Morning Recap Friday 11 February 2022
Global Markets Update
U.S. MARKETS
Equity markets closed lower overnight, with the S&P 500 down -1.8%. NASDAQ down -2.1% and Dow Jones declining -1.5%, after Fed Bank of St. Louis President James Bullard said he supported raising rates by a full percentage point by July. As data revealed inflation accelerated to a four-decade high in January with CPI increasing +7.5% yoy and core-CPI rising +6% yoy, most since 1982.
Long-dated U.S. treasury yields were higher, with the 2-Yr yield at 1.611% and the 10-Yr yield at 2.050%.
EUROPEAN MARKETS
European equity markets closed mostly higher overnight, with Stoxx Europe 600 down -0.2%, U.K. FTSE 100 up +0.4% and German DAX gaining +0.1%. EU downgraded euro-area GDP forecast for 2022 by -30bps to +4% and upgraded 2023 forecast by +30bps to 2.7%. Predicting that all member-states will have reached pre-pandemic levels of GDP by the end of 2022. While upgrading CPI forecast for 2022 by +130bps to 3.5% and 2023 forecast by +30bps to 1.3%, below ECB’s 2% target.
ASIAN MARKETS
Asian equity markets closed higher overnight, with the Shanghai Composite up +0.2%, after data revealed China’s credit growth accelerated in January with financial institutions offering 3.98 trillion yuan of new loans in the month, the highest in data going back to 1992, leading to aggregate financing of 6.17 trillion yuan. The Hang Seng was up +0.4% and KOSPI gained +0.1%. Nikkei 225 gained +0.4%. After BOJ reaffirmed its commitment to its stimulus framework, offering to buy unlimited amount of 10-year bonds at 0.25%. RBI stuck to its dovish tone to ensure an economic recovery in a surprise move, predicting GDP growth slowing to 7.8% in FY22 from a world-beating 9.2% estimated by the government and lowering the inflation outlook to 4.5% for FY23 from 5.3% in FY22.
WTI oil is trading at US$90.00 a barrel, after OPEC said the recovery in global oil demand could surpass its forecasts this year. Growing by more than the 4.2m barrels a day. Iron ore price is at US$137.50 per ton. Spot gold is trading at US$1,827 per oz.
