- Tentative mood as markets await Powell
- BOJ still at the limit for now
- Tokyo inflation all the more reason for BOJ to look towards policy shift
- US December small business optimism index 89.8 vs 91.9 prior
- China December M2 money supply +11.8% vs +12.2% y/y expected
- China has suspended issuing short-term visas for South Korean citizens for visits
- China reportedly also suspends visa issuance to Japanese travellers
- USD leads, AUD lags on the day
- European equities lower; S&P 500 futures down 0.5%
- US 10-year yields up 5 bps to 3.567%
- Gold flat at $1,871.48
- WTI crude up 0.5% to $75.00
- Bitcoin up 0.3% to $17,228
It was a quiet session in Europe as the market mood was more tentative and cautious, as we await remarks from Fed chair Powell later in the day.
The dollar was steadier throughout as bonds and stocks edged lower, with Treasury yields moving up after yesterday’s drop. USD/JPY was a notable gainer, moving up from 131.70 to 132.35 during the session. Meanwhile, AUD/USD fell from 0.6900 to 0.6860 as equities also postured more defensively during the session.
The changes among major currencies were light early on but we are seeing things pick up a little now as the dollar firms slightly. GBP/USD is down 0.4% to 1.2130 while USD/CAD is seen up 0.2% to 1.3420 on the day.
Just be mindful that we might not get anything significant from Powell later today as his remarks will be as part of a panel discussion touching on central bank independence. But it would seem that markets are prepared for the worst just in case, so be wary in case we do see any turn in broader market sentiment after the main event today.
This article was written by Justin Low at www.forexlive.com.