Market Talk – May 5, 2021

Posted May 5, 2021 by Martin Armstrong |

Spread the love

ASIA:

U.S. Trade Representative Katherine Tai said on Wednesday she expects to engage “in the near term” with Chinese officials to assess their implementation of the “Phase 1” trade deal between the two countries, with the outcome to influence the fate of Washington’s punitive tariffs on Beijing. Tai told that she respects the need for continuity in U.S.-China trade policy, including the two-year trade deal implemented last year by the Trump administration.

India’s oil imports in March rose from the previous month, buoyed by an upturn in economic activity that could take a knock again because of renewed lockdowns in the world’s third-largest crude importer. Crude imports rose 7.3% from February to 18.26 million tonnes, data on the website of the Petroleum Planning and Analysis Cell (PPAC) showed, although imports were still down about 6.5% year on year. India’s annual crude imports fell nearly 13% in the fiscal year 2020/21 to 198.11 million tonnes, its lowest in six years as refiners cut crude processing as COVID-19 destroyed fuel demand, data compiled by Reuters showed.

The major Asian stock markets had a mixed day today:

NIKKEI 225 closed
Shanghai closed
Hang Seng decreased 139.16 points or -0.49% to 28,417.98
ASX 200 increased 27.90 points or 0.39% to 7,095.80
Kospi closed
SENSEX increased 424.04 points or 0.88% to 48,677.55
Nifty50 increased 121.35 points or 0.84% to 14,617.85

The major Asian currency markets had a mixed day today:

AUDUSD increased 0.00394 or 0.51% to 0.77515
NZDUSD increased 0.0051 or 0.71% to 0.72123
USDJPY decreased 0.12 or -0.11% to 109.20
USDCNY decreased 0.00002 or 0.00% to 6.48318

Precious Metals:

Gold increased 5.20 USD/t oz. or 0.29% to 1,783.68
Silver decreased 0.05 USD/t. oz or -0.19% to 26.480

Some economic news from last night:

Hong Kong:

Manufacturing PMI (Apr) decreased from 50.5 to 50.3

Australia:

Building Approvals (MoM) (Mar) decreased from 20.1% to 17.4%

Private House Approvals (Mar) decreased from 15.1% to 0.1%

AIG Construction Index (Apr) decreased from 61.8 to 59.1

Services PMI increased from 55.5 to 58.8

New Zealand:

GlobalDairyTrade Price Index decreased from -0.1% to -0.7%

Employment Change (QoQ) (Q1) remain the same at 0.6%

Labor Cost Index (YoY) (Q1) increased from 1.5% to 1.6%

Labor Cost Index (QoQ) (Q1) decreased from 0.5% to 0.4%

Participation Rate (Q1) increased from 70.20% to 70.40%

Unemployment Rate (Q1) decreased from 4.9% to 4.7%

ANZ Commodity Price Index (MoM) decreased from 6.1% to 2.3%

Some economic news from today:

India:

Nikkei Services PMI (Apr) decreased from 54.6 to 54.0

Singapore:

Retail Sales (MoM) (Mar) increased from -1.5% to 3.0%

Retail Sales (YoY) (Mar) increased from 5.3% to 6.2%

Indonesia:

GDP (YoY) (Q1) increased from -2.19% to -0.74%

GDP (QoQ) (Q1) decreased from -0.42% to -0.96%

EUROPE/EMEA:

Britain is exploring the creation of a national stockpile of so-called rare earth metals amid rising fears that country’s efforts to adopt electric cars are at risk from a Chinese stranglehold on supplies, The Telegraph reported on Wednesday. Officials at the Department for Business are discussing options to protect the United Kingdom’s access to vital materials including lithium and cobalt, the report added. Britain could build a national stockpile to avoid shortages, support attempts to create domestic sources such as potential lithium mines in Cornwall, or use its diplomatic network to secure supplies from abroad in partnership with private businesses.

A three-month survey conducted by the European Central Bank (ECB) has found that EU residents are most interested in having the proposed “digital euro” respect their privacy, more so than any other proposed features or services. The central bank digital currency (CBDC) plan seeks to create a freely accessible digital means of payment backed by the banking system, with talks beginning in mid-2020 and a decision on whether or not the project will go forward expected sometime this year. The CBDC survey asked 8,221 respondents from around the EU what they would most like to see in a digital euro design. Over a third of the respondents said that private payments were the most important item for them, and more than half of the respondents ranked it among their top two items. This even placed ahead of security, which ranked second among concerns with a little over 1/8 of respondents listing it as their top item and about 1/3 placing it in their top two.

The major Europe stock markets had a green day:

CAC 40 increased 87.72 points or 1.40% to 6,339.47
FTSE 100 increased 116.13 points or 1.68% to 7,039.30
DAX 30 increased 314.30 points or 2.12% to 15,170.78

The major Europe currency markets had a mixed day today:

EURUSD decreased 0.00098 or -0.08% to 1.20038
GBPUSD increased 0.00208 or 0.15% to 1.39106
USDCHF decreased 0.00047 or -0.05% to 0.91311

Some economic news from Europe today:

Norway:

Unemployment Rate (Dec) increased from 4.8% to 5.0%

House Price Index (YoY) (Apr) decreased from 12.50% to 12.20%

Swiss:

CPI (MoM) (Apr) decreased from 0.3% to 0.2%

CPI (YoY) (Apr) increased from -0.2% to 0.3%

Spain:

Spanish Unemployment Change increased from -59.1K to -39.0K

Spanish Services PMI (Apr) increased from 48.1 to 54.6

Spanish Consumer Confidence increased from 73.0 to 77.8

Italy:

Italian Composite PMI (Apr) decreased from 51.9 to 51.2

Italian Services PMI (Apr) decreased from 48.6 to 47.3

France:

French Markit Composite PMI (Apr) increased from 50.0 to 51.6

French Services PMI (Apr) increased from 48.2 to 50.3

Germany:

German Composite PMI (Apr) decreased from 57.3 to 55.8

German Services PMI (Apr) decreased from 51.5 to 49.9

Euro Zone:

Markit Composite PMI (Apr) increased from 53.2 to 53.8

Services PMI (Apr) increased from 49.6 to 50.5

PPI (MoM) (Mar) increased from 0.5% to 1.1%

PPI (YoY) (Mar) increased from 1.5% to 4.3%

US/AMERICAS:

US District Judge Friedrich of the District of Columbia overturned the Centers for Disease Control and Prevention (CDC) eviction moratorium. Landlords have long criticized the policy, saying that they cannot afford to continue housing tenants free of charge while being expected to pay their own mortgages and bills. Others questioned why the CDC was permitted to place a ban on evictions at all. In January, nearly 1 in 5 renters in the US were behind on rent payments. Those who advocated the moratorium said it was necessary to prevent a mass displacement of people. “It is the role of the political branches, and not the courts, to assess the merits of policy measures designed to combat the spread of disease, even during a global pandemic. The question for the Court is a narrow one: Does the Public Health Service Act grant the CDC the legal authority to impose a nationwide eviction moratorium? It does not,” the judge commented in her ruling.

President Joe Biden would like 70% of Americans to be vaccinated by July 4 (Independence Day). The Associated Press noted that reluctancy vaccinate has decreased demand and caused certain states to have over 50% of their available doses unordered, Biden insists that Americans “need to get vaccinated,” although there is no current mandate.

Mexico’s GDP fell 3.8% on an annualized basis, but grew 0.4% in the last quarter. Mexico’s central bank expects GDP to advance 4,5% in 2021. However, the central bank noted that the success of the economy will largely depend on curbing the coronavirus, which has been a problem for Latin America’s second-largest economy. Over 56% of Americans have had at lease one dose of a vaccination, and around 105 million Americans are fully vaccinated.

US Market Closings:

Dow advanced 97.18 points or 0.28% to 34,230.21
S&P 500 advanced 2.99 points or 0.07% to 4,167.65
Nasdaq declined 51.08 points or -0.37% to 13,582.42
Russell 2000 declined 6.92 points or -0.31% to 2,241.37

Canada Market Closings:

TSX Composite advanced 122.71 points or 0.64% to 19,310
TSX 60 advanced 8.01 points or 0.7% to 1,152.01

Brazil Market Closing:

Bovespa advanced 1,852.44 points or 1.57% to 119,564.44

ENERGY:

The oil markets had a green day today:

Crude Oil increased 0.86 USD/BBL or 1.31% to 66.5500
Brent increased 0.98 USD/BBL or 1.42% to 69.8600
Natural gas increased 0.004 USD/MMBtu or 0.13% to 2.9710
Gasoline increased 0.0259 USD/GAL or 1.20% to 2.1771
Heating oil increased 0.0283 USD/GAL or 1.42% to 2.0271

The above data was collected around 11:15 EST on Wednesday

Top commodity gainers: Heating Oil (1.42%), Brent (1.42%), Coffee (3.17%) and Rice (3.08%)
Top commodity losers: Zinc (-0.99%), Palladium (-0.54%), Oat (-0.68%), and Lumber (-0.45%)

The above data was collected around 11:30 EST on Wednesday.

BONDS:

Japan 0.0890%(-1bp), US 2’s 0.16%(-0.004%), US 10’s 1.5925%(+0.05bps); US 30’s 2.27%(+0.002%), Bunds -0.2310% (+1bp), France 0.134% (+1.3bp), Italy 0.8550% (+3.4bp), Turkey 17.64% (+3bp), Greece 0.977% (-2.8bp), Portugal 0.466% (+2.3bp); Spain 0.452% (+1.46bp) and UK Gilts 0.816% (+1.9bp).