Market Talk – March 22, 2021

Posted Mar 22, 2021 by Martin Armstrong |

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ASIA:

China will step up imports of high-quality foreign goods and services as the economy makes a steady recovery, vice premier Han Zheng said on Sunday. China will strengthen macro policy coordination with other countries, Han told the China Development Forum, a high-level business gathering hosted by the Development Research Centre of the State Council. Its economy is widely predicted to expand by more than 8% in 2021, led by an expected double-digit rise in the first quarter, but analysts and officials say the recovery remains uneven.

The European Union imposed sanctions on Monday on four Chinese officials, including a top security director, for human rights abuses in Xinjiang, to which Beijing responded with its own sanctions on Europeans. The Netherlands summoned China’s ambassador to The Hague after Beijing announced its measures on 10 Europeans, while the European Parliament, along with German and Belgian and other foreign ministers, rejected the Chinese retaliation.

The major Asian stock markets had a mixed day today:

NIKKEI 225 decreased 617.90 points or -2.07% to 29,174.15
Shanghai increased 38.78 points or 1.14% to 3,443.44
Hang Seng decreased 105.60 points or -0.36% to 28,885.34
ASX 200 increased 44.30 points or 0.66% to 6,752.50
Kospi decreased 4.07 points or -0.13% to 3,035.46
SENSEX decreased 86.95 points or -0.17% to 49,771.29
Nifty50 decreased 7.60 points or -0.05% to 14,736.40

The major Asian currency markets had a mixed day today:

AUDUSD increased 0.00067 or 0.09% to 0.77467
NZDUSD increased 0.00091 or 0.13% to 0.71763
USDJPY decreased 0.18 or -0.17% to 108.70
USDCNY decreased 0.00462 or -0.07% to 6.50349

Precious Metals:

Gold decreased 5.73 USD/t oz. or -0.33% to 1,739.01
Silver decreased 0.54 USD/t. oz or -2.07% to 25.701

Some economic news from last night:

China:

PBoC Loan Prime Rate remain the same at 3.85%

Nerw Zealand:

Westpac Consumer Sentiment decreased from 106.0 to 105.2

Indonesia:

Motorbike Sales (YoY) decreased from -14.70% to -30.80%

Some economic news from today:

Japan：

Coincident Indicator (MoM) (Feb) decreased from 3.5% to 2.9%

Leading Index increased from 97.7 to 98.5

Hong Kong:

CPI (YoY) (Feb) decreased from 1.90% to 0.30%

EUROPE/EMEA:

A report published by Centre for Economics and Business Research on Monday shows a year of Covid-19 lockdowns has cost the UK economy £251bn – the equivalent of the entire annual output of the south-east of England or nearly twice that of Scotland. Analysis by the Centre for Economics and Business Research found that while the whole of the country had suffered huge damage from restrictions on activity since the first national lockdown began, some poorer regions had suffered the most. Sam Miley, a CEBR economist, said the report compared his organization’s pre-Covid-19 forecasts for the UK with the level of output 12 months after Boris Johnson told Britons that they had to stay at home. Gross value added (GVA) – which measures the value of the goods and services produced by the economy, minus the costs of inputs and raw materials needed to deliver them – was more than £250bn lower than it would otherwise have been, Miley said.

The major Europe stock markets had a mixed day:

CAC 40 decreased 29.48 points or -0.49% to 5,968.48
FTSE 100 increased 17.39 points or 0.26% to 6,726.10
DAX 30 increased 36.21 points or 0.25% to 14,657.21

The major Europe currency markets had a mixed day today:

EURUSD increased 0.00295 or 0.25% to 1.19351
GBPUSD increased 0.00016 or 0.01% to 1.38604
USDCHF decreased 0.00411 or -0.44% to 0.92325

Some economic news from Europe today:

Euro Zone:

Current Account (Jan) decreased from 36.7B to 30.5B

Current Account n.s.a. (Jan) decreased from 51.9B to 5.8B

US/AMERICAS:

Canadian Pacific Railway announced over the weekend that is will purchase Kansas City Southern (KCS) for $25 billion. The plan is to create the first railroad that connects Canada, the United States, and Mexico to enable easier trade. Kansas City Southern shareholders will receive 0.489 of a Canadian Pacific Share, as well as $90 for each KCS share they hold. Canadian Pacific Chief Executive Keith Creel said the move could not come soon enough as a lifeline for the USMCA Trade Agreement that passed under former President Trump, “as the new USMCA Trade Agreement among these three countries makes the efficient integration of the continent’s supply chains more important than ever before.”

The US Education Department stated that it would eliminate student debt for those who for-profit colleges defrauded. The move will erase $1 billion in debt for 72,000 borrowers who filed claims against their institutions. Additionally, students will be reimbursed for any payments made on their federal student loans, and it will not negatively effect their credit ratings. Secretary of Education Dr. Miguel Cardona, who was appointed to his role at the beginning of the month, said that an investigation proved these students were “harmed” by their respective colleges and did not receive the education for which they took out loans.

The New York Times published an article stating that the Biden administration was planning on rolling out two additional coronavirus relief bills to the tune of $3 trillion. However, White House spokeswoman Jen Psaki called the article “premature and not a reflection of the White House’s thinking.” Psaki said that the current administration is considering “a range of potential options” to reform taxation “so it rewards work, not wealth.”

US Market Closings:

Dow advanced 103.17 points or 0.32% to 32,731.14
S&P 500 advanced 27.47 points or 0.7% to 3,940.57
Nasdaq advanced 162.31 points or 1.23% o 13,377.54
Russell 2000 declined 20.7 points or -0.9% to 2,266.84

Canada Market Closings:

TSX Composite declined 38.87 points or -0.21% to 18,815.13
TSX 60 declined 2.7 points or -0.24% to 1,121.45

Brazil Market Closing:

Bovespa declined 1,242.72 points or -1.07% to 114,978.86

ENERGY:

The oil markets had a mixed day today:

Crude Oil decreased 0.2 USD/BBL or -0.33% to 61.2200
Brent decreased 0.26 USD/BBL or -0.40% to 64.2700
Natural gas increased 0.017 USD/MMBtu or 0.67% to 2.5520
Gasoline increased 0.0151 USD/GAL or 0.78% to 1.9582
Heating oil increased 0.0049 USD/GAL or 0.27% to 1.8272
Top commodity gainers: Coffee (2.59%), Coal (3.57%), Zinc (1.02%) and Tin (1.63%)
Top commodity losers: Sugar (-1.21%), Corn (-1.26%), Platinum (-1.60%), and Silver (-2.07%)

The above data was collected around 12:50 EST on Monday.

BONDS:

Japan 0.08%(-3bp), US 2’s 0.15%(+0.0003%), US 10’s 1.68%(-5bps); US 30’s 2.38%(-0.072%), Bunds -0.32% (+1bp), France -0.08% (-3bp), Italy 0.65% (-2bp), Turkey 16.03% (+243bp), Greece 0.92% (-2bp), Portugal 0.23% (-1bp); Spain 0.34% (-1bp) and UK Gilts 0.82% (-2bp).