Morning wrap (28.07.2023)

• US indices finished yesterday's trading lower - S&P 500 dropped 0.64%, Dow Jones moved 0.67% lower and Nasdaq declined 0.55%. Small-cap Russell 2000 dropped around 1.3%

• Indices from Asia-Pacific traded mostly lower today - Nikkei dropped 1.2%, S&P/ASX 200 traded 0.8% lower, Kospi traded flat and Nifty 50 dropped 0.2%. 

• Indices from China bucked the Asia-wide trend and traded 1-2% higher today

• DAX futures point to a more or less flat opening of the European cash session

• Bank of Japan left interest rates and other monetary policy settings unchanged. BoJ noted that it will be more flexible when it comes to yield curve control

• While bandwidth around BoJ target yield was left unchanged at +-0.50% but Bank explained that it may now allow it to deviate more than that

• Japanese yen dropped following BoJ decision but has since recovered from losses and is the best performing G10 currency at press time. USDJPY dropped to 139.00 mark

• According to Bloomberg report, Saudi Arabia is likely to extend its 1 million barrel output cut into september

• CPI inflation in the Japanese Tokio area decelerated from 3.2 to 3.0% YoY in July (exp. 2.9% YoY). Core-core CPI inflation (excluding food and energy) accelerated from 3.8 to 4.0% YoY

• Australian retail sales dropped 0.8% MoM in June (exp. 0.0% MoM)

• Australian PPI inflation decelerated from 0.7 to 0.5% QoQ in Q2 2023 (exp. 0.9% QoQ)

• South Korean industrial output dropped 1% MoM in June (exp. -0.3% MoM). On an annual basis, the drop reached 5.6% YoY (exp. -5.5% YoY)

• Major cryptocurrencies trade little changed today - Bitcoin trades flat, Ethereum gains 0.1%, Ripple drops 0.3% and Dogecoin declines 0.7%

• Oil trades flat while US natural gas prices trade a touch higher

• Precious metals gain - gold adds 0.3%, silver trades 0.5% higher and platinum gains 0.6%

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

USDJPY experienced massive volatility following today's BoJ decision. Pair jumped in a knee-jerk move but gave back all of the gains later on and dropped below pre-decision levels. Source: xStation5