Stock Market Interference
February 21, 2024
China’s government introduced a new weapon to prop of their stock market, a ban on net selling at daily market openings and closings. The Hang Seng and Shanghai composite indices consequently closed up 1.6% and 1.0%, but stock market indices in Singapore, Australia, India, Thailand and Japan closed down by 0.8%, 0.7%, 0.6%, 0.4% and 0.3%. In Europe, share prices have thus far risen on the continent but are down 0.8% in the U.K., and U.S. stock futures are also lower, led by a 4.4% downward correction in Nvidia ahead of today’s earnings announcement from that company.
There hasn’t been much net movement in the dollar, which is unchanged versus the yen, up 0.1% relative to the euro, loonie and sterling, and down 0.1% versus the Swiss franc.
Bitcoin has taken a 2.1% hit, and oil has dropped 0.5%. Gold is unmoved.
Overnight movements in 10-year sovereign debt yields range from plus two basis pints in the U.K. to minus two basis points in the United States and include a basis point dip in Japan and an uptick of one basis point in Germany.
The 30-year U.S. fixed mortgage rate leaped 19 basis points last week to a 10-week high of 7.06%, causing mortgage applications to plunge 10.6% on top of a 2.3% slide in the prior week.
On the data release front, investors learned of a 0.2 percentage point rise to 5.3% in South African consumer price inflation last month. Such remains above the South African Reserve Bank’s target mid-point of 4.5% and the low of 4.7% touched last July.
New Zealand producer prices jumped 0.9% between the third and fourth quarters of 2023, and South Korean producer price inflation clocked in at a 4-month high of 1.3% in January, which is still well below the 10.0% peak in mid-2022. Latvian producer prices went up 0.5% on month in January, resulting in a smaller year-on-year decrease of 8.1% after December’s more than two-decade drop of 11.3%.
Japan non-seasonally adjusted trade deficit in January of 1.758 trillion yen was smaller than forecast and only half the sized of the January 2023 deficit of JPY 3.5 trillion. Exports grew almost 12%, juxtaposed against an import decline of nearly 10%. Seasonal factors affecting the Japanese trade balance are more negative in January than any other month of the year, so that when adjusting for such distortions, Japan had its first trade surplus (235 billion yen) in 33 months.
The orders index in the monthly British industrial trends survey improved ten points to a five month high in February but at -20 was only midway between January’s reading of -30 and last July’s 7-month high of -9.
Australia’s wage price index rose 0.9% last quarter, lifting its year-on-year advance to a 59-quarter high of 4.2%. That compares to 3.3% in the final quarter of 2022, 2.4% in 4Q 2021, and a record low of 1.4% in 4Q 2020.
Car sales in the euro area began this year with a 12.1% year-on-year increase, most in 3 months.
Consumer confidence in February weakened to a 4-month low in Belgium and a 2-month low in Turkey but improved to a 24-month high in Denmark.
Mexican retail sales in December underwhelmed analyst expectations by a wide margin, falling 0.9% on month and recording the first on-year drop (0.2%) in 34 months.
As expected, the key central bank rate in Indonesia was left unchanged at 6.0% at this month’s review. It’s been there since the second of two 25-basis point hikes last year was done in October. There had previously been two percentage points of tightening administered over the final five months of 2022. The rate had been 3.50% from February 2021 to August 2022. In extending the current rate level by at least another month, officials expressed slightly more optimism in the outlook for exports but feel the existing policy will also help promote a stable exchange rate and in-target inflation. 2.6% CPI inflation as of January was near the center of the 1.5-3.5% target range.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Bank Indonesia, Japanese trade balance, Mexican retail sales, South Africa CPI
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