Market Talk – March 30, 2021

Posted Mar 30, 2021 by Martin Armstrong |

Spread the love

ASIA:

Chinese government bonds will be added to the FTSE World Government Bond Index (WGBI) over three years from the end of October, FTSE Russell said in a statement. Chinese government bonds were previously included in index suites from JPMorgan and Bloomberg Barclays, but FTSE WGBI inclusion is expected to have a larger effect due to the size of passive flows tracking it. HSBC said that with roughly $2.5 trillion tracking the WGBI, some $130 billion in inflows could be expected, given China’s eventual 5.25% weighting — about $3.6 billion a month.

India’s 2021 economic output is expected to remain below the 2019 level, the annual survey by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) has said. Based on data available up to 9 March, this year’s survey report released Tuesday made the observation about India’s economic output while comparing the country’s coronavirus pandemic response with that of China. It said India entered the pandemic with “subdued” GDP growth and investments after which a stringent lockdown caused economic disruptions that mounted in the second quarter of 2020. Though India had an “impressive economic turnaround” in the third quarter of 2020, the pace of recovery moderated in the fourth quarter with estimated year-on-year growth was still close to zero, the report said.

The major Asian stock markets had a mixed day today:

NIKKEI 225 increased 48.18 points or 0.16% to 29,432.70
Shanghai increased 21.38 points or 0.62% to 3,456.68
Hang Seng increased 239.20 points or 0.84% to 28,577.50
ASX 200 decreased 61.10 points or -0.90% to 6,738.40
Kospi increased 33.96 points or 1.12% to 3,070.00
SENSEX increased 1,128.08 points or 2.30% to 50,136.58
Nifty50 increased 337.80 points or 2.33% to 14,845.10

The major Asian currency markets had a mixed day today:

AUDUSD decreased 0.00454 or -0.59% to 0.75919
NZDUSD decreased 0.00249 or -0.36% to 0.69796
USDJPY increased 0.43 or 0.39% to 110.27
USDCNY decreased 0.00128 or -0.02% to 6.57491

Precious Metals:

Gold decreased 26.94 USD/t oz. or -1.57% to 1,685.05
Silver decreased 0.59 USD/t. oz or -2.40% to 24.079

Some economic news from last night:

Japan:

Jobs/applications ratio (Feb) decreased from 1.10 to 1.09

Unemployment Rate (Feb) remain the same at 2.9%

Retail Sales (YoY) (Feb) increased from -2.4% to -1.5%

New Zealand:

Building Consents (MoM) (Feb) decreased from 1.5% to -18.2%

Some economic news from today:

Hong Kong:

Retail Sales (YoY) (Feb) increased from -13.6% to 30.0%

EUROPE/EMEA:

Fitch ratings new report says extending Covid-19 relief measures will support UK residential mortgage borrower performance this year, but we still expect arrears to rise slightly as they are phased out. The extended stamp duty reduction will help delay but not prevent a reversal in price growth. Following the UK budget Fitch Rating has updated its arrears and now anticipate total arrears to rise to between 1.0% and 2.0% by end-2021, compared with 1.5%-2.5% in our Global Housing and Mortgage Outlook – 2021. The budget extended the coronavirus job retention scheme (CJRS) and self-employed income support scheme (SEIS) to the end of September.

The US has warned it could put tariffs of up to 25% on a host of UK exports in retaliation for a UK tax on tech firms. Ceramics, make-up, overcoats, games consoles and furniture could all be hit, according to a list published by the Biden administration. The duties are designed to raise $325m (£235.8m), the amount the US believes the UK will raise from US tech firms.

The major Europe stock markets had a green day:

CAC 40 increased 72.53 points or 1.21% to 6,088.04
FTSE 100 increased 35.95 points or 0.53% to 6,772.12
DAX 30 increased 190.89 points or 1.29% to 15,008.61

The major Europe currency markets had a mixed day today:

EURUSD decreased 0.00509 or -0.43% to 1.17167
GBPUSD decreased 0.00538 or -0.39% to 1.37165
USDCHF increased 0.00306 or 0.33% to 0.94200

Some economic news from Europe today:

Germany:

German Import Price Index (MoM) (Feb) remain the same at 1.7%

German Import Price Index (YoY) (Feb) increased from -1.2% to 1.4%

German CPI (MoM) (Mar) decreased from 0.7% to 0.5%

German CPI (YoY) (Mar) increased from 1.3% to 1.7%

German HICP (MoM) (Mar) decreased from 0.6% to 0.5%

German HICP (YoY) (Mar) increased from 1.6% to 2.0%

Norway:

Core Retail Sales (MoM) (Feb) decreased from -0.1% to -0.3%

France:

French Consumer Confidence (Mar) increased from 91 to 94

Swiss:

KOF Leading Indicators (Mar) increased from 102.6 to 117.8

Spain:

Spanish CPI (YoY) increased from 0.0% to 1.3%

Spanish CPI (MoM) increased from -0.6% to 1.0%

Spanish HICP (MoM) increased from -0.6% to 1.9%

Spanish HICP (YoY) (Mar) increased from -0.1% to 1.2%

Spanish Retail Sales (YoY) (Feb) increased from -9.4% to -5.9%

Spanish Business Confidence increased from -6.4 to -3.7

Italy:

Italian PPI (MoM) (Feb) decreased from 1.4% to 0.5%

Italian PPI (YoY) (Feb) increased from -0.3% to 0.7%

Euro Zone:

Business and Consumer Survey (Mar) increased from 93.4 to 101.0

Business Climate (Mar) increased from -0.13 to 0.30

Consumer Confidence (Mar) remain the same at -10.8

Consumer Inflation Expectation (Mar) increased from 15.7 to 18.6

Selling Price Expectations (Mar) increased from 9.8 to 17.6

Services Sentiment (Mar) increased from -17.0 to -9.3

Industrial Sentiment (Mar) increased from -3.1 to 2.0

US/AMERICAS:

Southwest Airlines Co agreed to purchase 100 737 MAX airplanes from Boeing. Despite safety concerns that plagued Boeing last year, Southwest has plans to purchase at least 600 aircrafts from Boeing within the next decade. Boeing claims that the new 737 MAX jets will require less fuel and produce 14% fewer carbon emissions, a “green” flight feature that many airlines are beginning to advertise.

Twenty-one Democratic US Senators are encouraging President Joe Biden to provide additional coronavirus stimulus aid. Led by Senate Finance Committee Chairman Ron Wyden, the Democrats are influencing the Biden administration to provide Americans with recurring direct stimulus payments and additional unemployment aid. Wyden pointed to last summer when additional unemployment aid expired before new legislation was passed, which led to millions of citizens falling beneath the poverty level. Members of the Federal Reserve have urged the new administration not to borrow or accumulate more debt with the lingering temptation of lower interest rates. However, numerous Democrats are proposing raising taxes to pay for these social initiatives. President Biden stated that he will reveal his next economic recovery plan tomorrow, which may come in the form of two $1.5 trillion bills.

Canada is set to receive a shipment of 1.5 million doses of AstraZeneca’s coronavirus vaccine this Tuesday. However, yesterday Canada’s National Advisory Committee on Immunization (NACI) prohibited the use of the AstraZeneca vaccine in persons under the age of 55 due to the risk of blood clotting. Although Prime Minister Justin Trudeau originally warded off any ill impacts of the vaccination after various countries banned its use, the NACI has changed its warning yet again after finding that one in 100,000 people may be prone to blood clotting. Over 3 million doses are Pfizer and Moderna vaccinations are also set to arrive in the nation this week.

US Market Closings:

Dow declined 104.41 points or -0.31% to 33,066.96
S&P 500 declined 12.54 points or -0.32% to 3,958.55
Nasdaq declined 14.25 points or -0.11% to 13,045.39
Russell 2000 advanced 37.11 points or 1.72% to 2,195.8

Canada Market Closings:

TSX Composite declined 13.66 points or -0.07% to 18,705.56
TSX 60 declined -1.01 points or -0.09% to 1,118.86

Brazil Market Closing:

Bovespa advanced 1,430.95 points or 1.24% to 116,849.67

ENERGY:

The oil markets had a negative day today:

Crude Oil decreased 1.07 USD/BBL or -1.74% to 60.4900
Brent decreased 0.97 USD/BBL or -1.49% to 64.0100
Natural gas decreased 0.035 USD/MMBtu or -1.32% to 2.6180
Gasoline decreased 0.0144 USD/GAL or -0.72% to 1.9808
Heating oil decreased 0.0209 USD/GAL or -1.15% to 1.7889

Top commodity gainers: Lumber (2.25%), Coal (1.12%), Palladium (1.43%) and Bitumen (0.85%)
Top commodity losers: Cocoa (-4.06 %), Canola (-3.95%), Silver (-2.40%), and Coffee (-3.42%)

The above data was collected around 13:50 EST on Tuesday.

BONDS:

Japan 0.09%(+2bp), US 2’s 0.15%(+0.002%), US 10’s 1.73%(+1bps); US 30’s 2.40%(-0.02%), Bunds -0.26% (+6bp), France -0.03% (+5bp), Italy 0.69% (+5bp), Turkey 18.17% (+0bp), Greece 0.91% (+4bp), Portugal 0.24% (+5bp); Spain 0.34% (+3bp) and UK Gilts 0.82% (+3bp).