevent a rapid recovery.
Former Federal Reserve Governor Kevin Warsh voiced pessimism over the Federal Reserve’s ability to handle this steep financial downturn. “They’ve got a knife. There’s a gunfight. You might as well go find some friends that also have knives and see if you can’t to it together,” Warsh told reporters at CNBC. “Almost invariably, the real world understands what’s going on, and they want a responsive central bank when there’s a risk of some really bad outcomes,” he noted after stating that he believes the Fed has been too slow to act on incoming data. Warsh is rumored to be a potential replacement for Fed Chairman Jerome Powell once he steps down from his post.
US Market Closings:
- Dow declined 357.28 points or -1.39% to 25,409.36
- S&P 500 declined 24.54 points or -0.82% to 2,954.22
- Nasdaq advanced 0.89 of a point or 0.01% to 8,567.37
- Russell 2000 declined 21.44 points or 1.43% to 1,476.43
Canada Market Closings:
- TSX Composite declined 454.39 points or -2.72% to 16,263.05
- TSX 60 declined 25.58 points or -2.56% to 972.15
Brazil Market Closing:
- Bovespa advanced 1,188.03 points or 1.15% to 104,171.57
ENERGY:
Crude oil mimicked that of the stock market with a weekly performance not seen for four years. Brent dropped more than 3% today and is currently wrestling with the 50 USD mark. Saudi Arabia already confirmed that it will implement production cuts in order to stabilize the price. We need to watch if OPEC+ will follow suit.
The oil markets had a mixed day today:
- Crude Oil decreased 2.46 USD/BBL or -5.22% to 44.6483
- Brent decreased 2.44 USD/BBL or -4.68% to 49.7471
- Natural gas decreased 0.0441 USD/MMBtu or -2.37% to 1.8153
- Gasoline increased 0.0023 1USD/GAL or 0.17% to 1.3902
- Heating oil increased 0.0042 USD/GAL or 0.28% to 1.4862
- Top commodity gainers: Ethanol (1.11%), Canola (1.32%), Coffee (2.22%), and Rice (1.38%)
- Top commodity losers: Bitumen (-5.43%), Palladium (-8.99%), Palm Oil (-9.94%), and Silver (-6.68%)
The above data was collected around 13:40 EST on Friday.
BONDS:
Japan -0.10%(-4bp), US 2’s 0.92% (-17bps), US 10’s 1.16%(-13bps); US 30’s 1.67%(-12bps), Bunds -0.55% (-6bp), France -0.24% (-4bp), Italy 1.10% (+2bp), Turkey 12.80 % (+36bp), Greece 1.36% (+8bp), Portugal 0.31% (-2bp); Spain 0.30% (+3bp) and UK Gilts 0.44% (-5bp).
