ASIA:

China’s official index of manufacturing purchasing managers slipped to 50.8 in April from 52.0 in March, the National Bureau of Statistics said. Pandemic triggered recessions around the world have made Chinese manufacturers pessimistic about export demand.

Cui Tiankai, China’s ambassador to the United States, has said the two countries need to look beyond the pandemic controversy and undertake “a serious rethinking of the very foundations of this important relationship.” The announcement comes after US President Trump announced he will be launching an investigation into China’s handling of the coronavirus.

Indian investors are quickly moving their cash into the safety of bank deposits after the shock closure of some high-profile domestic funds investing in high-yielding debt. Bankers told Reuters they saw heavy inflows into their traditional deposit schemes after one of India’s most prominent mutual fund houses in fixed income, Franklin Templeton Mutual Fund, said last week it was shutting down six credit funds.

Nine lobbying groups, including the US Chamber of Commerce, have urged India to delay a new digital tax that will hit firms such as Facebook and Google as they are battling the fallout of the coronavirus. From April 1, India imposed a new 2% tax on foreign billings or transactions where companies take payment abroad for digital services provided in India. The tax also applies to foreign e-commerce transactions on sites such as Amazon.com.

Prime Minister Lee Hsien Loong said Singapore can only relax its partial lockdown measures and progressively restart its economy after the city-state brings down the number of new coronavirus cases. Lee warned of “significant structural changes” to the economy are likely even after the virus abates.

The major Asian stock markets had a green day today:

  • NIKKEI 225 increased 422.50 points or 2.14% to 20,193.69
  • Shanghai increased 37.64 points or 1.33% to 2,860.08
  • Hang Seng closed
  • ASX 200 increased 129.00 points or 2.39% to 5,522.40
  • Kospi closed
  • SENSEX increased 997.46 points or 3.05% to 33,717.62

The major Asian currency markets had a mixed day today:

  • AUDUSD decreased 0.00161 or -0.25% to 0.65396
  • NZDUSD increased 0.00158 or 0.26% to 0.61573
  • USDJPY increased 0.39 or 0.37% to 106.98
  • USDCNY decreased 0.0085 or -0.12% to 7.06318

Precious Metals:

  • Gold decreased 22.50 USD/t oz. or -1.31% to 1,692.20
  • Silver decreased 0.34 USD/t. oz or -2.20% to 14.9450

Some economic news from last night:

China:

Caixin Manufacturing PMI (Apr) decreased from 50.1 to 49.4

Chinese Composite PMI (Apr) increased from 53.0 to 53.4

Manufacturing PMI (Apr) decrease from 52.0 to 50.8

Non-Manufacturing PMI (Apr) increased from 52.3 to 53.2

Singapore:

Bank Lending (Mar) decreased from 692.8B to 692.4B

Japan:

Industrial Production (MoM) (Mar) decreased from -0.3% to -3.7%

Industrial Production forecast 1m ahead (MoM) (Apr) increased from -5.3% to 1.4%

Industrial Production forecast 2m ahead (MoM) (May) decreased from 7.5% to -1.4%

Retail Sales (YoY) (Mar) decreased from 1.6% to -4.6%

New Zealand:

ANZ Business Confidence (Apr) decreased from -63.5 to -66.6

NBNZ Own Activity (Apr) decreased from -26.7% to -55.1%

Australia:

Export Price Index (QoQ) (Q1) increased from -5.2% to 2.7%

Housing Credit (Mar) remain the same at 0.3%

Import Price Index (QoQ) (Q1) decreased from 0.7% to -1.0%

Private Sector Credit (MoM) (Mar) increased from 0.5% to 1.0%

Some economic news from today:

Japan:

Household Confidence (Apr) decreased from 30.9 to 21.6

Housing Starts (YoY) (Mar) increased from -12.3% to -7.6%

Construction Orders (YoY) (Mar) decreased from 0.7% to -14.3%

Singapore:

Business Expectations (Q1) decreased from 12.00 to -56.00

Indonesia:

M2 Money Supply (YoY) (Mar) increased from 7.90% to 12.10%

Loans (YoY) (Mar) increased from 5.93% to 7.95%

India:

Infrastructure Output (YoY) (Mar) decreased from 5.5% to -6.5%

EUROPE/EMEA:

The European economy has witnessed its worst contraction since records began in 1995 during the first quarter this year. The initial data shows that the EU’s GDP was reduced by 3.5% against the last quarter of 2019. Individual countries, like France, suffered a decline of 5.8% in the first quarter. The IMF expects a decline of 7% this year for the EU as a whole.

The UK is having a quarrel with the EU over access to the UK waters. The chief negotiator for the EU has said that the EU will not agree on a trade deal with the UK unless they create a balanced, sustainable, and long-term solution on fisheries. The UK, however, is holding a hard line over rights to access their waters.

The European Commission has said that they will look at ways to boost tourism within the EU after the pandemic is over. Member states have been advised to open borders as soon as possible to save the tourism industry.

The Irish government has supported the EU in their battle with the UK over having an EU office in Belfast, after calling the prospect of an office “logical.”

The major Europe stock markets had a negative day today:

  • CAC 40 decreased 98.93 points or -2.12% to 4,572.18
  • FTSE 100 decreased 214.04 points, or -3.50% to 5,901.21
  • DAX 30 decreased 246.10 points or -2.22% to 10,861.64

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00657 or 0.60% to 1.09437
  • GBPUSD increased 0.01235 or 0.99% to 1.25978
  • USDCHF decreased 0.00705 or -0.72% to 0.96690

Some economic news from Europe today:

France:

French GDP (QoQ) (Q1) decreased from -0.1% to -5.8%

French Consumer Spending (MoM) (Mar) decreased from -0.5% to -17.9%

French CPI (YoY) decreased from 0.7% to 0.4%

French CPI (MoM) remain the same at 0.1%

French HICP (MoM) remain the same at 0.1%

French HICP (YoY) decreased from 0.8% to 0.5%

French PPI (MoM) (Mar) decreased from -0.9% to -1.7%

Germany:

German Retail Sales (MoM) (Mar) decreased from 0.8% to -5.6%

German Retail Sales (YoY) (Mar) decreased from 6.5% to -2.8%

German Unemployment Change (Apr) increased from 1K to 373K

German Unemployment Rate (Apr) increased from 5.0% to 5.8%

German Unemployment (Apr) increased from 2.266M to 2.639M

German Unemployment n.s.a. (Apr) increased from 2.335M to 2.644M

Norway:

Credit Indicator (YoY) (Mar) decreased from 4.9% to 4.7%

Central Bank Currency Purchase (May) decreased from -2,000.0M to -2,100.0M

Unemployment Rate n.s.a. (Apr) decreased from 10.40% to 9.60%

Swiss:

Retail Sales (YoY) (Mar) decreased from 0.3% to -5.6%

KOF Leading Indicators (Apr) decreased from 91.7 to 63.5

Spain:

Spanish CPI (MoM) increased from -0.4% to 0.3%

Spanish CPI (YoY) decreased from 0.0% to -0.7%

Spanish GDP (YoY) (Q1) decreased from 1.8% to -4.1%

Spanish GDP (QoQ) (Q1) decreased from 0.4% to -5.2%

Spanish HICP (YoY) (Apr) decreased from 0.1% to -0.6%

Spanish HICP (MoM) decreased from 0.6% to 0.4%

Spanish Current account (Feb) increased from -1.73B to 1.33B

Italy:

Italian Monthly Unemployment Rate (Mar) decreased from 9.3% to 8.4%

Italian CPI (MoM) (Apr) remain the same at 0.1%

Italian CPI (YoY) (Apr) decreased from 0.1% to 0.0%

Italian HICP (MoM) (Apr) decreased from 2.2% to 0.5%

Italian HICP (YoY) (Apr) remain the same at 0.1%

Italian GDP (QoQ) (Q1) decreased from -0.3% to -4.7%

Italian GDP (YoY) (Q1) decreased from 0.1% to -4.8%

Euro Zone:

Core CPI (MoM) decreased from 1.1% to 0.8%

Core CPI (YoY)  decreased from 1.0% to 0.9%

CPI (YoY) (Apr)  decreased from 0.7% to 0.4%

CPI (MoM) decreased from 0.5% to 0.3%

CPI, n.s.a (Apr) increased from 105.13 to 105.48

GDP (QoQ) decreased from 0.1% to -3.8%

HICP ex Energy & Food (YoY) (Apr) decreased from 1.2% to 1.1%

Unemployment Rate (Mar) increased from 7.3% to 7.4%

Deposit Facility Rate (Apr) remain the same at -0.50%

ECB Marginal Lending Facility remain the same at 0.25%

ECB Interest Rate Decision (Apr) remain the same at 0.00%

US/AMERICAS:

Over 30.3 million Americans have lost their livelihoods over the past six weeks, according to new data released by the Labor Department this Thursday. New unemployment filings reached 3.84 million last week due to the coronavirus crisis impacting nearly every business sector. The crisis in unemployment is now more apparent than ever; in contrast, 8.7 million jobs were lost during the Great Recession. Yesterday, Federal Reserve Chairman Jerome Powell said he expects the unemployment rate for April to spike to around 10% compared to the pre-pandemic historically low level of 3.5%.

Rising unemployment and uncertainty has led to a drastic decrease in consumer spending, as we reported yesterday, which composes two-thirds of US GDP. Chairman Powell stated that he sees consumer spending continually declining and called the current situation the worst crisis he has seen in his lifetime. A few weeks ago, former Fed Chairman Janet Yellen said that a sharp V-shaped recovery was possible, but feared the rebound could come in a slower U-shaped formation if not worse. Current Chairman Powell stated this week that even a W-shaped recovery could be overly optimistic. “We’re going to see economic data for the second quarter that’s worse than any data we’ve ever seen,” Powell warned.

The Federal Reserve is continuing to purchase mortgage-backed securities. The central bank purchased an additional $38.461 billion this week, according to Reuters, after purchasing $59.909 billion worth of securities the week prior.

“Life must go on,” stated Quebec premier François Legault stated after reiterating the decision to open elementary schools in the region. Quebec suffered more coronavirus-related cases than any other region of Canada, after losing 1,859 citizens and confirming 27,538 cases. This accounts for nearly half the death toll in the area as a whole. Still, certain indicators are showing that the curve is beginning to flatten in Canada.

US Market Closings:

  • Dow declined 288.14 points or -1.17% to 24,345.72
  • S&P 500 declined 27.08 points or -0.92% to 2,912.43
  • Nasdaq declined 25.16 points or -0.28% to 8,889.55
  • Russell 2000 declined 50.1 points or -3.68% to 1,310.66

Canada Market Closings:

  • TSX Composite declined 447.37 points or -2.94% to 14,780.74
  • TSX 60 declined 28.65 points or -3.11% to 891.63

Brazil Market Closing:

  • Bovespa declined 2,664.91 points or -3.2% to 80,505.89

ENERGY:

Norway has announced that it will reduce its output of oil by 250,000 barrels per day, which will leave production at 134,000 bpd for the remainder of 2020. Brent and WTI rose sharply today, with both the oils moving up in excess of 10% at the time of writing.

The oil markets had a mixed day today:

  • Crude Oil increased 2.37 USD/BBL or 15.74% to 17.4300
  • Brent increased 2.59 USD/BBL or 11.49% to 25.1300
  • Natural gas increased 0.016 USD/MMBtu or 0.85% to 1.8920
  • Gasoline decreased 0.0244 USD/GAL or -3.18% to 0.7435
  • Heating oil increased 0.0139 USD/GAL or 1.75% to 0.8076

The above data was collected around 13.03 EST on Thursday.

  • Top commodity gainers: Crude Oil (15.74%), Ethanol (6.50%), Brent (11.49%), and Sugar (4.00%)
  • Top commodity losers: Gasoline (-3.18%), Silver (-2.20%), Cotton (-4.07%), and Cheese (-1.91%)

The above data was collected around 13.06 EST on Thursday.

BONDS:

Japan -0.03%(+2bp), US 2’s 0.18% (-2bps), US 10’s 0.58%(-4bps); US 30’s 1.23%(-1bps), Bunds -0.58% (-10bp), France -0.10% (-7bp), Italy 1.78% (+1bp), Turkey 11.46% (-15bp), Greece 2.17% (-1bp), Portugal 0.84% (-8bp); Spain 0.75% (-5bp) and UK Gilts 0.22% (-6bp).

  • US 4-Week Bill Auction increased from 0.090% to 0.095%
  • US 8-Week Bill Auction decreased from 0.120% to 0.095%

Investment and financial consultancy services are offered on behalf of Armstrong Economics. PEI does NOT provide personal guided advice for any individuals regardless of residency or nationality. PEI provides forecasting based upon objective computer models in most leading financial centers worldwide through its affiliates and/or representative arrangements. The information provided is believed to be reliable, however accuracy and completeness are not guaranteed. This information is offered to professional investors and institutions. PEI does trade on a proprietary basis in selected markets around the world. PEI accepts NO managed accounts on behalf of any individuals no matter the country of residence or origin. PEI predominantly engages in hedging contracts and currency overlay business on behalf of business and institutions. Individuals seeking to use the forecasting services of PEI should seek the advice of professionals, as appropriate, regarding the evaluation of any specific information, opinion, advice or other content relative to their personal financial investment situation. Keep in mind that a forecast in the local currency of that instrument may prove to be correct but a swing in the underlying currency can make that same forecast dangerous to someone investing in a different currency.

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