FX News Today
- 10-year Treasury yields are down -0.2 bp at 2.753%, JGB yields fell back -0.3 bp to 0.019%, and 10-year Bund yields are down -2.2 bp at 0.214% in early trade, with yield curves flattening after the Fed’s decision to go ahead with the rate hike.
- Topix and Nikkei still lost -2.51% and -2.84% respectively. The Hang Seng is down -1.26%, the CSI 3090 down -0.91% and the ASX -1.34%. US and European futures are also firmly in the red.
- Oil prices remained under pressure and February WTI is up from yesterday’s lows at USD 47.17 per barrel.
- Markets clearly take a much more pessimistic view on the global economic outlook than central banks and the stock sell-off that started after the Fed disappointed markets and wasn’t as dovish as markets had hoped deepened during the Asian session.
- The better than expected data out of Japan, where the All Industry Index improved 1.9% m/m was overlooked.
- BoJ left rates on hold and also sounded cautious, but with the Yen strengthening,
- Today, US futures gain following a mixed session for equities in Asia overnight.
Charts of the Day
Main Macro Events Today
- UK Retail Sales – Retail Sales for November are expected to have declined to 2.3% y/y, compared to 2.7% in October, in view of increased uncertainty regarding Brexit.
- BoE Interest Rate Decision – BoE is not expected to make any interest rate changes as it is constrained by the overall Brexit progress and thus the interest rate is expected to remain at 0.75%.
- Jobless Claims and Philly Fed – Jobless Claims, both initial and continuing, are expected to register an increase this week, adding to worries about the US’s macroeconomic outlook. However, the Philly Fed index is expected to increase thus providing a mixed picture of the overall US economy.
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Dr Nektarios Michail
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