ASIA:
The Bank of Japan has shifted its view on inflation risk for the first time since 2014, driving the yen lower as a nation that has battled deflation for decades faces the mounting pressure of price rises in food and energy. Despite the historic change of view, the BoJ made no change to its monetary stance on Tuesday, opting to keep its negative interest rate, asset purchases and yield curve control policies unchanged. After the BoJ’s announcement, the yen fell against the US dollar, at one stage dropping back below the ¥115 mark and into a range close to a five-year low. The BoJ revised its inflation projection upward from 0.9 per cent to 1.1 per cent for the fiscal year starting in April. The central bank, which said that a pick-up in Japan’s economy had become “evident”, also changed its price risk assessment from “skewed to the downside”, an expression that had been used since October 2014, to “generally balanced.”
The major Asian stock markets had a mixed day today:
- NIKKEI 225 decreased 790.02 points or -2.80% to 27,467.23
- Shanghai decreased 11.73 points or -0.33% to 3,558.18
- Hang Seng increased 15.07 points or 0.06% to 24,127.85
- ASX 200 decreased 76.30 points or -1.03% to 7,332.50
- Kospi decreased 21.96 points or -0.77% to 2,842.28
- SENSEX decreased 656.04 points or -1.08% to 60,098.82
- Nifty50 decreased 174.65 points or -0.96% to 17,938.40
The major Asian currency markets had a mixed day today:
- AUDUSD increased 0.00358 or 0.50% to 0.72214
- NZDUSD increased 0.00192 or 0.28% to 0.67889
- USDJPY decreased 0.314 or -0.27% to 114.265
- USDCNY decreased 0.01079 or -0.17% to 6.34920
Precious Metals:
- Gold increased 26.59 USD/t oz. or 1.47% to 1,840.13
- Silver increased 0.556 USD/t. oz or 2.37% to 24.006
Some economic news from last night:
Australia:
Westpac Consumer Sentiment (Jan) decreased from -1.0% to -2.0%
New Zealand:
Electronic Card Retail Sales (YoY) (Dec) increased from 2.9% to 4.2%
Electronic Card Retail Sales (MoM) (Dec) decreased from 9.5% to 0.4%
EUROPE/EMEA:
Eurozone inflation is set to burn hotter throughout 2022 than expected a month ago, according to economists polled by Reuters, which could pressure the European Central Bank to tighten policy once the Omicron wave of the pandemic passes. For the near-term, the virus remains a wild card, with a wide range of forecasts on economic growth in the Jan 11-18 poll and the median forecast for the current quarter chopped to 0.5% from 0.7%. More than two-thirds of economists polled said the Omicron variant will have a milder economic impact than Delta, mainly because there are fewer restrictions in place now. Forecasts for inflation this year have risen for the seventh consecutive survey — up by 0.6 percentage points each for the first and second quarters to 4.1% and 3.7% respectively, well above the ECB’s 2.0% target. Annual consumer price rises hit a record high of 5% last month. But the ECB has resisted calls for tighter policy, sticking to the view that price pressures will ease this year.
The major Europe stock markets had a green day:
- CAC 40 increased 39.15 points or 0.55% to 7,172.98
- FTSE 100 increased 26.11 points or 0.35% to 7,589.66
- DAX 30 increased 37.16 points or 0.24% to 15,809.72
The major Europe currency markets had a mixed day today:
- EURUSD increased 0.00217 or 0.19% to 1.13476
- GBPUSD increased 0.00322 or 0.24% to 1.36285
- USDCHF decreased 0.00135 or -0.15% to 0.91593
Some economic news from Europe today:
UK:
CPI (YoY) (Dec) increased from 5.1% to 5.4%
CPI (MoM) (Dec) decreased from 0.7% to 0.5%
PPI Input (MoM) (Dec) decreased from 1.5% to -0.2%
Germany:
German CPI (YoY) (Dec) increased from 5.2% to 5.3%
German CPI (MoM) (Dec) increased from -0.2% to 0.5%
German HICP (YoY) (Dec) decreased from 6.0% to 5.7%
German HICP (MoM) (Dec) remain the same at 0.3%
Euro Zone:
Current Account (Nov) increased from 18.1B to 23.6B
Current Account n.s.a. (Nov) increased from 20.5B to 26.0B
Construction Output (MoM) (Nov) decreased from 0.64% to -0.18%
US/AMERICAS:
US Secretary of Commerce Gina Raimondo said that she is certain the $2 trillion Build Back Better bill will pass. She acknowledged that the bill will look different from what President Biden initially proposed, as the spending was too much for even Democrats to support. Reuters stated that the new bill may shrink to $1 trillion, but will still include sweeping social measures such as expanded child tax credits, universal pre-K, and numerous climate change measures.
Small and medium sized shipping companies are struggling to stay afloat amid rising costs. Bloomberg estimates that the spot rate for a 40-ship container from America to Asia topped $20,000 last year, which is up from the $2,000 price tag a few years prior. Due to port congestion, contracts between carriers and shippers are up an estimated 200% YoY. Carriers earned an estimated $150 billion last year, marking a nine-fold increase from 2020.
US Market Closings:
- Dow declined 339.82 points or -0.96% to 35,028.65
- S&P 500 declined 44.35 points or -0.97% to 4,532.76
- Nasdaq declined 166.64 points or -1.15% to 14,340.25
- Russell 2000 declined 33.44 points or -1.6% to 2,062.78
Canada Market Closings:
- TSX Composite declined 69.41 points or -0.33% to 21,205.16
- TSX 60 declined 5.98 points or -0.46% to 1,289.08
Brazil Market Closing:
- Bovespa advanced 1,345.81 points or 1.26% to 108,013.47
ENERGY:
The oil markets had a mixed day today:
- Crude Oil increased 1.83 USD/BBL or 2.14% to 87.2600
- Brent increased 1.31 USD/BBL or 1.50% to 88.8200
- Natural gas decreased 0.15 USD/MMBtu or -3.50% to 4.1310
- Gasoline increased 0.0355 USD/GAL or 1.46% to 2.4673
- Heating oil increased 0.0298 USD/GAL or 1.11% to 2.7038
The above data was collected around 11:22 EST on Wednesday
- Top commodity gainers: Steel (2.71%) and Platinum (5.05%), Methanol (3.80%), Palladium (6.69%)
- Top commodity losers: Lumber (-2.11%), Natural Gas(-3.50%)
The above data was collected around 11:35 EST on Wednesday.
BONDS:
Japan 0.137%(-1.1bp), US 2’s 1.0123% (-0.03%), US 10’s 1.836% (-3.93bps); US 30’s 2.1604% (-0.03%), Bunds -0.012% (+0.6bp), France 0.376% (+0.8bp), Italy 1.41% (+2.2bp), Turkey 21.96% (+7bp), Greece 1.682% (+6.1bp), Portugal 0.615% (+1.2bp); Spain 0.688% (+1.3bp) and UK Gilts 1.26% (+4.1bp).
