- Inflation indicator (PCE) data coming up from the US on Friday 23 December 2022 - "soft"
- China Evergrande says its getting closer to agreeing an offshore debt restructuring plan
- A barrage of Asian market holidays incoming next week - FX guide
- PBOC sets USD/ CNY reference rate for today at 6.9810
- Australian data - November private sector credit +0.5% m/m (prior +0.6%)
- China chip equipment imports plunged 40% y/y in November - worst since May 2020
- Japan official - government subsidies to slow energy bills will impact CPI from Feb 2023
- BOJ October monetary policy meeting minutes are out, no clue to December meeting bombshell
- Japan November inflation data. Core CPI 3.7% vs. 3.7% expected
- Dec. Exports of Russia's Urals crude blend from Baltic Sea ports may fall by up to 20%
- Tesla CEO Musk says he won't be selling any more TSLA shares until 2025. D'ya believe him?
- Wall Street’s stock-market forecasts for 2022 were off by the widest margin since 2008
- US President Biden says "it’s going to take time to get inflation back to normal levels"
- Forexlive Americas FX news wrap: USD finds a bid as stocks fall.
- Oil & gas revenue will dictate Russian FX intervention in FX in 2023, but in yuan, not USD
- S&P and Nasdaq give back gains from yesterday
- Trade ideas thread - Friday, 23 December 2022
The focus for the session was on Japanese inflation data for November. All three measures came in above October. The core measure, this is CPI excluding fresh food, hit its highest in over 40 years. USD/JPY responded by heading higher, however, with a quick 20 or so point jump to circa 132.40. In the hours that have followed USD/JPY has added to its rise, up as high as circa 132.80. Its around 132.60 as I update
Prior to Tuesday CPI data from Japan barely raised an eyebrow. Bank of Japan Governor Kuroda recognized it was rising but insisted it was transitory, saying it’d begin to fall mid-way through the next fiscal year. Japan’s fiscal year begins on April 1. The thing is, Kuroda was also, prior to Tuesday, insistent that he’d not be widening the tolerance band around the YCC target from +/-0.25%, saying that to do so would be just like a rate rise. If you’ve been around this week you’ll know, however, that on Tuesday the Bank of Japan did widen its tolerance band around the YCC target to +/-0.5%, and at Governor Kuroda’s press conference following he said it wasn’t like a rate rise. The muddled (or misleading if you like) messaging from the Bank of Japan and Kuroda has cost some credibility.
Elsewhere across major FX the general tone is of US dollar weakness. Ranges are not large, but EUR, CAD, AUD, GBP and NZD have all added on points against the USD. USD/CHF is a touch better bid.
The other data release today was from Australia. November Private Sector Credit continued to dribble lower. RBA rate hikes seem to be impacting the demand for credit, as you would expect.
On the central bank front, we had the minutes of the October Bank of Japan monetary policy meeting. Given Tuesday’s move from the BOJ these were well stale. Some noted that members discussed market reaction in the event of a reduction of policy accommodation (which we got, at the margin, this week). This is not an unusual point of discussion at BOJ Board meetings though.
In US political news, the 845-page final report from the January 6 committee was released.
In Japanese politics, PM Kishida is reportedly to reshuffle his cabinet as early as January 10.
