- If "the energy crisis is over .. & European recession risks melt away" EUR can head to 1.2
- Latest weak economic data, anticipated fall in earnings expectations, bearish 4 US stocks
- TD sees scope for significant USD weakness in Q2 and Q3 of this year.
- Goldman Sachs CEO concerned about (another) US debt ceiling fiasco
- AUD - Westpac says RBA rate hike peak will be in May 2023
- More (again) from Fed's Williams: Next stage of moving inflation down will be challenging
- China rate setting - loan prime rates both unchanged, as expected
- PBOC sets USD/ CNY reference rate for today at 6.7702 (vs. estimate at 6.7706)
- Taiwan says 12 Chinese air force planes entered Taiwan's defence zone in past 24 hours
- ICYMI - Russian oil is getting mixed in Singapore and then re-exported
- Poll finds that 68 of 83 analysts expect a +25bp rate hike at the Fed's Jan/Feb meeting
- More from Fed's Williams: Won't prejudge size of rate hike at upcoming FOMC meeting
- Fed's Williams says US inflation still too high, the Fed has more work to do hiking rates
- Japan December inflation data: Core-core hits 3% y/y
- UK Chancellor Hunt wants to extend fuel duty cut by 12 months
- Morgan Stanley CEO Gorman said US inflation has 'clearly peaked'
- ICYMI, Novak says Russian oil output this month has not fallen from December levels
- Forexlive Americas FX news wrap: Jobless claims reminds the market of the inflation fear
- New Zealand data - BusinessNZ Manufacturing PMI for December 47.2 (prior 47.4)
- Data from South Korea for December shows its PPI is rising at its slowest since April 2021
- Trade ideas thread - Friday, 20 January 2023
The three main points of interest from the Asia-Pacific timezone today were:
- the latest Japanese CPI data, for December 2022
- a speech and subsequent Q&A from Federal Reserve Bank of New York President John Williams
- and the People’s Bank of China monthly setting of one- and five-year rates
Japan’s headline and core (CPI excluding food) inflation both hit 4.0% y/y. For core inflation that was its fastest rise in over four decades. Japan’s core-core (CPI excluding food and energy; this is the Japan measure closest to the US measure of core CPI) inflation hit 3%, reaching a high last seen in July 2014. On Wednesday this week we had the result of the latest Bank of Japan monetary policy meeting, with no incremental change to the JGB ceiling as was expected by some in the markets. The next BOJ meeting is not until March 9 and 10, by which time we'll have had January CPI data results also. Thus today’s CPI was of interest, but not a great deal. The yen did weaken. USD/JPY has risen to above 128.80 and is just under there as I post. (And, as I proofread the post its getting another leg up to 128.90, making a liar out me ...)
Other major FX has been relatively subdued, thus yen crosses are higher on the session also.
The NY Fed’s Williams spoke. There are three separate posts above covering his speech and his two rounds of Q&A! Despite extensive remarks, and unlike many, many other Federal Reserve officials we’ve heard from, Williams did not give much of an indication at all of his view on whether he supported a +25 or +50bp rate hike at the next Federal Open Market Committee (FOMC) meeting coming on January 31/February 1.
From China we had the regular monthly PBOC setting of one- and five-year Loan Prime Rates. Given the MLF back on Monday was at an unchanged rate:
there was little expectation of any change to the LPRs. And thus, the rates indeed remained unchanged:
- 3.65% for the one year
- 4.30% for the five year
Asian equity markets:
Japan’s Nikkei 225 +0.2%
China’s Shanghai Composite +0.5%
Hong Kong’s Hang Seng +0.95%
South Korea’s KOSPI +0.24%
Australia’s S&P/ASX 200 +0.15%
Note that the media 'blackout' period for Federal Reserve officials speaking publicly begins tomorrow, on Saturday, January 21.
- The 'blackout' policy from the Federal Reserve limits the extent to which Federal Open Market Committee participants and staff can speak publicly or grant interviews.
- The period begins the two Saturday's preceding a Federal Open Market Committee (FOMC) meeting and ends the Thursday following.
Ahead of that are two Fed speakers later today - Harker and Waller.
Also note that China will be out on holiday all next week for Lunar New Year celebrations, welcoming in The Year of the Rabbit. To all of those taking a break for this - enjoy!