Late afternoon brought news across the wires that the U.S. Securities and Exchange Commission (SEC) had approved spot Bitcoin ETFs. The only hiccup was that ‘news’ was false, the SEC’s Twitter account had been hacked. SEC Chair Gensler followed up the fake tweet saying approval had not yet been given.

Bitcoin went on a wild price ride. After highs above $47800 it fell hard and is circa $46150 as I update.

Data from Japan today showed wage growth for Japanese workers slowed sharply in November 2023. The Bank of Japan is awaiting a virtuous cycle of pay rises and price increases (demand-pull inflation, not the cost-push type that has pushed prices higher in Japan so far and that the Bank argues are unsustainable) as a prerequisite for normalising monetary policy. They didn’t get any evidence of it today. The wait continues for Spring wage negotiations.

The yen slid on the session, USD/JPY is just above 144.80 as I update and not far from its high of the day.

From Australia today we had the monthly inflation data for November 2023. The headline came in at 4.3%, beating the 4.4% estimate (lower than expected is a beat at this time) and its lowest since January 2022. Measures of underlying inflation also fell back. Trimmed mean came in at 4.6% y/y from 5.3% in October.

As I posted earlier:

  • The monthly CPI data from Australia does not show all components of the CPI, that'll have to wait for the quarterly data release.
  • The monthly CPI indicator does, however, provide a timelier indication of inflation using the same data collected for use in the quarterly CPI. The monthly reading includes updated prices for between 62 and 73 per cent of the weight of the quarterly CPI basket, its not the full picture.
  • The November result includes data for most services, which is where the RBA is most concerned about sticky inflation.
  • The full quarterly reading will be on January 31 2024 for the October - December 2023 quarter.
  • While the drop for November is encouraging, and will trim the probability of a February Reserve Bank of Australia rate hike somewhat, it's the Q4 data that counts most.

AUD/USD traded higher despite the encouraging inflation data.

In oil-related news, the oil inventory (private survey) data published during the US afternoon showed a much larger draw than was expected. In the Red Sea was the largest attack to date launched by Iranian-backed Houthi terrorists against commercial shipping vessels. US and allied naval forces beat back the attack. Oil has given back a little of Tuesday gains.

And, that's a wrap!

Still to come are central bank speakers from the European Central Bank, Bank of England and Federal Reserve, see bullets above.

btc etf sec hack wrap chart 10 January 2024