ASIA:
The IMF has warned that an abrupt change in Japan’s ultra-loose monetary regime would have “meaningful spillover” effects on global financial markets, underscoring the need for the Bank of Japan to clearly communicate about its future policy. IMF’s first deputy managing director Gita Gopinath called on BoJ to take a flexible approach to controlling yields on government bonds as she warned of “significant upside risks” to inflation in the near term. She added that Asia’s most advanced economy was at “a delicate juncture”. The BoJ, which will have a new governor in April, has come under increasing market pressure to shift away from its long-standing easing measures as Japan’s core inflation rate has risen to a 41-year high of 4 per cent. It faces the challenge of maintaining its accommodative monetary stance to achieve its inflation target while avoiding overshooting and turmoil in currency and bond markets.
The major Asian stock markets had a mixed day today:
- NIKKEI 225 increased 55.17 points or 0.20% to 27,402.05
- Shanghai increased 0.75 points or 0.02% to 3,285.67
- Hang Seng decreased 113.82 points or -0.52% to 21,958.36
- ASX 200 increased 9.90 points or 0.13% to 7,511.60
- Kospi increased 19.08 points or 0.70% to 2,468.88
- SENSEX increased 224.16 points or 0.38% to 59,932.24
- Nifty50 decreased 5.90 points or -0.03% to 17,610.40
The major Asian currency markets had a mixed day today:
- AUDUSD decreased 0.00546 or -0.77% to 0.70804
- NZDUSD decreased 0.00192 or -0.30% to 0.64848
- USDJPY decreased 0.492 or -0.38% to 128.438
- USDCNY increased 0.01423 or 0.21% to 6.73263
Precious Metals:
- Gold decreased 35.07 USD/t oz. or -1.80% to 1,915.35
- Silver decreased 0.471 USD/t. oz or -1.97% to 23.508
Some economic news from last night:
Hong Kong:
Interest Rate Decision increased from 4.75% to 5.00%
South Korea:
CPI (YoY) (Jan) increased from 5.0% to 5.2%
Australia:
Building Approvals (MoM) (Dec) increased from -8.8% to 18.5%
NAB Quarterly Business Confidence decreased from 9 to -1
New Zealand:
Building Consents (MoM) (Dec) decreased from 6.7% to -7.2%
Some economic news from today:
Singapore:
Manufacturing PMI (Jan) increased from 49.7 to 49.8
EUROPE/EMEA:
The European Central Bank raised interest rates on Thursday to the highest levels since 2008, maintaining an aggressive policy even as the eurozone’s overall inflation rate appears to have peaked. In a well-telegraphed move, the central bank raised its three interest rates by half a percentage point, lifting the benchmark deposit rate to 2.5 percent. While Europeans face tight financial conditions, the region has been surprisingly resilient to recent economic turmoil even as the war in Ukraine continues into a second year. Data published on Tuesday showed that the countries that use the euro had forestalled a recession late last year, and other economic indicators suggest the outlook is brighter than expected just a few months ago, in large part because natural gas prices have come down from their peak in August.
The major Europe stock markets had a green day:
- CAC 40 increased 89.16 points or 1.26% to 7,166.27
- FTSE 100 increased 59.05 points or 0.76% to 7,820.16
- DAX 30 increased 328.45 points or 2.16% to 15,509.19
The major Europe currency markets had a mixed day today:
- EURUSD decreased 0.00766 or -0.70% to 1.09124
- GBPUSD decreased 0.01337 or -1.08% to 1.22423
- USDCHF increased 0.00453 or 0.50% to 0.91273
Some economic news from Europe today:
Germany:
German Trade Balance (Dec) decreased from 10.9B to 10.0B
Swiss:
SECO Consumer Climate (Q1) increased from -47 to -9
Spain:
Spanish Unemployment Change increased from -43.7K to 70.7K
UK:
BoE Interest Rate Decision (Jan) increased from 3.50% to 4.00%
Euro Zone:
Deposit Facility Rate (Feb) increased from 2.00% to 2.50%
ECB Marginal Lending Facility increased from 2.75% to 3.25%
ECB Interest Rate Decision (Feb) increased from 2.50% to 3.00%
US/AMERICAS:
The Bank of Canada is signaling that it may pivot on its stance after a historically hawkish year. The central bank raised rates by 425 bps since March 2022, moving the target from 0.25% to 4.5%. After raising rates by 25 bps in January, Governor Tiff Macklem said that is may be appropriate to “pause” further hikes to see ““whether monetary policy is sufficiently restrictive to bring inflation back to the two per cent target.” Macklem is confident that inflation will wane to 3% by mid-year, and will finally reach the 2% target by 2024. Critics claim the central bank has become too optimistic about conditions and that Macklem’s forecast may risk the central bank’s goals by projecting potentially unwarranted confidence.
Mortgage rates in America are finally beginning to ease. The average 30-year fixed rate mortgage has fallen below 6% for the first time since September, according to Mortgage News Daily. The week began with rates hovering around 6.21%, but dropped significantly after the Federal Reserve’s announcement that inflation has showed signs of easing.
US Market Closings:
- Dow declined 39.02 points or -0.11% to 34,053.94
- S&P 500 advanced 60.55 points or 1.47% to 4,179.76
- Nasdaq advanced 384.5 points or 3.25% to 12,200.82
- Russell 2000 advanced 40.41 points or 2.06% to 2,001.22
Canada Market Closings:
- TSX Composite declined 10.61 points or -0.05% to 20,740.44
- TSX 60 declined 0.35 of a point or -0.03% to 1,248.44
Brazil Market Closing:
- Bovespa declined 1,932.91 points or -1.72% to 110,140.64
ENERGY:
The oil markets had a mixed day today:
- Crude Oil increased 0.226 USD/BBL or 0.30% to 76.636
- Brent decreased 0.166 USD/BBL or -0.20% to 82.674
- Natural gas increased 0.0791 USD/MMBtu or 3.21% to 2.5471
- Gasoline increased 0.0221 USD/GAL or 0.90% to 2.4759
- Heating oil decreased 0.0536 USD/GAL or -1.82% to 2.8975
The above data was collected around 12:56 EST on Thursday
- Top commodity gainers: Orange Juice (3.66%), Natural Gas (3.21%), Feeder Cattle (1.88%) and Lean Hogs (1.79%)
- Top commodity losers: Steel (-1.89%), Silver (-1.97%), Heating Oil (-1.82%) and Gold (-1.80%)
The above data was collected around 13:04 EST Thursday.
BONDS:
Japan 0.495% (+1.1bp), US 2’s 4.09% (-0.018%), US 10’s 3.3799% (-1.81bps); US 30’s 3.54% (-0.015%), Bunds 2.067% (-22.4bp), France 2.503% (-25.7bp), Italy 3.898% (-39.4bp), Turkey 10.52% (+0bp), Greece 4.011% (-29.8bp), Portugal 2.92% (-30.2bp); Spain 3.046% (-29.6bp) and UK Gilts 2.992% (-31.7bp).
