Equity markets are higher and higher. The fed and the boj coming through. How do we phrase this . Where we go from here . Dust of the few minutes ago we were talking about how the boe and the bank of canada raising rates in the fourth quarter. Requiring it to throw the conversation for next year. Have a look at this chart, the question really is how much can the likes of the boe and the bank of canada, given how strong their currencies have become, continue to follow the fed on its current rate policy . At what point does a policy notngthen, and become inflationary . Charts, whatat the it shows you is financial conditions in the United States in the bottom part. They are still fairly loose, and what that means is that despite the fact that you have a weak u. S. Dollar and currencies like the pound trading at fairly strong levels, it is not yet creating conditions where you would actually see disinflation coming through. In other words, there is scope for a lot of these big Central Bank
We had these purchasing managers indices out of china. Gauge, fiveyear highs the unofficial passion days,n manufacture slipping to 51. 6. The prithe deficit that has from the official one. We have some of these large firms distorting things. Large firms are feeling bullish. So. L firms less tailored toa move shore up the economy. Pboc announcing it will reduce the amount of cash the banks must hold in reserve. The economy where it has been scarce. Its not the only pmis we have had. The few places in asisa, asia, the markets are trading. Most closed for a public holiday. Pmi in japan. Haidi we had the pmi data from the nikkei business morning. We had japanese stocks building on gains. Boding well for corporate warnings in Japan Corporate earnings in japan. We we ending higher and sellingng for seleign for chinese stock g for ringgit stocks down. Is sliding except for the hong kong dollar. They could be under pressure given the retreat we are seeing in oil. Falling after setting the two
Over 25 billion. Betty i think i even read somewhere that discounted at lobsters were for sale for singles day. Everything was on sale. It is going to be another we have had a whopper of the week last week, it will be another busy week. I want to point to one very key report that will be happening here in the u. S. , that is the cpi, the Inflation Report on wednesday. Right before that we have ppi. What traders are saying is this is the last Inflation Report before the fed makes its decision next month, so it comes in either too hot or too cold, that could have a Significant Impact on the fed and their decision. Lets take a quick look at this it is just a bloomberg chart i pulled up here, it shows specifically how the yield curve has been flattening out. We seem to be on this particular expected rate hike path. Futures are showing over an 80 chance we will see a rate hike next month. If wer, as i mentioned, see a really wacky Inflation Report, that could pull back expectations. Yvonne
Agrees to buy a company for 5. 5 billion. Right, half an hour from the start of the trading week. No trading in the u. S. , Martin Luther king jr. Day. In japan, machinery orders better than expected, the ppi,cer price index, factory gate inflation better than predicted by economists, but still in negative terrain for december. But see how the markets are tracking. David. David thanks. We are looking at a mixed bag. Markets just opening up, taiwan, malaysia. Have a look at singapore. One of the better performers performingthe best market in asia save for the philippines. Mixed. Ight times index,verything else canceling out japan pulling things down, australia, flipped the board, some other benchmarks at the moment. Australia, that comes down to the fact you are getting a decent bid when it comes to the mining stocks, japan, strong japanese yen weighing on that index. Assets. Ook across 1. 20, roughly at those levels. Dollaryen, still close to session lows, 114. At 2. 4 yields unchanged
New fears of a bubble. Haidi beijing and washington prepare for top level talks over tensions and trade in north korea. Rishaad the secretary of the state turning up the heat on pyongyang, saying the gears of patients are over. Lets look at the markets, no trading in tokyo. , some data coming through, reaction to house price numbers out of china. Also the followthrough on this trip by secretary of state Rex Tillerson. That a lot to impact from tillerson visit. , currencies seems to be off the agenda and that g20 communicate. Forwonder what that means that fear of a currency war between the u. S. And china. We are 30 minutes away from the we are 30 minutes away from the open end the mainland and in hong kong. Sophie we do have new zealand stocks leading the drop, voice for the biggest fall since november, down 1. 2 . Aussie shares are snapping a four day advance. The yeartodate rally is a repricing for an oldschool economic recovery led by shipments to the u. S. Take a look at currencie