- Broader USD trends have been relatively steady, after Wednesday's Fed induced dollar surge. AUD and NZD made fresh cycle lows before recovering modestly.
- Equities were steady post sharp losses after the open. US Tsys futures are little changed today, with ranges narrow. Agin this follows the very sharp Wednesday sell post the Fed.
- The BoJ was on hold as expected, with USD/JPY rising above 155.00. The market awaits Ueda's press conference. NZ GDP was much weaker than expected, but survey data points to a better 2025.
- Later US jobless claims, revised Q3 GDP, December Philly/Kansas Fed indices, November existing home sales and leading index. The BoE decision is announced but it is expected to be on hold.
MARKETS
US TSYS: Tsys Future Hold Steady Post Fed Sell-Off, GDP Later
- Tsys futures are little changed today, with ranges narrow. TU is +00⅛ at 102-20⅜ vs overnight lows of 102-19¼, while TY is -04 at 108-28+ vs overnight lows of 108-27.
- TY plunged through key support levels post the fed overnight, and briefly tested 108-28 (1.236 proj of the Oct 1 - 14 - 16 price swing)
- The Fed's hawkish move has caused sharp moves in pricing with just one 25bps rate cut in 2025 and low odds for a second. Fed fund futures are now pricing in a cumulative 33bps of cuts through to December 2025.
- Cash tsys have given back some of their gains, with yields now -0.5bps to +1.5bps, with the curve steepening. The 2yr yield is trading about 10bps higher for December, -0.5bps today at 4.348% remaining just below the November highs of 4.38%, while the 10yr has broken above the November highs, last +0.8bps at 4.522%, vs the yearly highs of 4.705%.
- Overnight, Powell emphasized renewed inflation concerns, signaling a shift in strategy as the Fed capped 2024 with a third consecutive rate cut. Despite recent reductions totaling 100bps, Powell acknowledged that inflation progress has stalled, delaying the timeline to reach the 2% target to 2027. The Fed scaled back expectations for rate cuts in 2025, with Powell stating that further reductions hinge on clearer inflation improvement.
- Later today we have GDP, Jobless Claims, Leading Index & Existing Home Sales
FED: MNI Fed Review-Dec 2024: New Cautious Phase Begins
Our review of the December FOMC meeting is here (PDF):
- The December FOMC meeting brought multiple hawkish surprises.
- Not only were the FOMC’s new rate and inflation projections raised more than expected, the Statement was more cautious, and there was even a surprise dissent against the well-anticipated 25bp rate cut.
- As Chair Powell put it in the press conference, the FOMC is “in a new phase in the process” of easing policy, and “from this point forward, it's appropriate to move cautiously and look for progress on inflation.”
- Yields and the US dollar rose sharply, and futures markets now show just one-and-a-half cuts remaining in the cycle.
- The degree to which the impact of potential Trump administration policy shifts impacted upon participants’ more hawkish outlooks was not entirely clear, but either way, a January rate cut looks extremely unlikely.
MNI BoE Preview - December 2024: 8-1 Vote for Hold
- We expect this week’s MPC meeting to see an 8-1 vote split for Bank Rate to be on hold (with Dhingra the sole dissenter looking for a 25bp cut) and with guidance largely unchanged.
- We look through where we expect each MPC member to sit within the "cases" framework.
- And we look at when we do expect the guidance to change, and what could be the triggers.
- In addition we summarise over 20 sellside views.
FOR THE FULL PUBLICATION PLEASE USE THE FOLLOWING LINK: MNI BoE Preview - Dec24.pdf
JGBS: Cheaper But Off Worst Levels After BOJ Decision
JGB futures remain weaker but well above morning lows after the BOJ decision, -24 compared to the settlement levels.
- The BOJ decided 8-to-1 to keep the unsecured overnight call loan rate at 0.25%, increasing chances of a January hike after ascertaining wage data and the outlook for the U.S. economy.
- Market players are focused on how BOJ Governor Kazuo Ueda refers to the outlook for monetary policy and the U.S. economy following the rate cut by the Federal Reserve at a post-meeting press conference.
- Today’s decision highlighted policymakers' reluctance to raise the policy rate.
- OIS pricing for today’s meeting was flat versus late October’s MPM, reflecting only an 8% probability of a 25bp rate hike. This marked a notable softening from the 50:50 chance priced in earlier this month. The next monetary meeting will be held on Jan. 23-24.
- Cash US tsys are flat to 2bps richer, with a steepening bias, in today’s Asia-Pac session after yesterday’s aggressive post-FOMC sell-off.
- Cash JGBs are 1-2bps cheaper across benchmarks, with a flattening bias. The benchmark 10-year yield is 0.7bp higher at 1.089% after making a fresh cycle high of 1.1130% earlier today.
- The swaps curve has bear-steepened, with rates flat to 5bps higher.
BOJ: On Hold As Expected, Few Statement Surprises, Ueda Press Conference Later
The BoJ left rates on hold as expected at 0.25%. This was in line with market pricing and the majority of economists also expected no change. There were strong hints in the media that the BoJ would stand pat, while our own onshore policy team in Japan noted political pressure was also likely curbing appetite to raise rates ahead of year end.
- The statement appears to contain few surprises. Uncertainties around Japan's economic and inflation outlook are high, which was cited before as a factor delaying rate hikes into 2025.
- Underlying inflation is expected to tick up gradually, in line with the economy continuing to grow above potential. As was previously expected as well, inflation is expected to be in line with the 2% goal in the second half of the outlook period.
- FX moves can be expected to impart a greater influence on inflation going forward. This is in line with the recent tight link between USD/JPY and imported price pressures, which we have highlighted in earlier bullets.
- The cycle between wages and prices, and wages and spending was also intensifying.
- There was a dissent from board member Tamura, who was in favor of a 25bps hike. Tamura is known to have a hawkish lean.
- The BoJ also released a review into its review on monetary policy (see this link).
- Focus now shifts to the Ueda press conference, due at 3:30pm local time. As we noted earlier the main focus will be on Q1 tightening risks.
STIR: BOJ Dated OIS Slightly Softer After BOJ Decision
After today’s BOJ policy decision, BOJ-dated OIS pricing is marginally softer.
- Nevertheless, pricing is currently -1bp to +12bps compared to pre-October BOJ MPM levels, with the September 2025 contract showing the strongest gains.
- For today’s decision, OIS pricing only reflected an 8% probability of a 25bp rate hike.
- Market expectations currently indicate: an 49% probability of a 25bp hike in January; a cumulative 83% chance by March; and a full 25bp increase not fully priced in until May 2025.
Figure 1: BOJ-Dated OIS – Today Vs. Pre-BOJ MPM (October)
Source: MNI – Market News / Bloomberg
AUSSIE BONDS: Sharply Weaker As FOMC & Infl Exps Weigh
ACGBs (YM -14.0 & XM -13.0) are sharply weaker and at Sydney session lows.
- Following a negative lead from US tsys in the wake of yesterday’s hawkish FOMC statement, dot plot, and press conference, the local market extended its decline after today’s data. This move was driven by the Melbourne Institute’s measure of consumer inflation expectations, which rose to 4.2%, the highest level since September. This uptick follows a drop to 3.8% in November, marking the first time inflation expectations had fallen below 4% since August 2021.
- The Australian economy is expected to log an annual growth rate of 1.1% in 2024, down from a previous projection of 1.4%: ANZ. (per MT Newswires)
- Cash US tsys are slightly mixed, with a steepening bias, in today’s Asia-Pac session after yesterday’s aggressive post-FOMC sell-off.
- Cash ACGBs are 13bps cheaper with the AU-US 10-year yield differential at-11bps.
- Swap rates are 12-13bps higher.
- The bills strip is sharply cheaper, with pricing beyond the first contract (-4) at -9 to -15.
- RBA-dated OIS pricing is 1-11bps firmer, with late 2025 leading. A 25bp rate cut is still fully priced by April.
- Tomorrow, the local calendar will see Private Sector Credit data alongside the AOFM’s planned sale of A$700mn of the 2.25% 21 May 2028 bond.
AUSTRALIA DATA: December Inflation Expectations Rise But Q4 Lower
The Melbourne-Institute’s measure of consumer inflation expectations picked up to 4.2%, the highest since September. In November it fell to 3.8%, below 4% for the first time since August 2021. Looking through the volatility, the Q4 average eased 0.4pp to 4.0%, which is good news and consistent with the RBA “gaining some confidence that inflationary pressures are declining”. The pickup in petrol prices since end-November likely boosted expectations. Also, Westpac reported in December that news on inflation continues to dominate consumers’ recall with their assessments improving “only slightly”. November CPI prints on January 8 and December/Q4 on January 29.
Australia quarterly trimmed mean CPI y/y% vs MI consumer inflation expectations
BONDS: NZGBS: Twist-Steepener After Weak Q3 GDP
NZGBs closed showing a twist-steepener, with benchmark yields 7bps lower to 4bps higher, after today’s weak Q3 GDP print.
- NZ-US and NZ-AU 10-year yield differentials closed 8bp and 7bps tighter respectively, with the former at its lowest level since early 2021.
- Cash US tsys are slightly mixed, with a steepening bias, in today’s Asia-Pac session after yesterday’s aggressive post-FOMC sell-off.
- Q3 NZ GDP printed significantly below consensus, the RBNZ’s November forecast of -0.2% q/q and domestic banks' predictions of -0.4%. The production-based measure fell 1% q/q after a downwardly revised Q2 of -1.1%, leaving the annual rate 1.5% y/y lower.
- There are still Q3 CPI (January 22) and jobs/wages (February 5) to come, but with data like this another 50bp rate cut looks likely on February 19.
- However, the ANZ business survey continued to sound a more positive note with the outlook rising to 50.3 from 48.0 in December. Business confidence was down moderately to 62.3 from 64.9, but remains elevated.
- Swap rates closed with rates 6bps lower to 3bps higher.
- RBNZ dated OIS pricing closed 5-13bps softer across meetings, with May 2025 leading. 50bps of easing is priced for February, with 117bps by year-end 2025.
- Tomorrow, the local calendar will see ANZ Consumer Confidence and Trade Balance data.
NEW ZEALAND: Broad-Based Contraction Likely To Mean Another 50bp Cut
Q3 NZ GDP printed significantly below consensus and the RBNZ’s November forecast of -0.2% q/q and domestic banks at -0.4%. The production-based measure fell 1% q/q after a downwardly-revised Q2 at -1.1% leaving the annual rate 1.5% y/y lower. Expenditure GDP fell 0.8% q/q in both Q2 and Q3 to be down 1% y/y. Q2 domestic demand was revised sharply lower. There are still Q3 CPI (January 22) and jobs/wages (February 5) to come, but with data like this another 50bp rate cut looks likely on February 19.
NZ GDP production %
- While Q2 GDP was revised significantly lower, the preceding two years were revised higher with the former Q4 2022/Q1 2023 recession no longer an event. Annual data was incorporated into the national accounts.
- Activity declined in 11 of the 16 industries in Q3, with the largest drops in manufacturing, business services and construction. Agriculture and real estate rose.
- Investment has been very weak falling for the last six quarters. It was down 2.9% q/q & 5.0% y/y in Q3 with both building and other assets down over 2% on the quarter. The December ANZ business survey is out later today and has been pointing to an improvement in the capex outlook.
- Private consumption contracted 0.3% q/q, driven by spending on household essentials, but is still 0.5% y/y higher. There were increased purchases of durable goods though.
- Government spending fell 1.8% q/q to be down 2.2% y/y, as the new government cuts outlays to fund tax cuts.
- Exports of goods and services were also weak falling 2.1% q/q but are still up 2.5% y/y. Imports fell 0.4% q/q to be up 0.3% y/y. Net exports detracted 0.4pp from growth.
NZ consumption vs GFCF y/y%
Source: MNI - Market News/Refinitiv
NEW ZEALAND: ANZ Business Survey Points To Turning Point
After extremely weak Q3 growth data, the ANZ business survey continued to sound a more positive note with the outlook rising to 50.3 from 48.0 in December. Business confidence was down moderately to 62.3 from 64.9, but remains elevated. According to this survey, Q4 should see an improvement in activity as the past own activity rose 10 points to be at zero.
NZ ANZ business confidence vs activity outlook
Source: MNI - Market News/Refintiv
- The RBNZ is forecasting headline CPI to ease 0.1pp to 2.1% y/y in Q4, which quarterly business inflation expectations are consistent with. However, there was a pickup in price/cost components in December, which will be monitored.
- 3-month ahead cost expectations rose sharply to 70.1 from 62.9 with ANZ noting the increase was across sectors except retail but is currently putting down to volatility. Also wage expectations in 12 months picked up to 79.2 from 75.5.
- As a result, 3-month ahead pricing intentions remained high at 42.7 up from 42.5 and 1-year inflation expectations rose 0.1pp to 2.6%.
NZ ANZ business price/cost measures
- In terms of activity, only employment and export intentions didn’t rise. Residential & commercial construction were their highest since 2021, helping to drive investment intentions to 21.5 from 18.0. This is good news given capex fell 5.0% y/y in Q3.
- Employment compared to a year ago deteriorated to -13.3 from -11.6 with every sector negative and hiring intentions easing only 0.4 points to 14.3, but should improve given the pickup in activity.
- When asking firms what their biggest problems were, costs/prices were steady to lower in Q4, but finding skilled labour increased signalling some constraints.
FOREX: Yen Weakens Through 155.00 Post On Hold BoJ, Steadier Trends Elsewhere
G10 FX moves initially saw an extension of USD gains from Wednesday trade in the first part of Thursday dealing. AUD and NZD made fresh cycle lows, but sentiment has stabilized as the session progressed. The BoJ left rates on hold on expected, with USD/JPY breaking back above 155.00 and holding above this level since.
- Aggregate moves have been fairly modest though in the G10 space, after Wednesday's sharp USD rally as the Fed delivered a hawkish 25bps cut. The BBDXY was last 1301.5, little changed for the session.
- USD/JPY was supported on dips prior to the BoJ outcome and reached fresh highs of 155.44 post the decision (levels last seen on Nov 21). The BoJ decision left few surprises outside of a dissent from known hawkish board member Tamura (who was in favor of a 25bps hike).
- We now await Ueda's press conference in a few hours. Focus will be firmly on Q1 hiking risks and yen could weaken if Ueda doesn't sound hawkish enough.
- AUD/USD fell to fresh cycle lows under 0.6200 before recovering some ground, last near 0.6220/25. Inflation expectations edged up, but were down for Q4 as a whole.
- NZD/USD fell to fresh lows of 0.5608, with much weaker Q3 GDP weighing and raising odds of a further 50bps cut in early 2025. Business sentiment data from ANZ suggested an improved outlook into 2025 though.
- EUR/USD is slightly higher, last near 1.0380, but still within striking of recent lows (1.0335 in early Dec).
- Regional equities are down across the board, while US equity futures are close to flat. US yields were down in the first part of trade but sits back close to flat/slightly higher in latest dealings.
- Later US jobless claims, revised Q3 GDP, December Philly/Kansas Fed indices, November existing home sales and leading index. The BoE decision is announced but it is expected to be on hold.
EQUITIES: Markets Steady After Morning Plunge, BoJ Unchanged
- Asian markets tumbled on Thursday, with the MSCI Asia Pacific Index dropping 1.7%, marking its largest decline in over a month. The sell-off followed a "hawkish cut" by the Federal Reserve, which reduced its 2025 rate-cut expectations, citing persistent inflation concerns. Wall Street suffered a sharp sell-off, with the S&P 500 dropping 3% and the Nasdaq falling further after the Mag 7 Index dropped 3.35% led by a 8.30% drop from Tesla.
- US equity futures have found some support during the Asian session with Dow futures +0.25%, S&P 500 +0.15%, while Nasdaq futures are flat.
- Tech-heavy markets in South Korea (KOSPI -1.50%) and Taiwan (TAIEX -1.80%), alongside Australian equities (-1.90%), led regional losses, while declines in mainland China were muted on expectations of continued loose domestic policy.
- Chinese equities have performed the best across the Asian region today, however the CSI300 still trades 0.35% lower with losses in real estate, and consumer staples dragging the market into the red, Chinese tech stocks are trading higher. In Hong Kong, the HSI is 1% lower, with the Mainland Property Index 1.45% lower and the HSTech Index 1.35% lower.
- The BoJ held rates steady, weakening the yen and saw the Nikkei briefly pare earlier losses, however they were short live and the index remains 0.90% for the day, the TOPIX performing better down just 0.35%.
- Outside of the Fed & BoJ there has been little else driving the markets today. Equities markets remain well in the red, however they have held steady post the open.
ASIA STOCKS: Asian Equity Flows Mixed Wednesday
The Tech heavy markets of South Korea & Taiwan saw small inflows on Wednesday, however this is likely to be more than erased today. Thailand has seen 9 straight session of selling, Philippines 6 and Indonesia 5 straight sessions of selling.
- South Korea: Recorded inflows of $279m yesterday, but a 5-day total of -$847m. YTD flows remain positive at +$3.15b. The 5-day average is -$169m, worse than the 20-day average of -$118m and the 100-day average of -$155m.
- Taiwan: Saw inflows of $205m yesterday, with a 5-day total of +$322m. YTD flows remain deeply negative at -$16.62b. The 5-day average is +64m, better than the 20-day average of -$49m and the 100-day average of -$135m.
- India: Posted outflows of -$281m yesterday, with a 5-day total of -$310m. YTD flows remain positive at +$816m. The 5-day average is -$62m, worse than the 20-day average of +$165m and the 100-day average of -$32m.
- Indonesia: Recorded outflows of -$29m yesterday, with a 5-day total of -$394m. YTD flows remain positive at +$1.20b. The 5-day average is -$79m, worse than the 20-day average of -$32m but better than the 100-day average of +$13m.
- Thailand: Saw outflows of -$11m yesterday, with a 5-day total of -$124m. YTD flows are negative at -$4.10b. The 5-day average is -$25m, worse than the 20-day average of -$21m and the 100-day average of -$8m.
- Malaysia: Experienced outflows of -$34m yesterday, with a 5-day total of -$245m. YTD flows are negative at -$831m. The 5-day average is -$49m, close to the 20-day average of -$53m but worse than the 100-day average of -$9m.
- Philippines: Posted outflows of -$8m yesterday, with a 5-day total of -$57m. YTD flows remain negative at -$382m. The 5-day average is -$11m, worse than the 20-day average of -$8m and the 100-day average of +$1m.
Table 1: EM Asia Equity Flows
OIL: Crude Moderately Lower As Fed Drives USD Strength
Oil prices are moderately lower during APAC trading today after closing Wednesday little changed. Brent is down 0.4% to $73.08/bbl after falling to $72.83, while WTI is 0.5% lower at $69.70 off the low of $69.43. The stronger USD is weighing on dollar-denominated crude but so far it is only a muted reaction (BBDXY is slightly higher today). The Fed projected fewer rate cuts in 2025, which may add to market worries about the demand outlook, especially continued weakness in China.
- Crude is lower this week as the non-OPEC supply outlook, soft China data, stronger USD and prospects of a Gaza ceasefire pressured prices. Whereas a US crude drawdown and expectations of tighter sanctions on Russia and Iran provided support. Given these ongoing factors, oil prices have been range trading since October.
- Fed Chair Powell said in the press conference that given recent easing, “our policy stance is now significantly less restrictive” and so the FOMC can “be more cautious as we consider further adjustments” to rates.
- EIA-reported oil inventories fell 934k barrels last week. US exports increased 1.8mn barrels, highest since July, signalling robust global demand. Gasoline stocks rose 2.35mn though, fifth consecutive weekly build, while distillate fell 3.18mn.
- Later US jobless claims, revised Q3 GDP, December Philly/Kansas Fed indices, November existing home sales and leading index. The BoE decision is announced but it is expected to be on hold.
- Rate cuts are good for Gold and last night’s cut, whilst watering down expectations for cuts in 2025, saw gold move aggressively lower.
- Having opened Wednesday at US$2,646.83, like a lot of markets gold traded sideways ahead of the Fed, but the move post the announcement saw gold fall to $2,585.35, a -1.85% decline back to levels it was in mid-November.
- It has rebounded somewhat in trading today and is back up to $2,607.60 in the afternoon session.
- The Feds quarterly forecasts showed that several voting members are now penciling in less cuts that what the market has priced resulting in bonds selling off, the USD up and gold down.
- The sell off does little to dent the overall performance of gold year to date, enjoying more than 20% appreciation.
CHINA: Yesterday’s Move Short Lived.
- The endless move lower in yield took a break yesterday with China’s 10YR yield backing up +3.5bp.
- News broke that the PBOC had held meetings with key institutions that were known to be aggressive buyers of bonds, supposedly driving the bull market.
- The purpose of the meeting it is believed was to remind participants of good practices, the need to back all decisions by sound research and understanding of interest rate differentials.
- The PBOC has attributed perceived ‘aggressive trading’ as part of the issues with the current rally.
- The news struck a chord with markets yesterday with the CGB10YR rising +3.5bps on the day.
- The PBOC’s actions are consistent with their actions of recent months in reminding participants as to proper behaviour, yet the impact is limited.
- The source of the bond rally stems from a multi-year decline in the property sector, the dominant sector for investment in China, coupled with volatility in equity markets.
- This has led to asset allocation to bonds.
- This asset allocation comes at a time of slowing growth, interest rate cuts and liquidity support for markets – all of which are supportive of bonds also.
- The move by the PBOC appears to be more of a reminder to adhere to appropriate practices, rather than an attempt to de-rail the bond rally.
- With an estimated CNY10bn of new issuance expected in the near term, and the potential for much more than that to follow, lower yields may not necessarily be a bad thing.
- Yesterday’s warning has seemingly had fleeting success in stemming the rally because as globally bond yields are taking a lead from the move higher in the US overnight, bond yields not participating in the selloff in China with yields virtually unchanged across the curve.
- CGB 2YR 1.158%, CGB 5YR 1.447%, CGB 10YR 1.767%, CGB 30YR 2.003%.
ASIA: Bond Yields React to the FED’s Hawkish Cut.
- The Fed’s move overnight presented a gift with one hand and took it away with the other in the market reaction today.
- The major currencies were weaker across the board today, a move that if sustained could make their exports more competitive but their cost of funding (i.e. the bond market) saw higher yields.
- The FED’s rate cut was accompanied by guidance on potentially two rate cuts in 2025, much less than was priced in and saw bonds sell off, driving yields higher.
- Major Asian markets have followed this lead today with some outsized moves.
- The Philippines (ahead of tonight’s rate decision by the BSP) has seen the largest sell off with the 10YR yield +8.5bp to 5.315%.
- Malaysian yields were not immune with the 10YR +5.7bp to 3.872%.
- Indonesia yields, just a day after their Central Bank held rates steady has seen their currency under real pressure and bond yields higher with the 10YR +4.5bps to 7.09%.
- South Korean markets have moved significantly lower in yields in recent weeks given the political turmoil and some of that has unwound today with the 10YR +4.5bps to 2.806%.
TAIWAN: Central Bank to Remain on Hold
- Taiwan’s Central Bank is proving hawkish when compared to its regional peers and today’s interest rate decision should see more of the same.
- In the face of property market rally the likes many of not seen before, the central bank has not followed regional peers in cutting rates.
- Housing prices have reached all-time highs earlier this year with rampant demand driving median house prices to 16 times median household income, compared to 3.8 times in Singapore.
- Interest rates for new homes are offered in Taiwan in the mid 2% range and with longer terms available and principal holidays for five years, there is little sign of the demand subsiding.
- The Central Bank has increased the amount of deposits the banks have to lodge with them in a bid to drain liquidity from the system and could possibly raise this again today.
- All 25 economists surveyed on BBG are predicting no change and as Taiwan enters its 24th straight quarter of house price appreciation, there appears little chance the Central Bank will change course.
ASIA FX: CNH & KRW Steady After Sharp Wednesday Losses
In North East Asia FX trends have been mixed. USD/CNH sits back near 7.3100, off earlier highs of 7.3269. The CNY fixing was set much stronger than expected, with the error term widening back to late July levels. CNH T/N forward points also spiked higher, discouraging fresh longs in USD/CNH. Broader USD sentiment was also slightly softer, except for yen, which weakened post the on hold BoJ outcome.
• USD/CNH upside is likely to remain in focus, with late 2023 highs above 7.3400 the next potential upside target. This may have to wait until the USD/CNY fixing gets above 7.2000 though.
• Spot USD/KRW got to fresh highs of 1460.2, but sits lower now last under 1450, still 0.70% weaker in won terms. The National Pension Service will keep in place its strategic FX hedging cap of 10%, while the NPS and BoK swap facility will expand to $65bn (from $50bn) and will continue for another year. These moves are designed to take the impact of NPS's spot USD/KRW purchases out of the market (as it invests offshore). Still USD/KRW spot has consolidated its break above post martial law highs (near 1444.5). Upside levels now rest at 1500, last seen in 2009 post financial crisis.
• USD/TWD has broken higher, last in 32.65/70 region, levels last seen in early August. The CBC is likely to remain on hold later.
INDIA: Country Wrap: RBI Backs Off its Currency Defense.
- India’s Central Bank Dials Down Use of NDFs to Fight Dollar (source: BBG).
- China Vows to Maintain Border Peace With India as Ties Stabilize (source: BBG).
- India’s Record Gold Import Said to Be Due to Calculation Error (source: BBG).
- India’s NIFTY 50 declined -0.56% yesterday and is off -1.00% in early trading to potentially deliver a fourth successive day of declines.
- INR: has remained resilient in the face of a sell-off today down only -0.13% to 85.06.
- Bonds: India’s 10YR yield is 4.5bps higher today at 6.791%
INDONESIA: Country Wrap: BI Still Sees Room for Easing.
- Indonesia Holds Key Rate to Bolster Falling Rupiah Currency (source: BBG)
- Bank Indonesia to Buy $9.3 Billion in Bonds as Covid Debt Due (source: BBG)
- Bank Indonesia Pledges Continued Intervention Amid Weak Rupiah (source: BBG)
- Bank Indonesia Still Sees Room for Easing, But Timing Not Right (source: BBG)
- The Jakarta Composite was one of the worst performers in the region today down -1.60%
- IDR: is under pressure, firmly through the 16,000 level at 16,287.
- Indonesia yields, just a day after their Central Bank held rates steady has seen their currency under real pressure and bond yields higher with the 10YR +4.5bps to 7.09%.
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 19/12/2024 | 0700/0800 | * |  DE | GFK Consumer Climate |
| 19/12/2024 | 0745/0845 | ** |  FR | Manufacturing Sentiment |
| 19/12/2024 | 0830/0930 | *** |  SE | Riksbank Interest Rate Decison |
| 19/12/2024 | 0900/1000 | *** |  NO | Norges Bank Rate Decision |
| 19/12/2024 | 0900/1000 | ** |  EU | EZ Current Account |
| 19/12/2024 | 1200/1200 | *** |  GB | Bank Of England Interest Rate |
| 19/12/2024 | 1200/1200 | GB | BOE MPS and Minutes | |
| 19/12/2024 | 1200/1200 | GB | BOE Agents' summary of business conditions | |
| 19/12/2024 | 1200/1200 | *** | GB | Bank Of England Interest Rate |
| 19/12/2024 | 1330/0830 | *** |  US | Jobless Claims |
| 19/12/2024 | 1330/0830 | *** | US | GDP |
| 19/12/2024 | 1330/0830 | * |  CA | Payroll employment |
| 19/12/2024 | 1330/0830 | ** | US | Philadelphia Fed Manufacturing Index |
| 19/12/2024 | 1330/0830 | ** | US | WASDE Weekly Import/Export |
| 19/12/2024 | 1500/1000 | *** | US | NAR existing home sales |
| 19/12/2024 | 1530/1030 | ** | US | Natural Gas Stocks |
| 19/12/2024 | 1600/1100 | ** | US | Kansas City Fed Manufacturing Index |
| 19/12/2024 | 1630/1130 | * | US | US Bill 08 Week Treasury Auction Result |
| 19/12/2024 | 1630/1130 | ** | US | US Bill 04 Week Treasury Auction Result |
| 19/12/2024 | 1800/1300 | ** | US | US Treasury Auction Result for TIPS 5 Year Note |
| 19/12/2024 | 1900/1400 | *** |  MX | Mexico Interest Rate |
| 19/12/2024 | 2100/1600 | ** | US | TICS |
| 20/12/2024 | 2330/0830 | *** |  JP | CPI |
| 20/12/2024 | 0700/0700 | *** | GB | Public Sector Finances |
| 20/12/2024 | 0700/0800 | ** | DE | PPI |
| 20/12/2024 | 0700/0800 | ** | SE | PPI |
| 20/12/2024 | 0700/0800 | ** | SE | Retail Sales |
| 20/12/2024 | 0700/0700 | *** | GB | Retail Sales |
| 20/12/2024 | 0745/0845 | ** | FR | PPI |
| 20/12/2024 | 0800/0900 | ** | SE | Economic Tendency Indicator |
| 20/12/2024 | 0900/1000 | ** |  IT | ISTAT Business Confidence |
| 20/12/2024 | 0900/1000 | ** | IT | ISTAT Consumer Confidence |
| 20/12/2024 | 1100/1200 | ** | IT | PPI |
| 20/12/2024 | 1100/1100 | ** | GB | CBI Distributive Trades |
| 20/12/2024 | 1330/0830 | *** | US | Personal Income and Consumption |
| 20/12/2024 | 1330/0830 | ** | CA | Retail Trade |
| 20/12/2024 | 1330/0830 | ** | CA | Retail Trade |
| 20/12/2024 | 1330/0830 | *** | US | Personal Income and Consumption |