Wednesday 18th January 2023 : Yen tumbles as BOJ stays course

Global Markets:

  • Asian Stock Markets : Nikkei up 2.51%, Shanghai Composite up 0.04%, Hang Seng up 0.07%, ASX up 0.10%
  • Commodities : Gold at $1899.65 (-0.54%), Silver at $24.08 (+0.03%), Brent Oil at $86.66 (+0.86%), WTI Oil at $81.20 (+0.93%)
  • Rates : US 10-year yield at 3.483, UK 10-year yield at 3.360, Germany 10-year yield at 2.080

News & Data:

  • (CAD) Common CPI y/y 6.60% vs 6.60% expected
  • (USD) Empire State Manufacturing Index -32.9 vs -8.7 expected
  • (CAD) Trimmed CPI y/y 5.30% vs 5.20% expected
  • (CAD) Median CPI y/y 5.00% vs 4.90% expected
  • (CAD) CPI m/m -0.60% vs -0.60% expected
  • (EUR) German ZEW Economic Sentiment 16.9 vs -15 expected
  • (GBP) Average Earnings Index 3m/y 6.40% vs 6.20% expected
  • (GBP) Claimant Count Change 19.7K vs 19.8K expected
  • (CNY) GDP q/y 2.90% vs 1.60% expected

Markets Update:

Asian stock markets are trading mostly higher on Wednesday, despite the broadly negative cues from Wall Street overnight, with traders cautiously assessing recent economic data from across the globe and speculating about the policy stance of the Bank of Japan, which is expected to further shift away from its decade-long ultra-loose monetary policy.

The Japanese stock market is notably higher on Wednesday, as traders are cautious amid speculation the Bank of Japan might exit from its decade-long ultra-loose monetary policy on Wednesday. The Australian stock market is trading modestly higher in choppy trading on Wednesday, aided by gains in energy firms on firmer oil prices and technology stocks. Meanwhile, miners and financial stocks mostly declined. China’s blue chips dipped 0.2%, while Hong Kong’s Hang Seng Index was 0.1% lower.

The dollar index, which measures the safe-haven dollar against six peers, rose 0.4% at 102.85. It has been undermined lately by falling U.S. bond yields as markets wager the Federal Reserve can be less aggressive in hiking rates. Crude oil futures settled higher on Tuesday on expectations of a jump in demand following better than expected Chinese GDP data.

Upcoming Events:

  • 07:00 AM GMT – (GBP) CPI y/y
  • Day 3 – (All) WEF Annual Meetings
  • 01:30 PM GMT – (USD) Core PPI m/m
  • 01:30 PM GMT – (USD) Core Retail Sales m/m
  • 01:30 PM GMT – (USD) PPI m/m
  • 01:30 PM GMT – (USD) Retail Sales m/m