Rise and shine Traderade family!
Happy Tuesday. The big news today is from Japan where the Bank of Japan decided to abruptly change their stance on their yield curve control, widening the band. The upper limit of their 10-year JGB is now 0.5% from 0.25%. Asian stocks took a beating and the Yen soared on the news. 10-year JGB yield shot up, putting pressure on bonds.
In other news, we have building permits and housing starts being released today and three important earnings - General Mills before market, Nike and FedEx after market.
Asia and Australia
Japan - in addition to the changes around the YCC, they also announced increase of outright JGB purchases to about ¥9T per month from January through March 2023, from current ¥7.3T and kept short term. Short term interest rate kept at -0.1%.
PBOC kept 1Y prime rate at 3.65% and 5Y rate at 4.3%, both unchanged for fourth consecutive month
Bank of Korea said Tuesday it expects inflation to stay at around 5% "for the time being"
Europe, Middle East, Africa
The EU has reached an agreement on the Gas Price cap at EUR180/MWh but also put in measures to remove the cap within 3 days if the there is a gas shortage. The cap goes into effect on Feb 15, 2023. The obvious implication is that if NatGas prices start to increase again, supplies will be routed to other areas that are willing to pay more than the cap. The latest price of Dutch TTF was EUR 108/MWh this morning.
The Americas
Apple to start making MacBooks in Vietnam for first time by mid-2023
Binance steps in to buy bankrupt crypto firm Voyager for $1B after FTX offer evaporated
Carmakers to suffer chip shortages until at least end of 2023
Calendar