Market Talk – January 21, 2021

Posted Jan 21, 2021 by Martin Armstrong |

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ASIA:

The Bank of Japan kept monetary policy steady on Thursday and revised its economic forecast for the next fiscal year, signaling that it has delivered sufficient stimulus, for now, to cushion the blow from the COVID-19 pandemic, Reuters reported. As widely expected, the central bank kept unchanged its target for short-term interest rates at -0.1% and that for 10-year government bond yields around 0% in a two-day rate review. In a quarterly review of its projections, the BOJ trimmed its economic forecast for the current year ending in March to a 5.6% contraction from the previous forecast for a 5.5% decline. But it revised up its growth projection for the next fiscal year to a 3.9% expansion from a 3.6% increase forecast in October.

The major Asian stock markets had a mixed day today:

NIKKEI 225 increased 233.60 points or 0.82% to 28,756.86
Shanghai increased 38.17 points or 1.07% to 3,621.26
Hang Seng decreased 34.71 points or -0.12% to 29,927.76
ASX 200 increased 53.30 points or 0.79% to 6,823.70
Kospi increased 46.29 points or 1.49% to 3,160.84
SENSEX decreased 167.36 points or -0.34% to 49,624.76
Nifty50 decreased 54.35 points or -0.37% to 14,590.35

The major Asian currency markets had a mixed day today:

AUDUSD decreased 0.00193 or -0.25% to 0.77430
NZDUSD decreased 0.00127 or -0.18% to 0.71790
USDJPY increased 0.07 or 0.07% to 103.61
USDCNY increased 0.00827 or 0.13% to 6.46973

Precious Metals:

Gold decreased 7.45 USD/t oz. or -0.40% to 1,863.46
Silver decreased 0.077 USD/t. oz or -0.30% to 25.730

Some economic news from last night:

Japan:

BoJ Interest Rate Decision remain the same at -0.10%

Adjusted Trade Balance decreased from 0.55T to 0.48T

Exports (YoY) (Dec) increased from -4.2% to 2.0%

Foreign Bonds Buying decreased from 736.2B to 272.4B

Foreign Investments in Japanese Stocks decreased from 512.5B to 169.9B

Imports (YoY) (Dec) decreased from -11.1% to -11.6%

Trade Balance (Dec) increased from 366.1B to 751.0B

Australia:

MI Inflation Expectations decreased from 3.5% to 3.4%

Employment Change (Dec) decreased from 90.0K to 50.0K

Full Employment Change (Dec) decreased from 84.2K to 35.7K

Participation Rate (Dec) increased from 66.1% to 66.2%

Unemployment Rate (Dec) decreased from 6.8% to 6.6%

New Zealand：

RBNZ Offshore Holdings (Dec) increased from 43.2% to 44.0%

External Migration & Visitors (Nov) decreased from -98.20% to -98.60%

Permanent/Long-Term Migration (Nov) decreased from 892 to 672

Some economic news from today:

Indonesia:

Deposit Facility Rate (Jan) remain the same at 3.00%

Lending Facility Rate (Jan) remain the same at 4.50%

Interest Rate Decision remain the same at 3.75%

Hong Kong:

CPI (YoY) (Dec) decreased from -0.20% to -0.70%

EUROPE/EMEA:

A new research hub led by the University of Exeter will spearhead national efforts to create a sustainable, circular economy where fewer resources are used and more waste materials reused – delivering huge benefits to the environment and UK economy. The National Interdisciplinary Circular Economy Hub is supported with £3.5 million from UK Research and Innovation (UKRI). It will work with the five circular economy centers that were recently announced to explore how reusing waste materials in a wide range of industries, including textiles, construction, chemical and metals, could boost the UK economy as well as deliver massive environmental benefits.

The major Europe stock markets had a negative day:

CAC 40 decreased 37.65 points or -0.67% to 5,590.79
FTSE 100 decreased 24.97 points or -0.37% to 6,715.42
DAX 30 decreased 14.70 points or -0.11% to 13,906.67

The major Europe currency markets had a mixed day today:

EURUSD increased 0.0027 or 0.22% to 1.21422
GBPUSD increased 0.00375 or 0.27% to 1.37095
USDCHF decreased 0.00244 or -0.27% to 0.88667

Some economic news from Europe today:

Norway:

Industrial Confidence (Q4) increased from 2.0 to 3.1

France:

French Business Survey (Jan) increased from 94 to 98

Italy:

Italian Industrial New Orders (YoY) (Nov) increased from 1.2% to 5.3%

Italian Industrial New Orders (MoM) (Nov) decreased from 3.0% to -1.3%

Italian Industrial Sales (YoY) (Nov) decreased from -2.00% to -4.60%

Italian Industrial Sales (MoM) (Nov) decreased from 2.10% to -2.00%

Spain:

Spanish Trade Balance increased from -0.65B to -0.59B

UK:

CBI Industrial Trends Orders (Jan) decreased from -25 to -38

Euro Zone:

Consumer Confidence (Jan) decreased from -13.9 to -15.5

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

ECB Marginal Lending Facility remain the same at 0.25%

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

US/AMERICAS:

Americans are slowly returning to the workforce, according to new data from the Labor Department. Weekly jobless claims came in at 900,000, 25,000 less applicants than analysts expected, and last week’s total was revised down by 39,000 to 926,000. Continuing weekly claims decreased by 127,000 to a total of 5.05 million.

President Joe Biden will sign 10 executive orders to combat COVID on his first day of office. Masks must be worn on federal properties and while traveling on public transportation. International arrivals will be required to submit a negative COVID test prior to entering the US and will be asked to quarantine as well. In terms of vaccinations, the goal is to deliver 100 million shots within his first 100 days of office. The White House is opening a COVID-19 Response Office to specifically handle the pandemic. Data collection and contact tracing is expected to increase. The new administration will invoke the Defense Production Act to increase supplies such as ventilators, PPE, vaccinations, and new drug development.

The now split GOP is warning Senate Majority Leader Mitch McConnell not to impeach Trump over fears it could further split the party and cause civil unrest. McConnell, once a strong Trump supporter, publicly accused the former president of provoking the Capitol building raid. “They were provoked by the President and other powerful people,” he stated. Still, ten Republican Senators have already said they agree with McConnell.

Venezuelan President Nicolás Maduro sent an emergency shipment of oxygen to Brazil. Numerous deaths due to asphyxiation have been reported in Manaus, Brazil, due to a severe shortage of oxygen. “Venezuela is reaching out to the people of Amazonas in solidarity … and we hope this oxygen reaches the people of Brazil fast … The trucks are on their way,” Maduro stated, while also criticizing Bolsonaro’s response to the pandemic. Brazil’s government has set up an emergency route on BR-319 to ship supplies to the region rapidly.

US Market Closings:

Dow declined 12.37 points or -0.04% to 31,176.01
S&P 500 advanced 1.22 points or 0.03% to 3,853.07
Nasdaq advanced 73.67 points or 0.55% to 13,530.92
Russell 2000 declined 19.2 points or -0.89% to 2,141.42

Canada Market Closings:

TSX Composite declined 98.71 points or -0.55% to 17,916.2
TSX 60 declined 5.93 points or -0.55% to 1,063.01

Brazil Market Closing:

Bovespa declined 1,317.41 points or -1.1% to 118,328.99

ENERGY:

The oil markets had a mixed day today:

Crude Oil decreased 0.26 USD/BBL or -0.49% to 53.0500
Brent decreased 0.11 USD/BBL or -0.20% to 55.9700
Natural gas decreased 0.069 USD/MMBtu or -2.72% to 2.4700
Gasoline increased 0.0016 USD/GAL or 0.10% to 1.5455
Heating oil decreased 0.0049 USD/GAL or -0.31% to 1.5955

Top commodity gainers: Palm Oil (1.43%), Lumber (6.86%), Lithium (5.56%) and Tin (1.41%)
Top commodity losers: Ethanol (-1.84%), Wheat (-1.20%), Natural Gas (-2.72%), and Sugar (-1.35%)

The above data was collected around 12:39 EST on Thursday.

BONDS:

Japan 0.04%(+0bp), US 2’s 0.00%(-0.01%), US 10’s 1.10%(+1bps); US 30’s 2.00%(+0.02%), Bunds -0.53% (+2bp), France -0.30% (-0bp), Italy 0.67% (+8bp), Turkey 13.05% (-3bp), Greece 0.66% (+1bp), Portugal 0.10% (+6bp); Spain 0.14% (+6bp) and UK Gilts 0.33% (+3bp).