FOMC minutes : inflation expectations remain high though (higher for longer..), higher Terminal rate - Kashkari (strong JOLTS too yesterday and NFP tomorrow), participants mentioned ''unwarranted easing in financial conditions, market participants misinterpreted a slowing in the pace of rate hikes as a major dovish pivot''
Toyota finally revealed New Hydrogen combustion engine
What could go wrong for the Federal Reserve in 2023 >>> '''U.S budget deficit''', well worth reading the article below
China and Australia to renew trading of iron ore, coking coal, other goods (after a 2y ban...) another U-Turn for XI...>>> HSI, AUD higher again..
Japan is paying families to move out of Tokyo. It’s offering households ¥1 million ($7,650) per child to leave the capital in an effort to reverse population decline in other regions
German Facility, built at breakneck speed, accepts Gas shipment From U.S.
LNG cargo arrives at terminal in port town of Wilhelmshaven as Germany scrambles to replace Russian gas
South Korea slapped Tesla with a $2.2 million fine. Antitrust authorities found the EV maker exaggerated its driving range
German Import Prices -4.5% monthly, +14.5% annually vs expectation of -1.6% and +18% >>> better, going in right direction (thank you warm weather and lower energy prices..)
It was a record year for crypto hacks. Decentralized finance was the prime target, accounting for two thirds of all hacks
Amazon says it will cut over 18,000 jobs, more than initially planned
$19trn negative yielding bonds gone during 2022 (pretty much) - this is/was a huge statement for markets - they should have never existed, but CB were silly (could use a much worse adjective!!..) as we often discussed >>> certainly partly explains MegaTechs, FAANG's hammering, including APPL, please refer to our earlier blog..
Markets:
China re-opening/HK/Australia etc, commods, metals, AUD joining in, HSI continues higher, Chinese stocks still trading at a wide discount to Global Peers - big picture
Bonds : EZ bonds are now fully anticipating a weak HICP on Friday, could be sub 9%, but what about core, surprise now is if not low enough for markets..
Crude down, competition with coal and LNG...! (China news, Glencore down 10pct..), down 5% yesterday, demand worries and large supply, Gas Prices in Europe continue to decline on LNG imports and warm weather
USDJPY didn't like life below 130JPY, lifting crossjpy's again since - could well have put bit of a base on both for a while
Big moves/low liquidities (as usual) as we kicked off 2023, AUDJPY, crude, BABA, TSLA, BTP's APPL, NatGas, ,GBP struggling, EZ equity markets 'outperforming' US markets so far, Q1 trend? remains to be seen but interesting
A must read - regarding U.S budget deficit, which we have spoken with you about extensively during latter part of 2022
A final — albeit more subtle point — is the fact that the Fed’s balance sheet is still greatly enlarged at $8.56 trillion in assets. Quantitative easing added monetary policy stimulus. Thus, that stimulus should have pushed the neutral rate higher. Although that stimulus is now being withdrawn through quantitative tightening, it still will take another year or two to get back to where we started. So, while QT is tightening monetary policy, it is not yet making monetary policy tight relative to where we started.
"Fed either pivots too early and turns dovish in to a high inflation scenario which is fairly bearish the USD thus helping gold or they pivot too late and cause a much bigger recession than is priced in right now, resulting flight to safety helps gold." - Goldman
Rishi Sunak on Twitter: "As your Prime Minister you need to know what my focus will be, so you can hold me to account directly on whether it is delivered. These are my five promises 👇 https://t.co/XyXrlMshdG" / Twitter >>> his target is halving inflation, that's what predictions are already - nothing new - still will leave it at 5-6%...
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