Morning Call Script - 31 Oct 2023
Overnight asset drivers & the impending data calendar
What’s Moved Overnight
1%... The BoJ's new "reference" point after they raised their inflation forecasts across the board 2023 to 2.8% (prior 2.5%), 2024 to 2.8% (prior 1.9%) and 2025 to 1.7% (prior 1.6%).
“It is appropriate for the Bank to increase the flexibility in the conduct of yield-curve control, so that long-term interest rates will be formed smoothly in financial markets in response to future developments."
They will "nimbly" work either side of 1%... The BoJ have redefined their limit as an "upper bound" rather than a rigid target
Bloomberg - YCC Verdict: Bank of Japan Is Guilty of a Messaging Mistrial
Nikkei - BOJ drops explicit 1% ceiling for 10-year JGB yields
USDJPY back above 150.00 as US fixed income now seen as the key driver ahead of Fed and Treasury issuance
Ahead of Wed refunding plan, the UST said they expect to borrow $76bln less than July
Reuters - US Treasury cuts Oct-Dec borrowing estimate to $776 bln, yields ease
China's PMIs missed expectations in October, manufacturing slipping back into contraction territory (49.5 vs Sept 50.2). AUD, CNH, HSI, CSI ... all in decline following the disappointing data set
Have a great day, and keep smiling!
Podcast for the Commute
The Day Ahead
EUR (10:00): GDP
EUR (10:00): Inflation Rate
CAD (12:30): GDP
USD (12:30): ECI
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