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  • richard evans

Yen higher on BoJ comments, market awaits US PCE

Good morning

 

Wednesday was yet another day of trading within narrow ranges,  GBPUSD lifted off its morning lows around 1.2625 to trade within a few points of 1.2665, where we are now, while EURUSD pushed up from 1.0800 to sit around the 1.0835 area.  EURUSD is actually a few points higher than that now, placing GBPEUR at 1.1680, just a touch lower than this time yesterday but certainly nothing to get excited about.  Feds officials all followed the usual theme of ‘not quite ready yet for rate cuts but hopefully later this year’.  ECB officials have been beating a similar drum, warning of the risks of cutting too early. 

 

There was a move overnight in USDJPY which traded lower from 150.70 to 149.70, pretty much where we are right now.  The move was down to some hawkish talk from BoJ’s Takata who said higher wage rises are leading to inflation finally coming within range of target and BoJ will need to look for  an exit from stimulus including ending negative rates, although drew the line at talking about exactly when that may happen.   

 

I am afraid I also have to report another decent shift higher in Bitcoin, which hit almost $64,000, meaning even those who bought it back in late 2021 at the highs and held onto it are back in the money, or at least very close.  I guess now we’re now going to have to put up with them shouting about how good they are at trading.  Mind you, anyone who managed to buy at this years lows would be up around 40% now.  The move comes as money flows into Bitcoin ETFs, with BlackRock seeing an inflow of $520m in just one day.

 

Today’s calendar sees the US PCE deflator which we know is closely watched by the Fed and will come under even more scrutiny after the recent shift higher in CPI.  A MoM reading of 0.4% and an annual rate of 2.8% are expected.  We also hear from several Fed officials although I will be very surprised if they move away from the consistent message their colleagues have been spreading, unless of course we get a real shock from the PCE.   Before all that we’ll have german inflation ahead of the key EU inflation release tomorrow.

 

So it’s the end of February and tomorrow we’ll be welcoming in March.  A leap year this year, I went through a stage when I was younger of being scared of 29th Feb, as it was the day women could ask men to marry them.  For some reason I feared that I’d be caught by someone, looking back I have to wonder what on earth I was thinking.

 

On the subject of not thinking, I travelled into the City yesterday, always a pleasure, except I have to ask when did having phone calls on the train, or watching videos, using the loudspeaker function, become acceptable.  Now I know for some people that any phone call on a train was deemed annoying, but it never worried me.  But to play music aloud, or to have both sides of a telephone call blaring out in public just isn’t on.  Its far worse than the high-pitched sound we used to hear from cheap Walkman headphones.  This is just rude and I’d like it to stop.  I don’t think this is me just being old. 

 

Finally, commiserations to Leeds who lost to a last minute goal from Chelsea which saw them exit the FA cup.  Man Utd overcame Nottingham Forest, Brighton lost to Wolves and Liverpool beat Southampton.  Quarter finals will be on 16th March.

 

Have a good day.  The rain that had been forecast has arrived, its coming down pretty hard at the moment and I think we can look forward to more of the same tomorrow.  It might stop in aq week or so!

 

 

-  08.55 German unemployment

-  13.00 German HICP

-  13.30 US PCE, personal income/spending, initial jobless claims

-  13.30 CAD GDP

-  14.45 US Chicago PMI

-  15.00 US pending home sales

-  15.50 Feds Bostic speaks

-  16.00 Feds Goolsbee speaks

-  18.15 Feds Mester speaks

-  18.30 US government funding vote

-  23.30 Japan unemployment

-  00.00 RBNZs Orr speaks

-  01.00 China NBS manufacturing PMI

-  01.45 China caixin manufacturing PMI

 

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