Morning Recap Wednesday 26 January 2022
Global Markets Update
U.S. MARKETS
Equity markets closed lower overnight, with the S&P 500 down -1.2%, Dow Jones down -0.2% and NASDAQ down -2.3%. IMF cut its world economic growth forecast for 2022 by -50bps to +4.4% (increased forecast for 2023 to 3.8%). Citing weaker prospects for the U.S. (downgraded by -120bps to 4% on the outlook for President Joe Biden’s spending agenda). And China (downgraded by -80bps to 4.8% on challenges in real estate) along with persistent inflation. With annual inflation rate projected to average 3.9% in advanced economies in 2022, up from a prior 2.3% estimate, and 5.9% in emerging and developing nations. And projected total economic losses from pandemic to total $13.8 trillion through 2024.
Long-dated U.S. treasury yields were higher, with the 2-Yr yield at 1.029% and the 10-Yr yield at 1.778%.
EUROPEAN MARKETS
European equity markets closed higher overnight, with the Stoxx Europe 600 up +0.7% and U.K. FTSE 100 up +1.0%, following the news Pfizer Inc and BioNTech SE are starting a study of a Covid-19 vaccine that targets the omicron variant. German DAX gained +0.8%. After data revealed Germany’s business confidence improved in January. As supply bottlenecks ease and the latest virus wave is only seen as a temporary setback for the recovery.
ASIAN MARKETS
Asian equity markets closed lower overnight, with both the Shanghai Composite and KOSPI down -2.6%. And both Hang Seng and Nikkei 225 declining -1.7%, as rising geopolitical tension rattled sentiment, with the U.S. putting troops on heightened alert for deployment to bolster NATO forces in Eastern Europe. South Korea’s economic recovery showed its resilience in the face of interest rate hikes. Expanding +4.1% yoy (+1.1% qoq) in 4Q21 supported by firm export demand.
WTI oil is trading at US$85.31 a barrel. Iron ore price is at US$124.92 per ton. Spot gold is trading at US$1,848 per oz.
