Tag: Bank of Japan

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Global Market – Key events for 22 to 26 January 2024

Global Market – Key events for 22 to 26 January 2024

This week, we will focus on US Q4 2023 GDP data, ECB interest rate decision & China’s steps to boost economic recovery.  Central banks meeting starts with BOJ & ECB meeting this week.  We would like to focus on stocks whether news this week would have any impact global trend.

BOJ Keeps Negative Rate for Now as It Prepares Ground for Hike

The BOJ maintained its -0.1% short-term rate and kept yield curve control parameters intact at the end of a two-day meeting, according to its statement Tuesday. 

Red Sea Turmoil Sends Economic Shockwaves Far and Wide

Two months of missile, drone and hijacking attacks against civilian ships in the Red Sea have caused the biggest diversion of international trade in decades, pushing up costs for shippers as far away as Asia and North America.

China To Cut Bank Reserve Ratio in Bid to Boost Growth, Markets

The 0.5 percentage-point cut to the ratio, or the amount of cash that banks have to keep in reserve, on February 5 will provide 1 trillion yuan ($139 billion) in long-term liquidity to the market, Pan said during a briefing with the press Wednesday.

Fed Raises Rate on Emergency Loan Program to Stop Arbitrage

The Federal Reserve raised the rate on loans to banks issued under an emergency lending program launched last year, after borrowing surged in recent weeks as institutions took advantage of the attractive financing terms.

ECB To Hold Interest Rates as Lagarde Beats Back Cut Bets

The European Central Bank is set to keep borrowing costs on hold for a third meeting while stepping up efforts to convince investors that interest-rate cuts aren’t imminent.

US GDP Grew 3.3% Last Quarter, Capping Unexpectedly Strong Year

Gross domestic product increased at a 3.3% annualized rate, according to the government’s preliminary estimate out Thursday. For all of 2023, the economy expanded 2.5%.

Equichain Wealth Advisors: Market View & Opinion

Bank of Japan is now preparing to hike interest rate, China is providing support for economic recovery, ECB guides for rate cut & while US last quarter GDP growth came above estimate ahead of US Fed meeting on 31-Jan-24.  We seen extreme mix picture of global economy which makes us cautious as year end rally seen in December 2023 could see trend reversal post US Fed meeting outcome.

Earnings season so far has remain mix and fail to provide fresh triggers for market.  We are currently focusing to reduce exposure at higher level and wait for better entry opportunity on correction.  Next big trigger could come when interest rate in US & Europe comes down and we see some economic slowdown before we see interest rate heading downward.

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Global Market – Key events this week 22 to 26 Jan 2024.pdf
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Research Report

Global Market – It’s “PAUSE” or “Indicative PIVOT”

Global Market – It’s a “Pause” or “Indicative Pivot”

This week we will discuss all three central bank’s meeting outcome and its impact on global sentiment and interest rate policy.  Our focus will be that whether it will be “Pause” or “Indicative pivot”.  US Fed & ECB meeting outcome was in-line with estimate and BOJ outlook and guidance was positive as they maintain JGB yield curve at -0.50% to 0.50%.

US Fed meeting outcome on 14-Jun-23

• US Fed kept interest rate unchanged after 15-months of rate-hike cycle.
• Current interest in US at 5.25% is same rate as seen in 2007, back in 2006 – 07 – interest rate remains at 5.25% for 14 months before interest rate heads downward.

U.S. Fed chair Jerome Powell had signaled that they would prefer to skip rate hike at June meeting, while still leaving room for a hike in coming months, if needed. 

ECB meeting outcome on 15-Jun-23

• ECB hikes rate by 25-bps to 4.00%.  Deposit rate now stands at 3.50%, highest level in more than 2-decades.
• ECB guides for continuation of rate hike to bring long term inflation at 2% and to keep interest rate higher as long as necessary.

BOJ meeting outcome on 16-Jun-23

• BOJ kept interest rate by -0.10%, maintain interest rate at ultra-low level.
• BOJ signaled JGB yield curve between -0.50% to 0.50%.
• BOJ maintain its current pace of quantitative easing, and said that it will continue to purchase exchange-traded funds and Japanese real estate investment trust.

The BOJ’s move on Friday comes largely in line with market expectations, as analysts saw little scope for immediate change in the bank’s dovish stance under new Governor Kazuo Ueda.

Equichain Wealth Advisors: Market View & Opinion

While BOJ maintains its ultra-low interest rate and QE policy.  If we compare all these policies, we see significant contradiction as all these central banks are key liquidity provide for global financial market.

Our base case assumption does suggest that – we could consider this as early sign of “PIVOT” as higher interest rate will show its impact sooner rather than later.

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Global Market – It’s an “PAUSE” or an “Indicative PIVOT”.pdf
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Daily Reports

Daily Report 14-Jun-23

Wall Street had another positive session after CPI came @ 4.0% Vs estimate of 4.1%.  U.S. Core CPI rises to 5.3% in May lowest since November 2021.

US Fed meeting tonight is now factoring in 95% probability of pause after CPI & Core CPI data came in-line with estimate.  US Fed chair Jerome Powell post policy press conference will be key event.

FMCG & defensives stocks continue to lead the Indices higher as Banks & IT stocks see some profit booking.  Mid-cap & Small-cap stocks continue to outperform.

VIX @ 11.11: surprisingly low, any increase in VIX needs to watch-out.

Approach on Indices: With Nifty is less than 170 points away from lifetime high at 18887, expected to test.  Banknifty likely to test 44965 as Banknifty likely to react to US Fed news.  Indices remain in uptrend till Nifty is above 18458 & Banknifty above 43552.  

Market View: We are going into event with indices near all time high, even if indices move higher, we would continue to reduce exposure on higher level.  In near term – even if US Fed decision comes favourable in-line with market expectation – we expect profit booking.

SGX Nifty @ 18830.50 up 45.50 points at 8:35 AM

Click on the attachment to read the full report:
14-Jun-23 Daily-Report.pdf
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