- Data from China today indicated that property investment fell its most in more than 20 yrs
- More on the PBOC MLF cash injection earlier today
- Japan is considering a corporate tax surcharge of 4 to 4.5% (re defence spending boost)
- Elon Musk sells at least $3.58 billion worth of Tesla shares
- China 'activity data' for November 2022 - retail sales collapse further, -5.9% y/y
- Oil - TC energy says it has restarted some sections of the Keystone pipeline only
- China property sector malaise continues, new home prices -4.6% y/y (prior also -1.6%)
- PBOC conducts 650bn yuan one year MLF at an unchanged rate of 2.75%
- US House voted to pass a stopgap funding bill that will last through December 23
- PBOC sets USD/ CNY reference rate for today at 6.9343 (vs. estimate at 6.9325)
- Australian jobs data - unemployment rate for November 3.4% vs. 3.4% expected
- The BoE is expected to hike by 50bp today. Goldman Sachs say more hikes ahead in H1 2023.
- February FOMC forecast of +25bp, then no change in March, citing slowing activity
- Australian data - Melbourne Institute Consumer Inflation Expectations 5.2% (prior 6.0%)
- Japan trade data for November 2022: Both exports and imports fall sa m/m (up y/y)
- Hong Kong's central bank follows the Fed and raises its base rate 50bp to 4.75%
- @ElonJet is back!
- US SEC huge changes to stock trading rules - aimed at boosting transparency and fairness
- Bank of England meeting today - preview - BoA expect +50bp rate hike, minimal GBP impact
- New Zealand Q3 GDP comes in much better than expected
- Forexlive Americas FX news wrap: Fed hikes by 50bps and hikes terminal rate by 50 bps too
- Trade ideas thread - Thursday, 15 December 2022
- Canada will revoke waiver exempting Nord Stream pipeline turbines from Russia sanctions
- The White House is preparing us for even higher interest rates to come
- UK Chancellor Hunt is considering plans to prolong energy aid for all companies
It was another day of subdued market movement across major FX as traders digested the hawkish Federal Open Market Committee (FOMC) & Powell, and waited for SNB, BoE, and ECB decisions.
The movement we did have was for a slightly higher USD against most major FX. In small ranges. For such minor moves explanations are often superfluous/wrong but if you go with the hawkish Fed raising recession fears I guess I can live with that. It fits with regional stocks trading a little softer also. I wouldn’t marry that explanation though, a reversal of the small moves could change it quite quickly (there are arguments derived from market pricing that the Federal Reserve will cut rates in the back half of next year, for example).
On the data front
- Australia produced another strong jobs report (see bullets above).
- Japan’s trade balance showed the sixteenth straight month of trade deficits (higher energy import costs key to this, but not exclusively). Japan’s exports were strong y/y but were swamped by the big imports bill.
- Of more focus was the ‘activity’ data from China which showed misses on industrial output, fixed investment and a terrible retail sales number (again, see bullets above). COVID, of course, is the culprit, along with a collapsed property sector. Chinese authorities are moving to address both and data is expected to improve in the coming months.
Central bank activity – the People’s Bank of China added funds to its banking system. A medium term lending facility (MLF) of 500bn yuan matured and was more than offset by a 650bn MLF operation. There is more in the bullets above on the reasons for the cash injection.
Elon Musk was in the news again, he sold a large chunk of Tesla shares. The fourth hefty sale from him this year as he seeks to cover his debt bleed.
In metals, ANZ raised its end-2023 gold price target to USD 1,900/oz.
Oil lost some ground. Fed hawkishness and a partial reopening of some sections of the Keystone pipeline cited.
