- Barclays Bank lowered its Brent crude price forecast by $8 per barrel
- A Wall Street Journal survey of economists indicates that the probability of a recession in the United States has declined sharply
- Household spending in Australia, December, -3.1% m/m (previously +1.8%)
- Reports appear to indicate that Qatar has stopped sending LNG tankers through the Bab al-Mandab Strait
- JPMorgan CEO Dimon warns inflation may be firmer and interest rates higher than markets expect
- Oil – The Houthis fired an anti-ship cruise missile at a US Navy ship
- Mr. JGB: Japan’s stable inflation target can be achieved in 2024, but not in the way the Bank of Japan thinks
- The People’s Bank of China left the multilateral interest rate unchanged – summary
- Schumer says US Congressional leaders have agreed to a temporary funding measure
- The People’s Bank of China sets the MLF rate at 2.5% (previously 2.5%).
- Japan’s two-year bond yield fell below zero, for the first time since July 2023
- The People’s Bank of China sets the reference rate for the US dollar against the Chinese yuan today at 7.1084 (vs. estimate of 7.1684)
- Australia’s own survey of inflation rose 1% month-on-month in December, the biggest rise in 17 months
- Taiwan presidential election: William Lai of the pro-sovereignty Democratic Progressive Party wins
- The People’s Bank of China is expected to cut interest rates today
- UBS targets a higher S&P 500, sees strong earnings and a solid economy
- Six people were arrested on charges of planning to close the London Stock Exchange
- Barclays has moved its forecast for the Fed’s first rate cut to March (from June)
- Weekend: ECB chief economist Philip Lane nominates June ‘key data’ for interest rate cuts
- Weekend: A former People’s Bank of China official says China’s property market decline could continue for another two years
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It was only a light day of market news flow, although there were some potentially important items for the energy markets:
- There are reports that Qatar has halted its shipments of liquefied natural gas through the Bab al-Mandab Strait (and thus the Suez Canal).
- The Houthis fired a cruise missile at a US Navy ship
If you take a quick look at oil prices, they are high, but they are barely noticeable.
In political news we had
- Saturday’s election in Taiwan saw William Lai, of the pro-sovereignty Democratic Progressive Party, elected president, despite the party losing its parliamentary majority.
- US Senate Democratic Leader Schumer said that congressional leaders agreed to a temporary funding measure
In central bank developments, the People’s Bank of China set the interest rate on its medium-term lending facility for this month at a fixed rate of 2.5% despite widespread (but not unanimous) expectations of a 10 basis point cut. This comes despite the continued decline in inflation in China and reflects the People’s Bank of China’s concern about the weakness of the yuan, which leads to the outflow of capital abroad.
The USD/JPY pair rose during the session, as a drop in two-year Japanese government bond yields below zero weighed on the yen.
It has been a mixed bag among the major currencies. The US dollar was weaker against the euro, British pound and Canadian dollar. The Australian and New Zealand dollars performed poorly.
The yuan rose overseas during the session.