Global Markets:
• Asian stock markets: Nikkei up 2.15 %, Shanghai Composite down 0.05 %, Hang Seng rose 0.30 %, ASX 200 gained 0.10 %
• Commodities: Gold at $1051 (+0.15 %), Silver at $13.74 (+0.25 %), WTI Oil at $34.86 (-0.25 %), Brent Oil at $37.15 (+0.65 %)
• Rates: US 10 year yield at 2.22, UK 10 year yield at 1.85, German 10 year yield at 0.60
News & Data:
• Bank of Japan (BoJ): 8-1 Vote To Leave Monetary Base Unchanged
• BoJ Votes 6-3 To Establish New Asset Purchase Programme
• BoJ Extends Average Maturity Of JGB Holdings To 7-12 Years
• BoJ Will Establish New Programme For ETF Purchases Adding JPY 300bln To Current Purchases
• BoJ: Some Recent Inflation Indicators Have Been Weak, But Expectations Still Higher In The Long Term
• New Zealand ANZ Activity Outlook (Dec): 34.4 (prev 32.0)
• New Zealand ANZ Business Confidence (Dec): 23.0 (prev 14.6)
• China House Prices (YoY) Nov: 0.9% (prev 0.1%)
• Fitch: China Growth Shock To Hit Energy, Shipping & Steel Most
• Fitch Sees China GDP Growth At 6.3% In '16, 6% In '17
• PBoC Fixes Yuan Reference Rate At 6.4814 (prev 6.4757)
• Mexican central bank raises key rate to 3.25% from 3.00% – in line with estimates
Markets Update:
The Bank of Japan surprised markets by establishing a new programme for ETF (exchange traded funds) purchases, which will added around 300 billion Yen to the current purchases. Further, the BoJ extended average maturity of Japanese government bonds holdings to seven to twelve years. The central bank said that it voted 8-1 to keep the monetary base unchanged and 6-3 to introduce the new asset purchase programme. They noted that recent inflation data has been weak, but that expectations are still higher in the long term.
The reaction in USD/JPY was mixed. The pair first rallied from 122.60 to 123.50, but then retraced all of the gains and fell to a fresh session low at 122.15. The market does not seem to be sure how to interpret the latest move by the BoJ and traders will now wait for the press conference for further clues.
Price action in the other major pairs was rather quiet overnight. EUR/USD consolidated in a 1.0823-47 range, while GBP/USD spent the session trading between 1.4885 and 1.4928. AUD/USD traded 0.7112-34, while NZD/USD was caught in a 0.6681-0.6705 range.
Upcoming Events:
• 06:30 GMT – Bank of Japan Press Conference
• 07:45 GMT – French PPI
• 09:00 GMT – Norwegian Unemployment Rate
• 09:00 GMT – Euro Zone Current Account
• 13:30 GMT – Canadian CPI
• 13:30 GMT – Canadian Wholesale Sales
• 14:45 GMT – US Services PMI
