Morning Recap Friday 14 January 2022

Global Markets Update    



Equity markets closed lower overnight, with the S&P 500 down -1.4%, NASDAQ down -2.5% and Dow Jones declining -0.5%. Applications for U.S. state unemployment insurance rose unexpectedly for a second consecutive week to the highest in two months with initial unemployment claims increasing 23k to 230k in the week ended January 8. Prices paid to U.S. producers decelerated in December with PPI increasing +0.2% MoM. As two key drivers of inflation in 2021, food and energy, declined from a month earlier.

Long-dated U.S. treasury yields were lower, with the 2-Yr yield at 0.891% and the 10-Yr yield at 1.694%.


European equity markets closed mostly higher overnight, with the Stoxx Europe 600 flat, German DAX up +0.1% and U.K. FTSE gaining +0.2%. The World Bank predicted global economic growth is poised to slow down to 4.1% in 2022 and further to 3.2% in 2023, down from 5.5% in 2021, marking the sharpest slowdown since at least the 1970s, amid the effects of the omicron variant, supply-chain disruptions, labor shortages and the winding down of government economic support, with growth in advanced economies declining from 5% in 2021 to 3.8% in 2022 and 2.3% in 2023 with U.S. growth expected to slow to 3.7% and 2.6% in 2022 and 2023, respectively from 5.6% in 2021, and growth in emerging and developing economies to fall from 5.3% in 2021 to 4.6% in 2022 and 4.4% in 2023 with China slowing to 5.1% and 5.3% in 2022 and 2023, respectively from 8% in 2021.


Asian equity markets closed mostly lower overnight. With the Shanghai Composite down -1.2%, Hang Seng up +0.1% and KOSPI down -0.3%. Nikkei 225 declined -1.0%. Following the news Tokyo is set to raise its coronavirus alert to the second-highest level on a four-tier system because of a surge in daily infections.

WTI oil is trading at US$81.48 a barrel. Iron ore price is at US$117.67 per ton. Spot gold is trading at US$1,822 per oz.


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