Market Analytics and Considerations
Key Notes
- China: There are still significant challenges to reviving consumption and investment in the nearish term.
- Appearing after the US inflation report on Thursday will be US President Biden.
- ICYMI – In 2023, Goldman Sachs no more anticipates a depression in the eurozone.
- According to China’s State Planner, rates can remain consistent this year.
- An indication of a +25 or +50bp would come from the US inflation report released on Thursday. Fed increase in Feb.
- China Statistics about inflation in Dec. PPI -0.7percent) of the respondents y/y and CPI 1.8percent) of the respondents y/y
- Risks in the Eurozone are still slanted downward. The USD/CNY reference rate for today has been determined at 6.7680 by Credit Agricole PBOC (against expected at 6.7698)
- Australian trade data for Nov indicate lower imports and stable exports (m/m).
- On the news of the BOJ’s “evaluation,” the USD/JPY declines under 132.00. The BOJ will examine the consequences of loose policy next week.
- According to a U.S. Treasury official, the price cap is causing a decline in Russian oil income.
- According to a Federal Reserve source, analysis suggests that job creation is not as robust as previously believed.
- New Zealand statistics: Nov building permits increased 7percent monthly over the preceding -10.7%
- News roundup for Americas: Dollar remains static, as risk trades outperform CPI
- For the fourth straight day, the Nasdaq finishes stronger.
On January 17 and 18, the Bank of Japan will hold its discussion of findings. In this conference, the Bank would assess the consequences of its monetary easing and may take additional measures to address yield curve abnormalities, according to a source in Yomiuri (Japanese publication).
The Bank “adjusted” its yield curve management system in December to enable 10-year Japanese Government Bonds to trade at a yield near 0.5percentage points as instead of the previous cap of 0.25%. Any additional “modification” along those same lines would weaken the ultra-relaxed policy. To be fair, considering the magnitude of BOJ easing, the adjustment in December was minor, which is why it is referred to as a adjustments. Furthermore, let me make it quite apparent that Bank of Japan Governor Kuroda’s repeated claims that such a shift was even being contemplated had a significant impact on even this modest action by the BOJ.
The USD/JPY fell today from intraday peaks over 132.40 to low points below 131.60 as a result of the information.
