Friday ICYMI:

In Asia on Monday markets were closed in:

  • China
  • Hong Kong
  • Singapore

for Lunar New Year holidays. All three will be closed again on Tuesday. The full list of the extended Asian timezone holidays can be found here:

The absence of key markets meant thin liquidity trade in the region.

News and data were very limited. We did get the minutes of the Bank of Japan December meeting (see bullets above). At that meeting the Bank widened the band within which the 10-year Japanese Government Bond is permitted to trade, a decision that sent shock waves through global markets. From the time, as a reminder:

The impact of the minutes was minor only. Much of the material is covered in the BOJ 'Summary of Opinions' of each meeting that is released weeks ahead of the full minutes:

From the Wall Street Journal we had a piece from ‘Fed whisperer’ Timiraos, confirming the Federal Open Market Committee (FOMC) is set for a slower, +25bp, rate rise at the January 31/February 1 meeting.

Over the weekend we had hawkish comments from two members of the European Central Bank policy-setting board, Rehn and Knot (see bullets above). In contrast to a slowing Fed the ECB is looking set to carry on with +50bp rate hikes in both February and March.

EUR/USD added to its gains during the session, benefiting from the Fed/ECB news.

The USD fell more widely also: AUD, GBP running ahead with gains for other FX also.

eurusd wrap chart 23 January 2023