Market Talk - Tuesday, Jan. 18

ASIA:

India’s annual wholesale price-based inflation eased marginally in December to 13.56% but remained in double digits for a ninth successive month, reflecting rising input costs for firms, many of which are steadily passing on costs to consumers. December’s figure was marginally lower from the previous month’s 14.23%, which was the highest in more than a decade, government data showed on Friday. Rising input costs for products such as fuel, metals and chemicals have pushed up wholesale prices, a proxy for producers’ prices, in recent months, while headline retail inflation is hovering around 5%, still within the 2%-6% target of the Reserve Bank of India (RBI). The RBI left the benchmark repo rate unchanged at 4.0% for a ninth consecutive meeting last month as economic growth remains a challenge amid rising COVID-19 cases. Consumer price-based inflation, the main gauge monitored by the monetary policy committee of RBI, rose to a five-month high of 5.59% in December from the corresponding month last year, from November’s 4.91%, separate data showed on last Wednesday.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 76.27 points or -0.27% to 28,257.25
  • Shanghai increased 28.25 points or 0.80% to 3,569.91
  • Hang Seng decreased 105.25 points or -0.43% to 24,112.78
  • ASX 200 decreased 8.50 points or -0.11% to 7,408.80
  • Kospi decreased 25.86 points or -0.89% to 2,864.24
  • SENSEX decreased 554.05 points or -0.90% to 60,754.86
  • Nifty50 decreased 195.05 points or -1.07% to 18,113.05

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.003 or -0.42% to 0.71784
  • NZDUSD decreased 0.00328 or -0.48% to 0.67609
  • USDJPY increased 0.01 or 0.01% to 114.61
  • USDCNY increased 0.0087 or 0.14% to 6.36052

Precious Metals:

  • Gold decreased 5.9 USD/t oz. or -0.32% to 1,813.09
  • Silver increased 0.44 USD/t. oz or 1.91% to 23.440

Some economic news from last night:

Japan:

Capacity Utilization (MoM) (Nov) increased from 6.2% to 8.0%

Industrial Production (MoM) (Nov) increased from 1.8% to 7.0%

New Zealand:

NZIER Business Confidence (Q4) decreased from-11% to -28%

NZIER QSBO Capacity Utilization (Q4) decreased from96.1% to 89.5%

Some economic news from today

Hong Kong:

Unemployment Rate (Dec) decreased from 4.1% to 3.9%

New Zealand:

GlobalDairyTrade Price Index increased frmo 0.3% to 4.6%

EUROPE/EMEA:

The UK economy grew to above its pre-pandemic level for the first time in November, supported by increasing momentum across all industries before the Omicron coronavirus variant hit the country. Output rose 0.9 percent between October and November, accelerating strongly from near-stagnation in the previous month, according to data from the Office for National Statistics. This was much higher than the 0.4 percent forecast by economists polled by Reuters and the highest rate since June. The increase took gross domestic output, or GDP, to 0.7 percent above its level in February 2020, before the first Covid-19 restrictions, indicating that the economy had fully recovered the ground lost during the pandemic. Services, which account for about 80 percent of the economy, grew 0.7 percent, supported by strong growth in professional, scientific and technical activities. The retail, courier and warehousing sectors also expanded, driven by stronger than usual Black Friday sales and the build-up to Christmas. Accommodation, arts, and entertainment all performed well.

The major Europe stock markets had a negative day:

  • CAC 40 decreased 67.81 points or -0.94% to 7,133.83
  • FTSE 100 decreased 47.68 points or -0.63% to 7,563.55
  • DAX 30 decreased 161.16 points or -1.01% to 15,772.56

The major Europe currency markets had a mixed day today:

  • EURUSD decreased 0.00793 or -0.70% to 1.13280
  • GBPUSD decreased 0.006 or -0.44% to 1.35871
  • USDCHF increased 0.00286 or 0.31% to 0.91695

Some economic news from Europe today:

UK:

Average Earnings ex Bonus (Nov) decreased from 4.3% to 3.8%

Average Earnings Index +Bonus (Nov) decreased from 4.9% to 4.2%

Car Registration (YoY) (Dec) decreased from 1.7% to -18.2%

Car Registration (MoM) (Dec) decreased from8.9% to -6.1%

Claimant Count Change (Dec) increased from -95.1K to -43.3K

Employment Change 3M/3M (MoM) (Nov) decreased from 149K to 60K

Unemployment Rate (Nov) decreased from4.2% to 4.1%

Italy:

Italian Car Registration (MoM) (Dec) decreased from 3.4% to -17.0%

Italian Car Registration (YoY) (Dec) decreased from -24.6% to -27.5%

Italian Trade Balance increased from3.891B to 4.163B

Italian Trade Balance EU decreased from0.29B to -0.06B

Germany:

German Car Registration (MoM) (Dec) increased from 11.0% to 14.8%

German Car Registration (YoY) (Dec) increased from -31.7% to -26.9%

German ZEW Current Conditions (Jan) decreased from-7.4 to -10.2

German ZEW Economic Sentiment (Jan) increased from29.9 to 51.7

France:

French Car Registration (MoM) (Dec) increased from 2.9% to 29.6%

French Car Registration (YoY) (Dec) decreased from -3.2% to -15.1%

Swiss:

PPI (YoY) (Dec) decreased from 5.8% to 5.1%

PPI (MoM) (Dec) decreased from 0.5% to -0.1%

Euro Zone:

ZEW Economic Sentiment (Jan) increased from 26.8 to 49.4

US/AMERICAS:

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) reported that builder confidence declined one point to 83 this January. The index’s current sales conditions remained unchanged at 90, while future sales fell two points to 83, and buyer traffic dropped 2 points to 69. As building costs have increased over 19% since December 2020, higher material costs have led to lengthier home-building projects. “While lean existing home inventory and solid buyer demand are supporting the need for new construction, the combination of ongoing increases for building materials, worsening skilled labor shortages and higher mortgage rates point to declines for housing affordability in 2022,” said Robert Dietz, NAHB’s chief economist.

Microsoft MSFT announced plans to acquire gaming company Activision Blizzard ATVI in a $68.7 billion cash deal. After announcing that they plan to pay $95 per share, Activision shares soared nearly 30% in early trading. This is Microsoft’s largest purchase after acquiring LinkedIn for $26.2 billion in 2016.

US Market Closings:

  • Dow declined 543.34 points or -1.51% to 35,368.47
  • S&P 500 declined 85.74 points or -1.84% to 4,577.11
  • Nasdaq declined 386.86 points or -2.6% to 14,506.9
  • Russell 2000 declined 66.23 points or -3.06% to 2,096.23

Canada Market Closings:

  • TSX Composite declined 262.88 points or -1.22% to 21,274.57
  • TSX 60 declined 16.49 points or -1.26% to 1,296.06

Brazil Market Closing:

  • Bovespa advanced 293.79 points or 0.28% to 106,667.66

ENERGY:

The oil markets had a mixed day today:

  • Crude Oil increased 0.9 USD/BBL or 1.07% to 85.1700
  • Brent increased 0.8 USD/BBL or 0.93% to 87.2800
  • Natural gas increased 0.04 USD/MMBtu or 0.94% to 4.3070
  • Gasoline decreased 0.0025 USD/GAL or -0.10% to 2.4290
  • Heating oil increased 0.0033 USD/GAL or 0.12% to 2.6709

The above data was collected around 14:07 EST on Tuesday

  • Top commodity gainers: Wheat (3.23%) and Lumber (3.36%), Methanol (5.52%), Zinc (2.28%)
  • Top commodity losers: Feeder Cattle (-0.58%), Cocoa (-0.56%), Soybeans (-0.68%), and Copper (-0.82%)

The above data was collected around 14:15 EST on Tuesday.

BONDS:

Japan 0.151%(+0.7bp), US 2’s 1.0282% (+0.02%), US 10’s 1.8466% (+3.4bps); US 30’s 2.1715% (+0.03%), Bunds -0.003% (+2.3bp), France 0.381% (+2.3bp), Italy 1.398% (+3.3bp), Turkey 22.08% (-6bp), Greece 1.649% (+4.4bp), Portugal 0.616% (+3bp); Spain 0.683% (+1.8bp) and UK Gilts 1.217% (+2.8bp).

Disclosure: None.

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