Wolf Money(world market review 28 Feb-4 March 2023)

Low Kway Song Singapore 1889-1989

Thai Pyramid Temple circa 1923

Collection of National Gallery Singapore 

Market Summary 28 Feb – 4 Mar 2023

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- Fed expects more monetary policy tightening, period of below-trend growth as it continues to knock inflation down to 2%

+ US consumer spending up by most in 2 years in Jan; surge in wage gains, robust job growth, lowest unemployment >53 yrs  

- US manufacturing PMI up by 0.3% MoM to 47.7 in Feb, up from 47.4 last mth, down from 58.6 YoY 

- US Consumer Confidence Index at 102.9 pts in Feb vs revised figure 106 in Jan, well below expected 108.5 

- US employment index fell to 49.1% in Feb from 50.6% in Jan, entering contraction territory 

- US prices index reaching 51.3% in Feb, significantly up from Jan’s 44.5%  

+ US services PMI at 55.1% in Feb, almost unchanged from 55.2% in Jan 

+ US govt requires chip makers that want subsidies to share excess profits and provide childcare for employees  

- US plans to ban investment in China; target private and VC investments in semiconductors, AI and quantum computing: WSJ 

+ US home prices in all 9 census divisions saw growth of 5.8% in Dec on annual basis: S&P CoreLogic Case-Shiller 

+ Fed could halt interest rate hiking process by late summer: Fed Reserve Bank of Atlanta President 

- Fed Minneapolis President: wage growth in US is too high to be consistent with 2% inflation goal  

+ Americans filing new jobless claims fell again last week, down 2000 to seasonally adjusted 190,000

+ US Justice Dept to roll out new policy, to give discount on fines for firms seek to claw back compensation from corporate wrongdoers 

- US Q4 labour costs revised higher to 3.2% from 1.1% reported; productivity growth lowered 

- US >6000 importers demand refund of Trump-era tariffs on Chinese goods worth billions of dollars 

- US considering annulling existing licenses for American firms to export items to Huawei: WSJ

- US added 28 Chinese groups to trade backlist 

+ US inflation Reduction Act is attracting German companies to the US: German Chamber and Industry DIHK

- US announced new military aid for Ukraine worth US$400m 

- Amazon pausing construction of 2nd HQs in Virginia following biggest round of layoffs and shifting plans around remote work 

+ Ford will increase production of 6 models, half of them electric, as US auto sales start to recover 

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+ China National Ppl’s Congress begins its annual session on Sunday, expected to unveil biggest govt reshuffle in a decade 

+ China aims for economic growth of around 5% for the coming year, one of its lowest in decades 

+ China’s economy grew 3% in 2022 exceeding US$17 trillion: NBS 

+ China’s factory activity hits decade high, PMI surged to 52.6 from 50.1 in Jan  

+ China’s seasonally adjusted headline Business Activity Index at 55 in Feb, up from 52.9 in Jan 

+ Caixin manufacturing PMI at 51.6 in Feb, up from 49.2 in Jan 

+ China’s annual defence budget to rise to ¥1.5537 trillion (US$224.79bn), up by 7.2% 

+ China to deepen financial reform and improve regulatory regime, further open up to foreign investment: Li Keqiang 

+ PBOC signalled monetary policy stable, interest rates appropriate, inflation under control, currency’s volatility wasn’t concern 

+ China leads in 37 out of 44 for critical and key emerging technologies: Australian Strategic Policy Institute 

+ China willing to engage in discussions with US over imposed trade sanctions, particular focus on possible easing restrictions on bilateral trade and investment

+ Bank of China to expand coverage of cross-border yuan settlement services to promote trade, aims >¥30 trillion for domestic and foreign market entities in 2023 

+ China’s fiscal expenditure rose by >6% to US$3.5 trillion in 2022

+ China’s top 100 developers’ sales in Feb grew 14.9% YoY boosted by economic recovery in leading cities 

+ CNOOC discovered oil field in Bohai Bay >100m tons oil reserves, capable producing abt 2040 bpd, 11.45m cubic feet natural gas 

+ China to further reduce investment restrictions, ensure national treatment for foreign investors: MOFCOM

+ China urged global lenders’ play an active role in restructuring the debt of developing countries

+ China will pay greater attention to new industrialisation to bolster its real economy: MIIT

+ China plans to build a huge satellite network in near Earth orbit to provide internet services to users around the world, and to stifle Starlink: Researchers 

+ China’s new job-seekers to hit 16.62m in 2023, youth labour force show stable growth 

+ China number of netizen reached 1.06bn as of Dec 2022, increase of 35.49m YoY, internet availability rate at 75.6%  

+ Foxconn planning to expand its production in India: WSJ 

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- Japan’s Jinbu Bank Flash Manufacturing PMI Index at 47.7 in Feb vs 48.9 in Jan

- Japanese firms’ pretax profits fell 2.8% in Q4 YoY for 1st time in 8 quarters, hurt by surging energy and raw materials costs 

- Japanese firms raised spending on plant, equipment for 7th straight qtr through end 2022 in boost to economic recovery hopes 

- Japan’s job availability ratio fell in Jan for the first time in >2 years 

+ Japan resumed imports of Russia oil after 8-mth hiatus in deliveries: S&P Global 

- Toyota’s global sales for Jan fell 5.6% YoY to 709,870 vehicles as chip shortage continues 

+ Russia’s business activity improved significantly in Feb, composite PMI soared 53.1 from 49.7; expansion in in private sector 

+ Russia’s 2022 external debt at US$53.3bn, down from US$58.5bn in 2021, first decreased in 3 years

- Russia’s additional 14 banks been sanctioned by US, EU and UK, bringing total Russian banks blacklisted to 31 

+ Russian airlines surviving sanctions, restriction targeting country’s aviation sector have largely failed: Bloomberg 

+ Mexico approved new Tesla plant in Northern region Moneterrey worth up to US$10bn  

+ G20 foreign ministers meeting in New Delhi focus at reducing risks to global economy 

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- ECB President Lagarde said 50bps hike still on the table for Mar policy meeting 

- Eurozone annual inflation expected to come in at 8.5% in Feb vs Jan revised 8.6%: Eurostat 

+ Eurozone PMI Composite Output Index at 52 in Feb, reaching 8-mth high: S&P Global 

+ Eurozone industrial producer prices down by 2.8% in Jan vs previous mth 

+ EU spot prices for natural gas dropped below US$500 per thousand cubic meters, first time since mid-2022: ICE 

- EU shifting imposing new sanctions against Russia to enforcing existing ones, facing growing pressure from members: Politico 

- Germany and Italy will slide into recession by end 2023: Fitch 

- Germany inflation at 8.7% in Feb, same as previous mth 

+ Germany’s trade surplus rises to €16.7bn in Jan vs Dec €10bn 

- German Bundesbank posted first loss of €172m in over 4 decades 

- UK’s Feb manufacturing PMI at 7th mth high of 49.3, but remained in contraction territory 

+ UK services PMI business activity index at 53.5 in Feb, up 4.8 pts from previous mth, first time in 6 mths passed 50 marks 

- UK mortgage approvals declined to 39,600 in Jan, down from 40.500 in Dec, 5th consecutive monthly decrease 

- France inflation will accelerate to reach 10% in March, govt will break daily prices to tame the rise: govt spokesperson 

- Swiss-based commodities trading and mining giant Glencore Plc ordered by US judge in NY to pay US$700m in bribery case 

- Swiss charged 4 bankers helped move millions of dollars believed to be Vladimir Putin’s secret wealth   

+ Credit Suisse offer 6.5% annual rate on 3-mth deposits of >US$5m to attract new funds from wealthy clients in Asia 

- Greece jobless dropped to 10.8% in Jan, lowest since 2009

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- Asia-Pacific CEOs 69% expect global economic decline: Survey 

+ Saudi launched US$51bn of investments led by local companies, under govt-backed initiative 

- UAE reportedly considering leaving OPEC: WSJ 

- Pakistan’s CPI at 31.5% in Feb, highest rate in nearly 50 years 

+ Sri Lanka raises rates, relaxes currency band to secure IMF US$2.9bn bailout package 

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- Indonesia inflation came in higher than forecast to 5.47% in Feb, expect to stay above 5% in H1

+ Jakarta retail centres saw occupancy rates slightly over the course of last year to average of 77.4% 

- Indonesia govt anticipate China’s WTO motion against Bauxite Ore export ban to take place in Jun 2023: Ministry 

+ Indonesia Kalimantan Industrial 1300-km Park will eventually produce batteries for EVs and petrochemicals 

+ Thailand Board of Investment in talks with semiconductor manufacturers from US, Taiwan to lure them to expand in Thailand

- Thailand exports fell 4.5%, 4th straight mth down and more than expected, with shipments expected to contract further in H1 

+ Myanmar signed first wind power project with Chinese energy infrastructure firm, new step under BRI 

+ Malaysia CPI eased to 3.7% in Jan from 3.8% in Dec 

+ Malaysia may eventually reintroduce GST in the future: Minister

+ Malaysia’s total trade expanded 1.9% to RM207.5bn in Jan 

- Malaysia >500,000 highly skilled citizens are estimated to have migrated abroad, resulting serious shortage of professionals 

+ Malaysia to receive RM25.5bn investment from Amazon Web Services by 2037

+ Sg raises minimum investment sums for ultra-rich seeking PR status; >S$10m in a business or >S$25m at approved fund 

+ Sg PMI ended its contraction in Feb with 0.2-pt increase to 50, electronic PMI remained in contraction territory at 49.3

- Sg retail sales down 0.8% in Jan on lower motor vehicles sales, GST hike 

- Sg hotels’ average room rate eased in Jan to lowest since Aug 2022 

+ GIC to invest S$1.4bn in European renewable energy firm DEPR

Contribution by Derek@valueinvestments chat group. Thank you.

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