- Barclays raised its year-end 2024 target for the S&P 500 to 5,300 from 4,800 previously
- Federal Open Market Committee (FOMC) speakers Wednesday include Williams, Collins, Bostic
- Hong Kong will cancel all demand side property cooling measures
- Bank of England’s Catherine Mann speaking Wednesday
- Hiccup in Japan’s wage talks? Reports that Toyota gives no answer to union demands
- South Korea says may give a clearer picture on short-sell ban sometime in March
- China developer Country Garden will fight a liquidation petition filed against it
- RBNZ Gov Orr: Central banks may have to hold rates higher than markets expect
- BoJ Exec Dir Shimizu – likelihood of hitting inflation target still not sufficiently high
- RBNZ Governor Orr press conference coming soon – live link
- CEO of Vitol expects crude to be fairly stable around $80 a barrel in 2024
- PBOC sets USD/ CNY mid-point today at 7.1075 (vs. estimate at 7.2023)
- NZD/USD has been smashed lower on the RBNZ cash rate hold decision
- RBNZ cash rate left unchanged at 5.5%
- Australian data – Q4 Construction Work Done 0.7% q.q vs. 0.8% expected
- Australian monthly inflation (January 2024) 3.4% y/y (vs. 3.6% expected)
- Some talk that US House Speaker Johnson willing to move funding deadline
- TD bullish risk, bearish USD: global economy strong, China stabilizing, Fed to cut
- Chinese vice foreign minister wants even stronger strategic coordination with Russia
- UBS outline a case for the S&P 500 to rise 20% in 2024 (spoiler – AI takes off)
- JP Morgan warns US equity rally at risk – higher for longer Fed, stagflation, election
- UBS says not to expect a sudden Bank of Japan rate increase
- Goldman Sachs CEO David Solomon expresses uncertainty about avoiding a US recession
- Private survey of oil inventories shows much larger headline crude build than expected
- Forexlive Americas FX news wrap: US consumer confidence dips
- Trade ideas thread – Wednesday, 28 February, insightful charts, technical analysis, ideas
It
was a busy session in Asia, kicking off with inflation data from
Australia. This was the January month CPI data which came in below
expected at 3.4% y/y, equal to the December month reading. The
monthly CPI data does not show all components of the CPI (that’ll
have to wait for the quarterly data release) it includes updated
prices for between 62 and 73 per cent of the weight of the quarterly
CPI basket. Nevertheless, it’s a more timely guide than the more
complete quarterly data. The further encouraging news from the
release was that the 3-month annualised rate came in at 2.7% while
the 6-month came in at 3%. These are both at or under the upper end
of the Reserve Bank of Australia 2-3% inflation target band. If
further evidence was needed that Australia’s rate hike cycle is
over, today’s data was it.
AUD/USD
dipped a few tics on the CPI data but soon popped to a new session
high, albeit all within a tiny range. Later the Australian dollar
lost much more ground as it followed the Kiwi lower after the
Reserve Bank of New Zealand policy announcement.
The
RBNZ left the cash rate unchanged at 5.5%. There had been some
expectations of a rate hike from the Bank. The New Zealand dollar was
marked sharply lower on the announcement and what was a more dovish
than expected statement from the Bank. The Bank gave no indication
that its considering raising rates, saying it “remains confident
that the current level of the OCR is restricting demand”. It also
moved well away from its previous statement, back in November, that
it was poised to hike again if needed. Indeed, the Bank also cut its
forecast for the rate track ahead. The RBNZ lowered its forecast cash
rate peak to 5.6%, it was previously projecting 5.7%. This
effectively reduces the risk
of further tightening. The Bank further foresees a cut in
mid-2025. At his press conference that followed RBNZ Governor Orr did
say there was some discussion of a rate hike at the meeting but it
was dismissed very quickly.
NZD/USD
was marked sharply lower and it has not recovered by much at all, tracking around
0.6114 as I update.
News
related to China’s property market also featured. Chinese developer
Country Garden Holdings said a liquidation petition has been filed
against it. The firm will oppose the petition but the news gave the
property sector a wobble on markets. This was soon recovered, and
more, on news from Hong Kong’s budget that all demand side property
cooling measures will be abandoned, providing support for the
property sector. Hong Kong’s Hang Seng property index moved up more
than 2%.
In
US (shutdown) politics, House Speaker Mike Johnson is looking at
another short-term stop-gap to avoid a shutdown. With Friday’s
deadline bearing down Johnson floated another Continuing Resolution
(CR) that would shift Friday’s deadline out a week to March 8 and the rest of government until March 22.