Bank of Japan Keeps a Steady Hand

Market movers today Today’s focus will be on hard data from the US as we get the December PPI, retail sales and industrial production. Retail sales is the most important number, as it will be the first piece of hard data for December and will give us a sense of whether the sharp slowdown illustrated […]

Holy Bank of Japan

The Bank of Japan (BoJ) kept its below-zero interest rate and its faltering yield curve control policy unchanged. No-action sent the Japanese 10-year yield tumbling by up to 14 bp – that’s almost a 30% plunge. The dollar-yen spiked above the 131.50 level, losing more than 2.50% against the greenback. The BoJ revised its GDP […]

EUR/USD's Upside Turned More Limited

Markets Bond yields on both sides of the Atlantic rose a few basis points before separate news reports killed off the advance abruptly. The culprit in the US was an awful Empire manufacturing, plunging to the lowest level since mid-2020 on slumping new orders and stalled hiring. US short-term yields ended the day 2-2.8 bps […]

US: Retail Sales Come in Softer than Expected in December

Retail sales fell by 1.1% in December from a downwardly revised decline of 1.0% in November – below the consensus forecast for a -0.9% pullback. Motor vehicle & parts dealers reported a 1.2% m/m decline in December. Gasoline station receipts were also down 4.6%, though this was largely attributed to lower gas prices. We might […]

Pound Jumps as Inflation Eases

The British pound is in full flight on Wednesday. In the North American session, GBP/USD is trading at 1.2393, up 0.86%. UK inflation slows UK inflation eased for a second straight month in December. Headline CPI dipped to 10.5%, down from 10.7% in November and just below the forecast of 10.6%. Core CPI, however, did […]

All Eyes on the Inflation Report

Investors remain in an upbeat mood going into tomorrow’s US inflation report, buoyed still by the December jobs report and the prospect of the economy being less squeezed by interest rates. Fed Chair Jerome Powell may have refrained from commenting on the monetary policy outlook on Tuesday but the chances are, he wouldn’t have said […]

Sunset Market Commentary

Markets We didn’t find a specific driver, but UK Gilts are significantly outperforming German Bunds and US Treasuries today. Yesterday’s prediction by the Centre for Economics and Business Research did gain more attention in media. It suggested that falling natural gas prices may shave £13bn off the UK Treasury’s spending. UK yields cede 5.1 bps […]

Decisive US CPI Report Today

Market movers today It’s finally time for the US CPI, a key data point for the Fed’s decision on 1 February of whether to hike by 25bp or 50bp. Lower gasoline and food prices will likely weigh on the headline (0.0%), but services should continue to support core (0.3%). Manheim index signals that used car […]

Bonds are Safer Option for Dovish Fed Bets

Today is the most important day of the trading week, in terms of economic data release, as the US will reveal its latest CPI update, and it could be a make-or-break moment for the market sentiment. Consumer price inflation in the US probably eased to 6.5%, from 7.1% printed a month earlier. Beyond the headline […]

Current Market Momentum Too Strong to Make a Hawkish U-turn

Markets Boston Fed Collins is the first to officially indicate that she leans to another downshift in the Fed’s tightening pace at the February 1st policy meeting: from +50 bps in December to +25 bps. In an interview with The New York Times, the non-voting Fed governor doesn’t rule out the possibility of a more […]