Headlines:
- Japanese yen gains pick up as BOJ looks to win first showdown against Takaichi
- BOJ reportedly likely to raise interest rates later this month
- China state-owned banks reportedly buying dollars to tame the surging yuan
- ECB's Cipollone: Risks around inflation seem balanced
- Eurozone October retail sales 0.0% vs 0.0% m/m expected
- Germany November construction PMI 45.2 vs 42.8 prior
- UK November construction PMI 39.4 vs 44.1 expected
- Reminder: There will be no US non-farm payrolls release this week
- China President Xi says will expand domestic demand in 15th five-year plan
Markets:
- JPY leads, CAD lags on the day
- European equities higher; S&P 500 futures up 0.1%
- US 10-year yields up 2.7 bps to 4.085%
- Gold down 0.2% to $4,197.85
- WTI crude oil up 0.6% to $59.30
- Bitcoin down 0.9% to $92,928
There wasn't much action in European trading today as markets keep the calm on the week, as the anticipation continues to build towards the Fed policy decision next week.
The Japanese yen is the notable mover, nudging higher after a report reaffirmed intentions by the BOJ to raise interest rates again this month. That of course follows from the more hawkish rhetoric from BOJ governor Ueda earlier in the week, with government sources saying that they will have little choice but to tolerate the course of action by the central bank in hiking rates on 19 December.
USD/JPY hovered around 155.10 early on in the day but slowly tracked lower before stumbling to around 154.55 currently, down 0.5% on the day. That is the lowest the pair has traded since mid-November and keeps sellers interested in search of a further downside retracement after the jump higher last month.
Besides that, major currencies in general kept rather muted with not all too much going on. EUR/USD is flat at 1.1675 with large option expiries keeping things in check while GBP/USD is also flat at 1.3353 on the day. Meanwhile, there wasn't much appetite among commodity currencies either with USD/CAD up just 0.1% to 1.3968 and AUD/USD up 0.1% to 0.6610 currently.
In the equities space, European indices are posting modest gains with the DAX bouncing back after the losses yesterday. However, US futures are keeping more tentative and that's permeating a more reserved market mood in general ahead of the Wall Street open later. S&P 500 futures are just marginally up but close to little changed and that's not leaving much to work with in terms of risk appetite today.
In the commodities space, gold is down slightly back under $4,200 while silver is tracking lower and at one point erased gains for the week during the session. The latter dipped down by over 2% to a low of $56.65 earlier before a slight bounce back to $57.53 now - still down 1.6% on the day. So, precious metals are not quite finding much conviction to start the new month thus far.
Coming up, we'll have the US Challenger job cuts and weekly initial jobless claims to get through. So, that'll add just a tad bit of spice on the day as we gear towards North America trading.
