Bitcoin and Ether Set to Deepen Correction

Bitcoin is once again testing the local support it managed to hold last week. But we are attracted by a sequence of lower local highs, indicating an impressive selling proposition. We may be seeing profit taking from all the upside from the October lows. Working off this scenario suggests a pullback to the $38K area if the market falls below $40K. But even this potentially nasty drawdown looks to be just part of a larger bull cycle that Bitcoin is now moving within.

NZ First Impressions: ANZ Business Confidence

The ANZBO measure of business confidence rose to 33.2 in December. That’s the eighth rise in a row, and takes confidence back to levels we last saw in 2015. We also saw a further rise in firms’ expectations for their own trading activity.

RBA Minutes December 2023: The Benefits of Waiting

The minutes of the December meeting of the RBA Board highlighted the benefits of testing your assessment of the economy against subsequent data. Monetary policy is working to bring demand and supply back into closer alignment and inflation back to target, and some of the concerns that would support a case to raise rates further were effectively dismissed by data released after the meeting. The Board’s decision to hold was therefore vindicated by subsequent events.

BoJ on Hold

BoJ: The Bank of Japan kept its quantitative and qualitative easing with yield curve control policy unchanged this morning as expected. The policy rate stays at -0.1% and the 10-year yield target around 0, with the upper bound of 1.0 percent as a reference rate. The bank offers no clues on plans for tightening in 2024 and even kept the pledge to "not hesitate to take additional easing measures if necessary".

Bulls Quickly Returned to Crypto

Bitcoin is trading just below $43K, and as of this morning, in a thinly liquid market, it was rising at a peak of $43.4K, an eight-day high. Bitcoin has formed a double bottom on the intraday charts, and this dynamic indicates that the mood for a deeper correction has not materialised. On the other hand, Tuesday’s peak is close to last Thursday’s, leaving Bitcoin inside the range.

Japanese Yen Slides as BoJ Stands Pat

Tuesday’s Bank of Japan meeting was a live meeting, as there was speculation that the central bank might make a move after some broad hints of tighter policy from senior Bank officials. In the end, the meeting was a non-event as even a tweak in language was not to be found, and disappointed market participants gave the yen a thumbs down.

Canadian Dollar Drifting Ahead of CPI Release

The Canadian dollar is showing little movement on Tuesday. In the European session, USD/CAD is trading at 1.3382, down 0.13%. We could see stronger movement from the Canadian dollar in the North American session, with the release of the Canadian inflation report.

Canada: Cloudy Signals on Inflation in November Have a Sliver Lining

The Bank of Canada got a real mix in their inflation stocking this month. There were a few lumps of coal in the form of no progress on headline inflation, and continued strength in services inflation. But, when they dig down to the bottom of the toe there is a shiny bauble – that their preferred core inflation measures averaged just below 2 ½% on a annualized basis over the past three months, the slowest pace since the beginning of 2021.

Will UK CPI Please the Market Ahead of Festive Break?

Contrary to market expectations and the Fed setting the scene for a dovish round of central bank gatherings, the Bank of England did not pivot at last week’s meeting. Somewhat surprisingly, three BoE members continue to vote for another 25bps rate hike and thus influencing the overall rhetoric of the accompanying statement.

Stock Market Outlook 2024: Soft Landings, Rate Cuts, and Elections

It’s been a sensational year for US equity markets. The S&P 500 has risen more than 23% while the tech-heavy Nasdaq 100 has gained a stunning 52% so far, with both indices coming within breathing distance of their record highs. Fears about a recession have melted away and investors are increasingly confident the US economy can achieve its elusive soft landing.