ECB Preview

For next week’s ECB meeting, another 50bp rate hike has been well telegraphed and fully priced by markets. We expect the ECB to continue to sound very hawkish and signal that further rate hikes are coming, in particular giving guidance for another 50bp hike in March. The ECB surprised on the hawkish side in December, […]

Japanese Yen Steady ahead of Tokyo CPI

Tokyo CPI expected to rise Inflation has been on the rise in Japan and the trend is expected to continue with the release of Tokyo CPI later today. The headline figure is expected to rise to 4.4% in December, up from 4.0% in November, while the core rate is forecast to climb to 4.2%, up […]

Euro Continues to Drift

The ECB has been in calm waters all week and the trend has continued on Thursday, as EUR/USD continues to hug the 1.09 line. What is the ECB’s game plan? With inflation designated as public enemy number one, the ECB is no doubt pleased that inflation has fallen for two straight months, dropping to 9.2% […]

Will USDJPY Slide Lower in 2023?

Last year was tough for the Japanese yen. USDJPY gained more than 30% over 2022, striking above 150 in October. While anticipation of slower Fed rate hikes pulled the pair below the 130 level at the start of 2023, the speculations over the destiny of BOJ’s yield control policy grabbed the attention of the Japanese […]

Sunset Market Commentary

Markets Trading in core bonds and the major FX cross rates was mainly order driven this morning. With both the ECB and the Fed having entered the blackout period ahead of next week’s policy meetings and few data in Europe, markets had to rely on their own internal dynamics. After mixed (Europe) to slightly lower […]

US: Real GDP Ended 2022 on a Firm Footing, Though Details Show Demand Adjustment Already Underway  

Real GDP expanded by 2.9% quarter-on-quarter (q/q, annualized) in the fourth quarter of 2022. The reading came in above the consensus forecast of 2.6%. For the year, the U.S. economy expanded by 2.1% – a pace of growth slightly above trend (~1.8%) – though a marked deceleration from 2021’s 5.9%. Consumer spending grew by 2.1% […]

Cliff Notes: Global Service Sector Inflation Looks to be Peaking

Key insights from the week that was. With much of Asia taking time to celebrate lunar new year and the US/European data calendar light, inflation data for Australia and New Zealand received a lot of attention. Before the inflation data though, NAB’s latest business survey revealed conditions for Australian firms are cooling at an appreciable […]

Busy Japanese Calendar Next Week, But Yen's Performance in the Hands of the Fed

Amidst the most important week yet in 2023, we get a plethora of Japanese data. With its next meeting scheduled in March, the BoJ can sit back and watch developments. In the meantime, the dollar/yen pair appears to have found a short-term balance following three month of nonstop yen outperformance. Could next week’s data releases […]

Pressure on BOJ Grows

Market movers today In the US, household spending probably declined in December, with high-frequency indicators suggesting that services demand slowed toward year-end. In Scandinavia, retail sales for December are on the agenda in Sweden and Norway. Furthermore, the Swedish unemployment rate might reveal an uptick in December. The 60 second overview Japan: Tokyo CPI in […]

The Good, the Bad and the Ugly

US equities rallied on Thursday, boosted by a decent rally in Tesla and Chevron stocks, and a better-than-expected GDP read in the US. The latest US GDP update was a strong beat. The US economy grew 2.9% in Q4, down from 3.2% printed a month earlier, but significantly better than the 2.6% penciled in by […]