- The Reserve Bank of Australia March policy decision is due on the 19th - 'on hold' preview
- ECB rate cut speculation is ramping up, Chief Economist Lane to comment Friday
- China February new house prices -1.4% y/y (prior -0.7%)
- People's Bank of China set MLF rate at 2.5% (prior 2.5%)
- PBOC sets USD/ CNY reference rate for today at 7.0975 (vs. estimate at 7.2058)
- Japan Chief Cabinet Secretary Hayashi expects the BoJ to stably hit its inflation target
- Reserve Bank of Australia expected to keep its 4.35% cash rate unchanged until September
- El Salvador to transfer a chunk of its bitcoin to a cold wallet, store in a physical vault
- Japan finance minister Suzuki says strong trend of wage hikes happening now
- Bank of Japan won't tighten policy next week - here's why they'll wait until April
- Bank of Canada will need to cut interest rates - USD/CAD to jump above 1.40
- UBS see broadening of equity market rally on Fed cuts, robust growth, falling inflation
- Barclays' 3 reasons to keep buying US stocks
- EUR/USD forecast to rise to 1.15
- New Zealand February Manufacturing PMI 49.3 (prior 47.3)
- Russia has moved tactical nuclear weapons into Belarus
- The upcoming Bank of Japan tightening - 3 ways it could super-boost the JPY
- ICYMI - Barclays says US dollar to rally up to 3% if Trump wins the election
- Forexlive Americas FX news wrap: US dollar climbs despite soft retail sales
- US looks to buy 3mn barrels of oil for its strategic reserve
- Down day for the major US stock indices
- Trade ideas thread - Friday, 15 March, insightful charts, technical analysis, ideas
Japan’s finance minister Suzuki said today that the country was “no longer in deflation.” This is a sharp turnaround from comments from officials previously. Indeed, it was only Tuesday when Suzuki was reported as saying we cannot declare deflation as beaten. Suzuki’s comment today is clear support for the Bank of Japan to tighten policy.
For a tightening of policy the board at the Bank of Japan will need to see wage results that support the prospect of sustainable and stable inflation around its 2% target. The Japan Renko wage news conference is coming up at 16:15 Tokyo time (0715 GMT and 0315 US Eastern time) and that will give us some guidance. Do note, however, that while the wage rise agreed by the large corporations to be reported on at that news conference today sets the upper limit for corporate Japan as a whole, UBS has noted that “the amount of pass-through to small and medium-sized firms will only become evident in the second (22 March) and third (4 April) rounds of negotiations. The second round in particular is typically considered crucial, as it will cover over half of the total number of firms in scope.”
The BoJ meet on April 18 and 19, and expectations are high for a policy pivot at this meeting, but given the wage data to come later this month and also in early April, the April 26 BoJ meeting may be the more logical option for the pivot. In central bank land, a 5 week gap is nothing. Having said this the persistent news flow (JiJi, NHK, Nikkei reports, amongst others) is for a March rate hike.
From China today the People’s Bank of China left its medium-term lending facility (MLF) rate unchanged at 2.5% for a seventh consecutive month. In addition, the Bank injected 387 billion yuan vs. the 500 bn maturing. This is the first net cash withdrawal through the MLF liquidity instrument since November 2022.
At its daily USD/CNY reference rate setting the rate was 7.0975 vs the 7.2058 expected. This huge discrepancy of over 10 big figures, nearly 11, is the biggest in 11 months. The Bank continues to prop up the yuan.
Regional stocks lost ground following the weakness on Wall Street triggered by another hot inflation reading (PPI @ 1.6% y/y vs. 1.1% expected).
The USD added to its Thursday gains, USD/JPY got as high as above 148.60 before running out of steam:
Bitcoin, and the crypto complex more broadly, lost ground. BTC/USD is around $67,500 as I post.