Japan’s exports accelerated in January

Asia

Japan’s exports accelerated in January, led by a jump in Chinese demand, and manufacturers’ sentiment turned positive for the first time since 2019, signaling a gradual recovery from last year’s deep coronavirus slump. Ministry of Finance data showed on Wednesday exports rose 6.4% in January from a year earlier, roughly in line with a 6.6% increase seen by economists in a Reuters poll and following a 2.0% gain in December. Despite the upbeat indicators, analysts warn the recovery momentum in the world’s third-largest economy could stall as policymakers struggle to balance the need to contain the virus against the need to revive growth and fix Japan’s dire finances.

India is poised to clear some new investment proposals from China in the coming weeks as frosty relations between the two neighboring countries thawed amid an easing in border tensions, a major Indian daily reported. The foreign investment rule change by the Indian government said investments from an entity in a country that shares a land border with India would require government approval, markedly slowing investment flows from China. The rule change had put in limbo over 150 proposals from China worth more than $2 billion, hurting the plans of Chinese companies in India. Among the proposals delayed was China’s Great Wall Motors’ acquisition of a General Motors’ plant in India.

The major Asian stock markets had a mixed day today

• NIKKEI 225 decreased 175.56 points or -0.58% to 30,292.19.

• Shanghai closed.

• Hang Seng increased 338.28 points or 1.10% to 31,084.94.

• ASX 200 decreased 32.10 points or -0.46% to 6,885.20.

• Kospi decreased 29.52 points or -0.93% to 3,133.73.

• SENSEX decreased 400.34 points or -0.77% to 51,703.83.

• Nifty50 decreased 104.55 points or -0.68% to 15,208.90.

The major Asian currency markets had a mixed day today

• AUDUSD decreased 0.00074 or -0.10% to 0.77338.

• NZDUSD decreased 0.00199 or -0.28% to 0.71718.

• USDJPY decreased 0.25 or -0.23% to 105.84.

• USDCNY increased 0.01645 or 0.26% to 6.44494.

Precious metals

• Gold decreased 15.51 USD/t oz. or -0.86% to 1,778.80.

• Silver increased 0.126 USD/t. oz or 0.46% to 27.346.

Some economic news from last night

Japan:

Reuters Tankan Index (Feb) increased from -1 to 3.

Adjusted Trade Balance decreased from 0.51T to 0.39T.

Core Machinery Orders (YoY) (Dec) increased from -11.3% to 11.8%.

Core Machinery Orders (MoM) (Dec) increased from 1.5% to 5.2%.

Exports (YoY) (Jan) increased from 2.0% to 6.4%.

Imports (YoY) (Jan) increased from -11.6% to -9.5%.

Trade Balance (Jan) decreased from 749.6B to -323.9B.

South Korea

M2 Money supply (Dec) decreased from 8.40% to 8.30%.

Australia

MI Leading Index (MoM) increased from 0.1% to 0.3%.

Singapore

Non-Oil Exports (MoM) (Jan) increased from 4.80% to 7.00%.

Non-Oil Exports (YoY) (Jan) increased from 6.80% to 12.80%.

Trade Balance decreased from 6.200B to 5.610B.

Europe/EMEA

Britain’s coronavirus-ravaged economy suffered its biggest crash in output in more than 300 years in 2020 when it slumped by 9.9%, but it avoided heading back towards recession at the end of the year and looks on course for a recovery in 2021. Official figures showed gross domestic product (GDP) grew 1.0% from October through December, the top of a range of economists’ forecasts in a Reuters poll.

The major Europe stock markets had a negative day

• CAC 40 decreased 20.69 points or -0.36% to 5,765.84.

• FTSE 100 decreased 37.96 points or -0.56% to 6,710.90.

• DAX 30 decreased 155.33 points or -1.10% to 13,909.27.

The major Europe currency markets had a mixed day today

• EURUSD decreased 0.00504 or -0.42% to 1.20453.

• GBPUSD decreased 0.00359 or -0.26% to 1.38583.

• USDCHF increased 0.0051 or 0.57% to 0.89825.

Some economic news from Europe today

France

French Car Registration (MoM) (Jan) decreased from 47.8% to -32.2%.

French Car Registration (YoY) (Jan) increased from -11.8% to -5.8%.

Italy

Italian Car Registration (YoY) (Jan) increased from -14.9% to -14.0%.

Italian Car Registration (MoM) (Jan) increased from -13.7% to 12.2%.

Germany

German Car Registration (YoY) (Jan) decreased from 9.9% to -31.1%.

German Car Registration (MoM) (Jan) decreased from 7.3% to -45.5%.

UK

House Price Index (YoY) increased from 7.1% to 8.5%.

Car Registration (MoM) (Jan) decreased from 16.6% to -32.0%.

Car Registration (YoY) (Jan) decreased from -10.9% to -39.5%.

Core CPI (YoY) (Jan) remain the same at 1.4%.

Core CPI MoM (MoM) (Jan) decreased from 0.3% to -0.5%.

Core PPI Output (YoY) (Jan) increased from 1.1% to 1.4%.

Core PPI Output (MoM) (Jan) increased from 0.1% to 0.3%.

Core RPI (YoY) (Jan) increased from 1.4% to 1.6%.

Core RPI (MoM) (Jan) decreased from 0.6% to -0.3%.

CPI (MoM) (Jan) decreased from 0.3% to -0.2%.

CPI (YoY) (Jan) increased from 0.6% to 0.7%.

CPI, n.s.a (Jan) decreased from 109.20 to 109.00.

PPI Input (YoY) (Jan) increased from 0.6% to 1.3%.

PPI Input (MoM) (Jan) decreased from 1.2% to 0.7%.

PPI Output (YoY) (Jan) increased from -0.5% to -0.2%.

PPI Output (MoM) (Jan) increased from 0.2% to 0.4%.

RPI (MoM) (Jan) decreased from 0.6% to -0.3%.

RPI (YoY) (Jan) increased from 1.2% to 1.4%.

US/Americas

President Biden supports forgiving up to $10,000 in federal student loan debt in line with his campaign promise. However, Senate and House Democrats have encouraged the president to forgive up to $50,000, which he declined. Biden stated he did not believe the president even possessed the authority to forgive such a large amount of debt. Still, opposing party members argued that forgiving student loan debt would help the middle and lower classes who may have been encouraged to take out loans. Biden said in contrast that the loan forgiveness could end up favoring students who chose private or ivy league schools. America’s current federal student debt stands at $1.6 trillion.

Kevin O’Leary, Shark Tank TV personality and co-founder of O’Shares ETFs, stated that he took a bargain to invest along with Reddit’s popular forum, /r/WallStreetBets, to see if their new herd strategy could work. After investing $10,000 in the experiment, O’Leary claims was already up 5% from a seemingly unknown pharmaceutical stock. “They’re searching out situations that are over-shorted that have thin floats. They’re organizing the night before and they’re going after the stocks and in most cases, they’re driving them up.” However, when compared with the money earned through a robo-advisor account, O’Leary was behind. His comments come days before the SEC launches an investigation into the GameStop surge.

The Canada Revenue Agency (CRA) has blocked countless users from accessing their database, leaving many to wonder if there was a potential data breach. On Tuesday evening, Christopher Doody, a CRA media relations representative, tried to quell fears by calling the lockout a “security precaution in the context of ongoing investigative work, and is not due to a cyber security breach of CRA systems.”

Home sales in Canada rose 35.2% YoY in January, according to new data from the Canadian Real Estate Association. Home prices are up 22.8% YoY, with the average house selling for C$621,525. Single-family homes were particularly in demand and rose 17.4% YoY, and 2.6% MoM. Apartment living rose slightly MoM by 0.2%, but declined -3.3% on a YoY basis.

US market closings

• Dow advanced 90.27 points or 0.29% to 31,613.02.

• S&P 500 declined -1.28 points or -0.03% to 3,931.31.

• Nasdaq declined 82 points or -0.58% to 13,965.5.

• Russell 2000 declined 16.78 points or -0.74% to 2,256.11.

Canada market closings

• TSX Composite declined 117.94 points or -0.64% to 18,374.78.

• TSX 60 declined 5.8 points or -0.53% to 1,091.68.

Brazil market closing

• Bovespa advanced 927.07 points or 0.78% to 120,355.79.

Energy

The oil markets had a green day today

• Crude Oil increased 0.41 USD/BBL or 0.68% to 60.4600.

• Brent increased 0.58 USD/BBL or 0.92% to 63.9300.

• Natural gas increased 0.18 USD/MMBtu or 5.75% to 3.3080.

• Gasoline increased 0.0291 USD/GAL or 1.64% to 1.8020.

• Heating oil increased 0.0099 USD/GAL or 0.55% to 1.8243.

• Top commodity gainers: Natural Gas (5.75%), Gasoline (1.64%), Palm Oil (2.21%) and Rubber (1.78%).

• Top commodity losers: Coal (-2.14%), Orange Juice (-1.67%), Cocoa (-1.64%), and Wheat (-2.78%).

The above data was collected around 13:00 EST on Wednesday.

Bonds

Japan 0.10%(+2bp), US 2’s 0.11%(-0.012%), US 10’s 1.28%(-2bps); US 30’s 2.05%(-0.039%), Bunds -0.35% (+3bp), France -0.11% (+1bp), Italy 0.60% (+3bp), Turkey 12.86% (+12bp), Greece 0.82% (+5bp), Portugal 0.20% (+1bp); Spain 0.30% (+6bp) and UK Gilts 0.57% (-5bp).

• German 30-Year Bund Auction increased from -0.130% to 0.100%.