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Marketmind: RIP YCC?

Thursday, January 12, 2023
Marketmind: RIP YCC? © Reuters. FILE PHOTO: A man wearing a protective mask walks past the headquarters of Bank of Japan in Tokyo, Japan, May 22, 2020. REUTERS/Kim Kyung-Hoon/File Photo

By Wayne Cole

SYDNEY (Reuters) - A look at the day ahead in European and global markets from Wayne Cole.

The main surprise in Asia was provided by a Yomiuri newspaper report that the Bank of Japan will review the side effects of its yield curve control (YCC) at a policy meeting next week and may take additional steps to correct distortions in the market.

This, presumably, refers to the fact that 10-year yields have been stuck at the new YCC ceiling of 0.5% for four sessions, even while the BOJ has been busy buying bonds in bulk to get them down.

The timing of the review was a surprise given the market had thought it would wait until BOJ Governor Haruhiko Kuroda retires in April before taking any big steps. Then again, the market had thought the same last month when the central bank wrongfooted everyone by widening its YCC band.

Clearly it's hard to have a credible target for 10-year yields of zero when they are trading every day at 0.5%, and just buying yet more debt is unlikely to solve that.

The BOJ could raise the target to, say, 0.5% and lift the trading range to 0-1.0%, but markets would likely see it as capitulation and immediately take yields to the new ceiling.

This FACTBOX has some more options.

Whatever the decision, time is ticking for YCC and maybe even negative rates in Japan. That would be a seismic event for bonds given Japan has acted as an anchor for yields globally, while encouraging Japanese investors to funnel funds offshore.

Any reversal of those flows could see the yen rally further, one reason the dollar is down 0.6% so far today at 131.63.

The other major event in Asia was China's CPI for December which came in bang on expectations at 1.8% y/y, marking China as one of the very few countries in the world without an inflation dragon breathing down its neck.

Indeed, producer prices surprised on the downside with a drop of 0.7% y/y, the third month of declines and a world away from the 10.3% annual increase seen in December 2021. With reopening proceeding apace, supply bottlenecks fading and shipping costs plunging, China may yet return to being an exporter of disinflation, at least for goods prices.

As for U.S. CPI, the market is clearly priced for a dovish outcome, so there's some risk of disappointment. Median forecasts are 6.5% for headline and 5.7% for core, and this is one of those cases where a result just 0.1ppt either side could make or break the recent rally in bonds.

Other key developments that could influence markets on Thursday:

- Fed's Harker, Barkin and Bullard speak

- U.S. weekly jobless claims seen rising to 215,000, with continued claims at 1.705 million

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30-03-2023 06:03:34 (UTC+7)

EUR/USD

1.0843

0.0000 (0.00%)

Summary

↑ Buy

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (6)

Sell (1)

EUR/USD

1.0843

0.0000 (0.00%)

Summary

↑ Buy

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (6)

Sell (1)

GBP/USD

1.2313

+0.0002 (+0.02%)

Summary

Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (2)

Sell (3)

USD/JPY

132.71

-0.14 (-0.10%)

Summary

↑ Buy

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (8)

Sell (0)

AUD/USD

0.6685

+0.0002 (+0.03%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (4)

Sell (3)

USD/CAD

1.3557

+0.0002 (+0.01%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (7)

EUR/JPY

143.88

-0.16 (-0.11%)

Summary

↑ Buy

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (7)

Sell (1)

EUR/CHF

0.9958

0.0000 (0.00%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (8)

Sell (0)

Gold Futures

1,981.55

-1.45 (-0.07%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (1)

Sell (7)

Silver Futures

23.435

-0.033 (-0.14%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (8)

Copper Futures

4.0775

-0.0055 (-0.13%)

Summary

Neutral

Moving Avg:

Buy (5)

Sell (7)

Indicators:

Buy (6)

Sell (0)

Crude Oil WTI Futures

72.84

+0.05 (+0.07%)

Summary

↑ Buy

Moving Avg:

Buy (8)

Sell (4)

Indicators:

Buy (7)

Sell (1)

Brent Oil Futures

77.53

-0.61 (-0.78%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (6)

Sell (2)

Natural Gas Futures

2.181

-0.002 (-0.09%)

Summary

↑ Buy

Moving Avg:

Buy (9)

Sell (3)

Indicators:

Buy (7)

Sell (0)

US Coffee C Futures

170.03

-3.72 (-2.14%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

Euro Stoxx 50

4,231.27

+63.06 (+1.51%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (8)

Sell (0)

S&P 500

4,027.81

+56.54 (+1.42%)

Summary

Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (3)

Sell (3)

DAX

15,328.78

+186.76 (+1.23%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (0)

FTSE 100

7,564.27

+80.02 (+1.07%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (10)

Sell (0)

Hang Seng

20,192.40

+407.75 (+2.06%)

Summary

Neutral

Moving Avg:

Buy (9)

Sell (3)

Indicators:

Buy (1)

Sell (7)

US Small Cap 2000

1,770.93

+18.30 (+1.04%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (1)

Sell (5)

IBEX 35

9,070.70

+126.40 (+1.41%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (6)

Sell (0)

BASF SE NA O.N.

47.180

+0.795 (+1.71%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (4)

Sell (3)

Bayer AG NA

57.27

+0.40 (+0.70%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (1)

Sell (10)

Allianz SE VNA O.N.

209.35

+3.20 (+1.55%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (8)

Sell (0)

Adidas AG

146.42

+5.24 (+3.71%)

Summary

↑ Buy

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (6)

Sell (1)

Deutsche Lufthansa AG

9.647

+0.206 (+2.18%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (8)

Sell (1)

Siemens AG Class N

146.30

+2.78 (+1.94%)

Summary

↑ Sell

Moving Avg:

Buy (3)

Sell (9)

Indicators:

Buy (1)

Sell (10)

Deutsche Bank AG

9.143

+0.221 (+2.48%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (8)

Sell (0)

 EUR/USD1.0843↑ Buy
 GBP/USD1.2313Sell
 USD/JPY132.71↑ Buy
 AUD/USD0.6685↑ Buy
 USD/CAD1.3557↑ Sell
 EUR/JPY143.88↑ Buy
 EUR/CHF0.9958↑ Sell
 Gold1,981.55↑ Sell
 Silver23.435↑ Sell
 Copper4.0775Neutral
 Crude Oil WTI72.84↑ Buy
 Brent Oil77.53↑ Buy
 Natural Gas2.181↑ Buy
 US Coffee C170.03↑ Buy
 Euro Stoxx 504,231.27↑ Buy
 S&P 5004,027.81Buy
 DAX15,328.78↑ Buy
 FTSE 1007,564.27↑ Buy
 Hang Seng20,192.40Neutral
 Small Cap 20001,770.93↑ Sell
 IBEX 359,070.70↑ Buy
 BASF47.180↑ Buy
 Bayer57.27↑ Sell
 Allianz209.35↑ Buy
 Adidas146.42↑ Buy
 Lufthansa9.647↑ Buy
 Siemens AG146.30↑ Sell
 Deutsche Bank AG9.143↑ Buy
Mua/Bán 1 chỉ SJC
# So hôm qua # Chênh TG
SJC Eximbank6,645/ 6,685
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SJC HCM6,645/ 6,715
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SJC Hanoi6,645/ 6,717
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SJC Danang6,645/ 6,717
(0/ 0) # 1,112
SJC Nhatrang6,645/ 6,717
(0/ 0) # 1,112
SJC Cantho6,645/ 6,717
(0/ 0) # 1,112
Cập nhật 30-03-2023 06:03:37
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ↀ Giá vàng thế giới
$1,964.38-7.59-0.38%
Live 24 hour Gold Chart
ʘ Giá bán lẻ xăng dầu
Sản phẩmVùng 1Vùng 2
RON 95-V23.96024.430
RON 95-III23.03023.490
E5 RON 92-II22.02022.460
DO 0.05S19.30019.680
DO 0,001S-V20.56020.970
Dầu hỏa 2-K19.46019.840
ↂ Giá dầu thô thế giới
WTI$72.89+0.911.23%
Brent$77.38+0.991.27%
$ Tỷ giá Vietcombank
Ngoại tệMua vàoBán ra
USD23.280,0023.650,00
EUR24.773,5226.160,70
GBP28.198,2129.400,59
JPY173,28183,45
KRW15,5818,99
Cập nhật lúc 05:55:29 30/03/2023
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