Daily Update - 24th January 2019
BoJ left monetary policies unchanged today as widely expected. New economic projections are also released with upgrade in fiscal 2019 and 2020 GDP forecasts. But inflation forecasts was lowered rather sharply for fiscal 2019. The short term interest rate is held unchanged at -0.1%. And under the yield curve control frame work, BoJ will continue to kept 10-year JGB yield at around 0%, with some upward and downward movements allowed. The annual amount of JGB purchase will be kept at JPY 80T. Canadian Dollar turns softer after weaker than expected retail sales. Today will be quite a busy day, as not only the US Senate will meet, but also, European policymakers. The ECB is expected to maintain its current monetary policy unchanged after putting an end to QE last December. Head Draghi recently said that the economy is doing worse than expected, clarifying that a recession is still out of sight. Given that data has remained soft ever since the last meeting, the market is pricing in a dovish outcome, but not a dovishness that can rock the boat. Preliminary January PMIs for the EU and the US will also be out this Thursday, with the European indexes expected to have picked up slightly from final December figures, and US ones seen worsening, also when compared with the previous month. The Manufacturing Purchasing Managers Index (PMI) released by the Markit Economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the manufacturing PMI is an important indicator of business conditions and the overall economic condition in the United States Yesterday’s Market
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