Global Market- Bank of Japan, US Economic data & GOLD
This week we will discuss Bank of Japan policy, how US Corporate earnings failed to boost the market sentiment and how weak US economic data surprisingly weaken the sentiment and market corrected. Earlier, strong US economic data would trigger correction in risk-on asset classes a weak economic data would boost sentiment in assets classes.
Bank of Japan – Change in monitory policy stance
• Bank of Japan maintain ultra-low interest rate policy, kept rate unchanged at -0.1%.
• BOJ: Large scale bond buying to continue as an when needed and maintain yield curve at 0.0%.
• BOJ commit to maintain yield curve control against market expectation of change in policy after last month’s policy decision to increase upper end of yield curve from 0.25% to 0.50%.
US Economic data
In recent months we have seen that market react positively on weak economic data and market turn negative on strong economic data, but on Wednesday market reacted negatively to below estimate PPI & Retail sales data. This is notable change ahead of next US Fed meeting on 1-Feb-23.
Gold @ $1930
In our article two weeks ago, we have mentioned how global central banks are adding gold to its forex reserve which could also be one of the positive triggers. In case of any weakening economy or change in monitory policy. Gold could also be potential beneficiary of de-dollarization in international trade. We see Gold currently placed in win-win situation.
Equichain Wealth Advisors: Market View & Opinion
We remain optimistic but would turn cautious as corporate earnings so far failed to cheer the market. Jobs cut announcement continue by big tech companies continues, today Google announce to cut 12000 jobs globally as tech layoffs deepen. Next week US economic data to watch out for will be Advance GDP q/q on 26-Jan & Core PCE price index m/m on 27-Jan-23.