Good Friday 2022 Brings Many Market Closures and a Focus on Russia and China
April 15, 2022
A great many markets will not be trading today, including those in the U.K., Germany, France, Italy, Spain, Switzerland, Australia, New Zealand, Hong Kong, Singapore, India, Canada, and the United States.
Some U.S. economic data are being reported later, however, such as industrial production, capacity utilization, the Empire State monthly manufacturing survey, and Treasury-compiled international capital flows.
The dollar is very firm this Good Friday, with overnight gains of 0.5% against the Japanese yen and 0.2% versus the Turkish lira. The DXY weighted dollar index is also 0.2% above yesterday’s closing level and just 0.2% below 23-month high touched Thursday on an intra-day basis.
Share prices closed lower today by 1.4% in Taiwan, 0.8% in South Korea, 0.5% in China, and 0.3% in Japan. There will be no stock market trading in the United States today, but the S&P 500 and Nasdaq still managed to lose 2.1% and 2.6% in this shortened week.
Russia remains in the spotlight. The full capture of the Ukrainian city of Mariupol appears close, but the sinking of the missile cruiser Moskva in the Black Sea constitutes a big tactical accomplishment for Ukrainian forces. Analysts at Moody’s claim that Russian is in danger of defaulting on foreign currency-denominated debt, which if so would be the first time that’s happened since the Russian Revolution over a century ago.
As a close ally of Russia and plagued with its own problems of late, China’s government is in a quandary over Russia’s fall from international favor. The slide in world growth expectations has been mainly attributable to the spike in inflation and resultant rise of interest rates, but a secondary factor of considerable importance has been a largely policy-induced slowdown in Chinese economic activity. President Xi wants Russia to win its conflict with Ukrainian as an example that could pave the way for China to seize political authority over Taiwan, but by siding with Moscow, China too may invite tighter economic sanctions. Equally problematic, Xi’s full-court crackdown on Covid has diminished economic activity.
The People’s Bank of China in response announced a cut in bank reserve requirements by 25-50 basis points that is supposed to inject over CNY 500 billion of liquidity into the banking system. Reserve requirements had be sliced previously in December. Meanwhile, Chinese property price data out today revealed a zero percent month-on-month change for a second consecutive month and the lowest 12-month rate of increase (1.5%) in 76 months.
As has been the case almost every day, the Good Friday brought some unfavorable inflation news.
- Polish consumer price inflation in March was revised marginally higher to show month-on-month and year-on-year price increases of 3.3% and 11.0%. Polish CPI inflation had been at 8.6% last December and 3.2% in March 2021.
- Italian CPI inflation in March was revised marginally lower but, at 6.5%, was at a 368-month high anyway.
- French CPI inflation accelerated from 1.1% in March 2021 to a 435-month high of 4.5% in March 2022, according to revised figures.
Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Peoples Bank of China, Russia facing possible debt default
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