Morning wrap (24.02.2023)

• Wall Street indices had a volatile session yesterday but have ultimately finished trading with decent gains. S&P 500 gained 0.53%, Dow Jones added 0.33%, Nasdaq moved 0.72% higher and Russell 2000 jumped 0.71%

• Indices from Asia-Pacific traded mixed today. Nikkei gained 1.3%, S&P/ASX 200 moved 0.3% higher, Kospi dropped 0.6% and Nifty 50 traded flat. Indices from China traded 0.5-1.4% lower

• DAX futures point to a slightly higher opening of the European cash session

• Ueda, nominee to succeed Kuroda as BoJ chief, said that he sees inflation as peaking but warned that inflation trends do not improve, yield curve control will need to be maintained.

• Speaking of tweaking BoJ yield curve control tool, Ueda said that targeting shorter-dated yields is one of the options on the table (BoJ currently targets 10-year yield)

• Ueda did not make any specific comments on FX rates apart from saying that discussion on a specific JPY levels should be avoided  

• According to a Reuters poll, almost half of Japanese companies want the Bank of Japan to exit the negative rate policy. 47% of respondents think that new BoJ governor should change policy

• China made a cease-fire proposal to Russia and Ukraine. However, it is said that proposal gives too much concessions to Russia and is unlikely to win backing in Kyiv

• According to Der Spiegel report, Russia is holding talks with China over supply of  Chinese combat drones as well as know-how needed to manufacture them in Russia

• French finance minister Le Maire said that a new sanctions package on Russia is being prepared 

• Japanese CPI accelerated from 4.0 to 4.3% YoY in January (exp. 4.5% YoY). Core CPI accelerated from 4.0 to 4.2% YoY (exp. 4.2% YoY)

• Cryptocurrencies trade mixed but scale of moves is really small. Bitcoin drops 0.1%, Ethereum gains 0.1% and Dogecoin adds 0.2%

• Brent and WTI trade around 0.6% higher each while US natural gas prices drop 0.7%

• Gold gains 0.2%, platinum adds 0.1% and silver trades flat. Palladium rallies over 1%

• NZD and JPY are the best performing major currencies while CHF and USD lag the most

USDJPY experienced some volatility during Ueda confirmation hearings, but is ultimately trading little changed compared to pre-hearing levels. The pair is trading in a short-term 134-135 range. Source: xStation5