- China’s Evergrande back in the news: EV unit warns it may halt production – funds shortage
- The detoothing of FAANG. Is it AM now?
- Goldman Sachs forecast a grind higher for gold, to $2050 in 12 months
- Bank of England meet Thursday, 23 March 2023, preview
- The FOMC “just a bunch of placeholders”, awaiting June clarity, maybe
- RBNZ Chief Economist Conway – if inflation expectations don’t fall we may have to do more
- PBOC sets USD/ CNY reference rate for today at 6.8709 (vs. estimate at 6.8719)
- Lael Brainard met with JPMorgan CEO Dimon on Wednesday
- RBNZ’s chief economist says Bank is incredibly determined to get inflation back to target
- CEO of Citi speaking – talking up bank deposit safety
- US debt ceiling: “Congress and White House careen toward default deadline”
- FX option expiries for Thursday, 23 March 2023, 10am New York cut
- Hong Kong central bank follows the FOMC with its own 25bp base rate hike, as expected
- Reuters Japan March Tankan shows small improvement for manufacturing & services indexes
- More on US warning Coinbase on recommended enforcement action over alleged law violations
- BoA preview the Bank of England meeting, +25bp rate hike and then on hold
- Coinbase gets a notice from US regulators on enforcement action due to alleged violations
- UAE central bank increases its base rate by 25bp
- Moody’s warns that long period of tight finances risks stresses spreading beyond banking
- Fed insider Timiraos highlights Powell highlighting bank collapses tightening impact
- Trade ideas thread – Thursday, 23 March 2023
- Economic calendar in Asia Thursday, 23 March 2023 – Japan Tankan and Singapore inflation
- US stocks tumble into the close
- Forexlive Americas FX news wrap: Fed hikes 25 basis points, dollar initially falls
- BoA have cut its terminal Fed Funds forecast to 5 – 5.25% (from 5.25 – 5.5%)
Asia-Pacific
markets digested the Federal Open Market Committee (FOMC) on
Wednesday. Market moves in the session saw a weakening for the US
dollar and some flows back into equities and their derivatives. The
emphasis from Powell as
the bank crisis as a tightener of financial conditions was amplified
by the Wall Street Journal’s Nick Timaraos. If this is a correct
interpretation (seems
it is to me)
it diminishes the need for Federal Open Market Committee (FOMC)
tightening, at the margin, with
a lower terminal rate the outcome.
This is the bond market interpretation and
its not a new idea, its been discussed ever since SVB collapsed.
Indeed, analysts have been lowering their peak rate projections since
the FOMC and Powell’s presser on Wednesday. BoA are in the bullets
above and I’ve seen similar from others.
Fresh
news was light only.
From
the Reserve Bank of New Zealand we had a speech and Q&A from
Reserve Bank of New Zealand Chief Economist Paul Conway. There are
two bullet points above on his comments. In brief his message was
that the RBNZ’s aggressive
monetary policy tightening is having the desired effect of slowing
demand
in the
economy. He
added that if inflation expectations don’t fall the Bank is prepared
to tighten further.
The
NZD rose against the USD on the session, as did AUD, CAD, GBP, EUR,
JPY (USD/JPY hit a 6 week low) and even CHF (just a little for CHF ahead of the Swiss National
Bank policy decision due later today).
On
the crypto front the news was Coinbase has been served a ‘Wells
notice’ by the US Securities and Exchange Commission (SEC). This is
a heads up to the firm for enforcement action. A Wells notice has
been compared to a ‘guilty until proven innocent’ assumption and
does not auger well for the firm. It may result, for example, in
Coinbase having to ‘delist’ some products it currently trades on
its ‘exchange’. Bitcoin and crypto folks generally will need to
be watching this.
In
political news, a Canadian MP resigned from Justin Trudeau’s
governing Liberal Party caucus after an allegation involving Chinese
diplomats. As for the numbers in the House of Commons, Trudeau is
unlikely to be too much bothered. While his is a minority government,
he still has the support of his coalition partners to continue to
govern.
Asian
equity markets:
-
Japan’s
Nikkei 225 -0.24% -
China’s
Shanghai Composite -0.05% -
Hong
Kong’s Hang Seng +0.64% -
South
Korea’s KOSPI +0.15% -
Australia’s
S&P/ASX 200 -0.54%
Still to come, Swiss National Bank and Bank of England policy decisions:
- at 0430 US Eastern time and 0800 US Eastern time respectively
