TOKYO (Reuters) -- The yield on benchmark 10-year Japanese government bonds rose on Friday above the Bank of Japan's new policy ceiling, reaching the highest in about eight years amid rising speculation the central bank could further tweak policy as soon as next week....they 've got a job on their hands !..
Fed members Harker, Bullard and Barkin spoke yesterday and their statements suggesting the FOMC will be at 25bp hike in February (markets pricing another in March and then cuts! about 200bps !! now priced in already for 2024.... “To be honest with you, I don’t quite know why markets are so optimistic about inflation,” said San Francisco Fed President Mary Daly. “I think of them as priced for perfection"
A short very good thread below on U.S CPI.... '''The 3m moving average of MoM core services ex-shelter CPI has dramatically slowed down, and it’s now in line with a 2.5-3.0% annualized core inflation. This matters a lot to Powell.''''
Europe’s debt market is enjoying its busiest week ever, with borrowers issuing €99 billion ($107 billion) in just four days as they seize on a start-of-year rally to bring deals early/BBG
Timiraos : Core inflation ran at a 3.14% annualized rate in the October-to-December period, the lowest such reading in 15 months
Pantheon : (yeps well said)...US inflation overshoot: Mostly margin expansion, a good dose of rents, plus a bit of wages and a bit of energy pass-through. All now reversing, with a long way to go. No further rate hikes are needed
Germany built LNG terminals in months. Wind turbines still take years, this is we never got a NatGas crisis...no-one should underestimate how extraordinary impressive this is!!.. hence no energy crisis this winter.,,
Bank of Korea raises interest rates 25bps, hints they will now be steady, no more
Tech Hub Shenzhen Takes Steps to Support Industrial Sector, Huawei-backed Aito cuts prices in China, following Tesla. PBoC Vice Governor: Monetary Policy Will Be Appropriate, No ‘Flood-Like’ Stimulus -Will Take More Measures To Boost Market Confidence. Morgan Stanley said its wealth clients are “extremely bullish” on China’s economy as the mainland reopens its borders
Total freight costs fall year over year in December for first time in 28 months
Negotiations between the EU and its G7 allies to set a price cap for Russia's exports of refined oil products are about to get serious, but it looks like this will be an even more difficult task than the earlier move to cap prices for Russian crude exports
WEF starts soon - a reminder : Private jet emissions quadrupled during Davos 2022
Inflation is softer, as expected, half the battle won, having said all this it is still +6%, clearly still a worry and investors should beware, it will remain stick, the harsh reality with many companies cutting cost and staff is now the story of early 2023
Markets :
CBOE Index VIX closed below 19, lowest level since April 2022
-Earnings season starts in the U.S, big banks today, SPX500 4K reistance (all those calls bought few days ago >> plenty of gamma o sell into!!), for eventually 4100 area
Silly bankrupt stocks BBY (up 2x this year) and others up, BTC up, battered stocks recovering fast (short-covering etc, early Jan action), IMHO inflation will remain sticky, and rates therefore (given what's priced in already for 2023-24 in particular , MUST be considered...)
USDollar tumbled, particularly vs JPY (BoJ meeting next week >>> eventually they will haave to move YCC again and/or let JPY strengthen!.. CHF decent move, and yes CHFJPY lower the trade (better EZ credit and BoJ adjustment)
Crude slightly higher
Commodities recover on the back of China re-opening, and this is a risk, if prices are driven higher again, FED and Co won't be able to cut in months ahead..
Gold, metals well supported, though already moved ahead of U.S CPI (market expectations were correct overall), copper/IronOre all about China re-opening, and eventually if the reopen goes well, would not be surprised to see crude back towards or above $100
Alf on Twitter: "Very important CPI report for the Fed and markets. A short thread. 1/" / Twitter - excellent thread from Alf on the U.S CPI inside outs..!
Russia risks becoming ungovernable and descending into chaos. There is growing opposition to President Putin at home
Total fake..On Wednesday, Nassau County Republicans, including Rep. Anthony D’Esposito (R-N.Y.), asked Santos to resign following revelations that he fabricated portions of his résumé during his successful campaign to win election to the House.
Vodafone plans hundreds of job cuts, the biggest round of layoffs in 5 years - Business & Economy News (wionews.com) so many companies reducing staff levels - checking the cost side of things
Let them preach to us what we should be doing with our heating.. WEF 2023: The Davos predictions that did not work out (cnbc.com)
Sadiq Khan: Time to end 'vow of silence' on Brexit business hit - and his plan to fix it (cityam.com) “Brexit has reduced Britain’s GDP by 5.5%, cut investment by 11% and slashed goods & services trade by 7% — Britons are also paying an extra £6 billion to eat because of Brexit”
CHFJPY finally correcting (anything JPY really)
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