- More on China weighing stock market rescue package backed by $278 bln
- BOJ announce no change to policy, as expected
- China plans to further restrict favorable tariffs on Taiwan
- China gaming regulator takes down draft rules to control spending in video games from site
- The chatter of a 278bn rescue package for China shares is supporting AUD/USD
- Bloomberg headline: China mulls stock market rescue package backed by $278 bn
- New Zealand Q4 inflation data due tomorrow - preview
- PBOC sets USD/ CNY central rate at 7.1117 (vs. estimate at 7.2033)
- Australian December business confidence rises to -1, from -8 in November
- Chinese financial media says the PBoC could cut its prime rates this quarter
- Goldman Sachs Chief Economist says the US Fed will achieve a soft landing for the economy
- Head of Australia's sovereign wealth fund says still a way to go to get inflation down
- Weekly survey of Australian Consumer Confidence 84.4 (prior also 84.4)
- Goldman Sachs says global hedge funds are piling into U.S. technology stocks
- Investor belief has pivoted to view the economy as bullet-proof.
- Forexlive Americas FX news wrap 22 Jan: Quiet start to the new FX trading week
- US, UK military have carried out a new round of strikes in Yemen against Houthi terrorists
- New Zealand December services PMI 48.8 (prior 51.2)
- Reserve Bank of New Zealand to consult on loosening (macroprudential) policy
- Trade ideas thread - Tuesday, 23 January, insightful charts, technical analysis, ideas
Those two headlines above are what drove market movements during the session.
News crossed that China is considering a 1 trillion yuan fiscal stimulus and a similarly sized special bond stimulus to rescue the stock market. Chinese mainland and Hong Kong stocks jumped higher on the news, as did the yuan. The news has underpinned China stocks and the yuan since, despite some retracement.
AUD/USD also moved higher on this news, topping out around 0.6600. EUR, NZD, GBP, CHF and CAD all rose against the US dollar also.
The other item of interest from the timezone was the Bank of Japan meeting conclusion. The Bank left its negative short-term interest rate and Yield Curve Control policies unchanged, an ‘as expected’ decision. The Bank also issued the quarterly update to its "Outlook for Economic Activity and Prices" report. The bank lowered its forecasts for ‘core’ CPI:
- fiscal year 2024 median forecast at +2.4% vs +2.8% in the October Outlook Report
- fiscal year 2025 median forecast at +1.8% vs +1.7% in October
USD/JPY initially rose on the releases to just shy of 148.55 but has since dropped to lows circa 147.90 As I update USD/JPY is back around 148.15 and showing little net change for the session.
Still to come is Bank of Japan Governor Ueda's press conference, around 0630 GMT (0130 US Eastern time). Now that the January BOJ meeting has passed we'll be on the hunt for clues for any possible policy change at the next meeting, March 18 and 19.
Offshore yuan update:
