|

BoJ rate decision inline, forward guidance was hawkish, MAS eases slightly

General trend

- BOJ: If the outlook presented in the January Outlook Report will be realized, the Bank will accordingly continue to raise the policy interest rate and adjust the degree of monetary accommodation.

- (US) Trump interview with FOX News starts airing; Says would rather NOT have to use tariffs over China - US financial press.

- CNH rallies on Trump comments on China [21:08].

- Nikkei initially extended rise post BOJ, the index later moved below 40K.

- Asian equity markets trade generally higher.

- BOJ Gov Ueda’s press conference is expected at 4:30 GMT.

-Reminder: China expanded market closures for Lunar New Year Holiday from 6 to 8 days, effective from Jan 28th 2025 - press.

Headlines/economic data

Australia/New Zealand

-ASX 200 opens +0.1% at 8,383.

-AUSTRALIA JAN PRELIMINARY MANUFACTURING PMI: 49.8 V 47.8 PRIOR (12th month of contraction); Services PMI: 50.4 v 50.8 prior (12 month of expansion).

China/Hong Kong

-Hang Seng opens +0.7% at 19,842.

-Shanghai Composite opens -0.2% at 3,222.

- CHINA PBOC CONDUCTS CNY200B 1-YEAR MEDIUM-TERM LENDING FACILITY (MLF); LEAVES RATES UNCHANGED AT 2.00%; Drains net of CNY795B in liquidity.

-HKMA lent HK$2.0B to banks through discount window on Thurs [Jan 23rd].

-China PBOC Open Market Operation (OMO): Injects CNY284B in 14-day reverse repos; Net injects CNY179B.

-China PBOC sets Yuan reference rate: 7.1705 v 7.1708 prior.

-China President Xi visited Bengang Steel Plates Co. in Liaoning on Thursday - Chinese media.

Japan

- Nikkei 225 opens +0.3% at 40,060.

-BANK OF JAPAN (BOJ) RAISES TARGET RATE BY 25BPS TO 0.50%; AS EXPECTED.

- JAPAN DEC NATIONAL CPI Y/Y: 3.6% V 3.4%E; CPI EX-FRESH FOOD (CORE) Y/Y: 3.0% V 3.0%E.

-Japan Fin Min Kato: Will work toward early passage of the initial budget; Reiterates expects BOJ to work closely with the government.

- JAPAN JAN PRELIMINARY PMI MANUFACTURING: 48.8 V 49.6 PRIOR [7th straight contraction and lowest since Mar 2024]; PMI Services: 52.7 v 50.9 prior (3rd month of expansion).

-Rengo [largest trade union in Japan] President: Very important to secure wage rises as real wages continue to decline; result of this year's Shunto wage talks must exceed last year's.

- On Thursday [Jan 23rd] afternoon in Japan, an ‘unusually large’ bid emerged in the [JGB] futures, the bid size was around 1,000 lots; cites a dealer at a firm in Japan – financial press [update].

-Mitsubishi Motor [7211.JP]: Said to be considering NOT joining the planned merger between Nissan and Honda - Yomiuri.

-Bridgestone [5108.JP]: Says to close tire plant in Tennessee, effective Jul 31st.

Korea

- Kospi opens +0.6% at 2,529.

- South Korea acting President Choi: Continue to closely monitor financial markets during the upcoming Chinese lunar holiday.

Other Asia

- SINGAPORE CENTRAL BANK (MAS) QUARTERLY MONETARY POLICY STATEMENT: EASING POLICY; WILL REDUCE SLIGHTLY THE SLOPE OF THE POLICY BAND WITH NO CHANGE TO THE WIDTH; MAINTAINS THE CENTER OF THE BAND [first easing of policy since 2020].

- India Jan Preliminary PMI Manufacturing: 58.0 v 56.4 prior (43rd month of expansion); PMI Services: 56.8 v 59.3 prior (42nd month of expansion).

North America

-(US) Trump interview with FOX News starts airing; Says would rather NOT have to use tariffs over China - US financial press.

- (US) Pres Trump: The US has the largest amount of oil and gas of any country and we're going to use it; Will ask Saudi and OPEC to lower oil prices - World Economic Forum.

-(US) President Trump said to consider Susan Coller Monarez as the acting CDC Dir - US media.

-(US) US Pres Trump: Signing action related to AI; Also signs an order to form internal working group on crypto.

-(US) INITIAL JOBLESS CLAIMS: 223K V 220KE; CONTINUING CLAIMS: 1.899M V 1.866ME.

-(US) TREASURY $20B 10-YEAR TIPS AUCTION DRAWS 2.243% V 1.883% PRIOR; BID TO COVER 2.48 V 2.38 PRIOR.

-OpenAI: Stargate AI Project to 'exclusively serve' OpenAI - FT.

-Tesla [TSLA]: Launches new Model Y Long Range in the US at $59.9K - US financial press.

Europe

-UK Jan GfK Consumer Confidence: -22 v -18e [lowest since Dec 2023].

Levels as of 00:20 ET

- Nikkei 225, +0.1%, ASX 200 +0.4% , Hang Seng +2.1%; Shanghai Composite +0.9% ; Kospi +0.6%.

- Equity S&P500 Futures: -0.1%; Nasdaq100 -0.2%, Dax +0.2%; FTSE100 +0.2%.

- EUR 1.0454-1.0411 ; JPY 156.41-155.00 ; AUD 0.6324-0.6278 ;NZD 0.5794-0.5671.

- Gold +0.6% at $2,780/oz; Crude Oil flat at $74.60/brl; Copper +1.1% at $4.3758/lb.

Author

TradeTheNews.com Staff

TradeTheNews.com Staff

TradeTheNews.com

Trade The News is the active trader’s most trusted source for live, real-time breaking financial news and analysis.

More from TradeTheNews.com Staff
Share:

Editor's Picks

AUD/USD: Next upside target comes at 0.7000

AUD/USD has advanced further, clinching its third consecutive day of gains and trading at shouting distance from the key 0.7000 threshold on Tuesday. The widespread improved sentiment in the risk complex helped the Aussie maintain its upside momentum, while the fresh selling impulse in the Greenback also contributed to the move.

USD/JPY rises back above 158.00 despite hawkish BoJ outlook

USD/JPY rises back above 158.00 in the early European morning on Tuesday. The pair strengthens as the Japanese Yen fails to find any inspiration from hawkish BoJ expectations and looming intervention risks. Meanwhile, geopolitical uncertainty and elevated US bond yields keep the US Dollar near its YTD high despite receding October Fed hike bets. This, in turn, helps the pair stay supported.

Gold stays firm; looks at $4,200

Gold builds on Monday’s marginal bounce, although it struggles to reclaim the key $4,200 mark per troy ounce so far on Tuesday. The yellow metal’s advance comes on the back of the fresh downside momentum in the US Dollar in tandem with retreating US Treasury yields across the curve.

ZEC expands institutional momentum as Winklevoss files for Zcash ETF
Winklevoss Asset Services, co-owned by crypto exchange Gemini founders Cameron and Tyler Winklevoss, filed a Form S-1 registration statement with the US Securities and Exchange Commission (SEC) on Tuesday for the Winklevoss Zcash (ZEC) ETF. The filing proposes a fund that would hold ZEC and seek to track its price.
RBI looks set to step up Repo Rate by 25 bps to 5.5%

The Reserve Bank of India is set to announce its bi-monthly monetary policy decision on Wednesday at 10:00 AM IST, in a meeting where the central bank is expected to initiate an interest rate hike cycle after maintaining a status-quo so far this calendar year. According to the market consensus, the RBI will hike its key Repo Rate by 25 basis points to 5.5% from 5.25%.

Eurozone inflation just hit 3.8%, its highest in three years. This chart shows why the ECB can’t simply hike its way out

The ECB would normally have a relatively straightforward answer to inflation running almost twice its target: raise interest rates. But these are not normal circumstances. This time, the bond market is already doing part of the tightening for it, leaving the ECB facing an increasingly difficult dilemma.