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TradeTheNews.com Asia Market Update: Central Banks in focus [BOJ, RBA, PBOC]; Risk appetite worsens on BOJ YCC move, Yen gains; JGB FUTs halted
Tue, 20 Dec 2022 0:30 AM EST
General Trend:
- BOJ steps up fixed-rate JGB buying ops
- Little news seen in the RBA minutes
- China reports more COVID deaths
- Weaker business confidence weighs on NZD, NZD/JPY selling also seen
- Nikkei 225 killed on BOJ decision; Japanese Financials outperform
- Chinese property cos. decline [developers continue to raise capital; PBOC left the 5-year LPR unchanged]
- BOJ Gov Kuroda to hold his post rate decision press conference at 01:30 ET (06:30 GMT)
***Headlines/Economic Data***
Australia/New Zealand
- ASX 200 opened -0.2%
- (AU) Australia Foreign Min Wong: Dialogue essential to stabilize relationship with China; To advocate for lifting trade sanctions in next meeting with China officials
- (NZ) New Zealand Dec ANZ Business Confidence: -70.2 v -57.1 prior [record low]
- (AU) RESERVE BANK OF AUSTRALIA (RBA) DEC MINUTES: BOARD WANTS TO BE CONSISTENT, NO CLEAR IMPETUS FOR 50BPS RATE HIKE OR A PAUSE
Japan
- Nikkei 225 opened +0.1%
- (JP) Japan FY23/24 new JGB issuance seen >¥35.0T, considering issuance of ¥500B of GX bonds in fiscal 2023 - Japanese press
- (JP) BANK OF JAPAN (BOJ) LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10%; AS EXPECTED
- BOJ WIDENS YIELD CONTROL (YCC) BAND TO +/- 50BPS (prior +/- 25bps)
- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 25bps; Opens window to buy unlimited amount of 10-year JGBs at 0.25% [as expected]
- (JP) Bank of Japan (BOJ) offers to buy 5-10 year JGBs at fixed rate of 50bps [second fixed rate operation on today's session]; Opens window to buy unlimited amount of 10-year JGBs at 0.25% [as expected]
- (JP) Bank of Japan (BOJ) offers to buy 1-3 year and 3-5 year JGBs under the fixed rate method [Third offer on the session] Opens window to buy unlimited amount of 1-3 year and 3-5year JGBs
- (JP) Bank of Japan (BOJ) offers to buy 10-25 year JGBs under the fixed rate method [Fourth offer on the session] Opens window to buy unlimited amount of 10-25 year JGBs
- (JP) Japan Fin Min Suzuki: No decision has been made on revision joint statement with BOJ; Hopes BOJ continues working towards CPI target sustainable and stably
Korea
- Kospi opened -0.3%
- (KR) North Korea notes Japan Military buildup is a violation of UN Charter and challenge to international peace, provokes fundamental change in East Asia security environment
- (KR) South Korea sells 20-year bonds: Avg yield 3.420% v 4.450% prior
China/Hong Kong
- Hang Seng opened -1.0%; Shanghai Composite opened -0.3%
- (CN) Chongqing (China) to allow mild COVID cases to go to work – US financial press
- (CN) China sees 2022 fiscal spending at CNY26.3T, +6.9% y/y; cites Finance Minister Liu Kun – Chinese press
- (CN) USTR Tai reiterates new tools are needed to counter China – SCMP
- (CN) China Sec Journal: Reserve Requirement Ratio (RRR) and loan prime rate (LPR) could be cut
- (CN) CHINA PBOC MONTHLY LOAN PRIME RATE (LPR) SETTING: MAINTAINS BOTH 1-YEAR AND 5-YEAR RATES (AS EXPECTED)
- (CN) China National Health Commission (NHC): Reports 5 mainland COVID deaths on Dec 19th v 2 prior
- (CN) China PBOC Open Market Operation (OMO): Sells CNY5B in 7-day reverse repos v CNY9.0B prior; Sells CNY141B in 14-day reverse repos v CNY76B prior; Net inject NY144B v net inject CNY83B prior
- (CN) China PBOC sets Yuan reference rate: 6.9861 v 6.9746 prior
- (HK) Hong Kong to further ease social distancing measures - press
- (CN) China PBOC sells CNY5.0B in 6-month bills at 2.20% in Hong Kong (as indicated)
North America
- (US) Title 42 (Remain in Mexico Policy) to remain in effect after Supreme Court decision
-(US) DEC NAHB HOUSING MARKET INDEX: 31 V 34E (lowest since June 2012 excluding pandemic)
-(US) House Jan 6th Committee final report: Recommends DOJ bring criminal charges against former President Trump for conspiring to make a false statements and conspiring to defraud the government
-(US) Treasury to issue notice in March with proposed guidance on EV tax credit, critical minerals, and battery component requirements; By Dec 31st, will release info on anticipated direction of the EV tax credits - press
Europe
-(UK) DEC CBI INDUSTRIAL TRENDS TOTAL ORDERS: -6 V -9E
-(DE) German Bundesbank Monthly Report: Domestic economy is contraction less than forecast
-(EU) EU countries said to consider new proposal to trigger gas price cap at €180/MWh - press
-(RU) Russian govt spokesperson Peskov: Russia considering additional proposal for our response to the oil price cap - financial press
-(IT) Italy Business Min Urso: EU should adopt US-style aid for companies
-(RU) EU Presidency confirms reached deal on Russia gas price cap at €180.MWh - press
-(EU) ECB's Nagel (Germany): Will take some time to return to 2% inflation
-(DE) Germany Econ Min Habeck: Still skeptical on gas price mechanism; We were able to get strong safeguards on the price cap to prevent harm
Levels as of 00:20 ET
- Nikkei 225, -2.8%, ASX 200 -1.5% , Hang Seng -1.8%; Shanghai Composite -0.9% ; Kospi -0.8%
- Equity S&P500 Futures: -0.9%; Nasdaq100 -1.1%, Dax -1.3%; FTSE100 -0.8%
- EUR 1.0651-1.0597 ; JPY 137.47-133.09 ; AUD 0.6744-0.6644 ;NZD 0.6396-0.6314
- Gold +0.1% at $1,799/oz; Crude Oil +0.2% at $75.56/brl; Copper -0.6% at $3.7380/lb
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