Read on the Trading Floor - 08 Feb 2024
Today’s focus… Uchida, Barkin, Initial Claims, 30y auction and more
Macro Themes At Play
Theme 1 - Uchida + Barkin + Initial Claims = USDJPY 149.50
Theme 2 - Another day, another wave of CB speak
Theme 3 - Oil up over 2%
Further reading and listening of note
Theme 1 - Uchida + Barkin + Initial Claims = USDJPY 149.50
A move that started overnight with Deputy BoJ Gov Uchida speech (“unlikely to raise interest rates aggressively, even after ending its negative interest rate policy.”) has continued into the NY session. USDJPY heading to 150 as the market pushes BoJ expectations deeper into H2. 10yr US yields have also sold off after Initial Claims reset lower (218k from last week's 227k) and once again the Fed's Barkin reiterates the mantra that they've got time before they need to cut. This evening's 30year auction will be a real test for markets appetite as there is no similar tenor maturing this quarter. The 10year saw strong demand yesterday but its already offside and failed to ignite a material yield rally. The real focus is the 30y auction, does the market want more at these prices as the Fed cutting cycle comes under scrutiny and US productivity / growth remains world leading?
Bloomberg - BOJ’s Uchida Says Hard to See Sharp Hiking Pace Post-Liftoff
Bank of Japan - Uchida's full speech - Japan's Economy and Monetary Policy
Brent Donnelly - A Great Speech
Bloomberg - US Treasury’s Biggest-Ever 10-Year Auction Garners Solid Demand
USDJPY 149.50, US 10s @ 4.15%
Source: Tradingeconomics.com
Theme 2 - Another day, another wave of CB speak
Rather than jumping around the internet from website, to portal and getting inundated with spam and algos, track key central bank speeches in dedicated channels on Harkster.com, your research inbox.
ECB Wunsch (12:00)
ECB Lane (15:30)
Fed Barkin (13:30)
BoE Mann (15:00)
Theme 3 - Oil up over 2%
No deal as Israel rejects Hamas hostage offer. At least it seems like we're starting to get the guide rails for a longer-term agreement. Whether either side will be willing to give up enough to satisfy a two-state solution is a long and tricky road ahead for global and regional leaders. Hopefully we're another step closer...
Oilprice.com - Oil Gains 2% as Israel Rejects Gaza Ceasefire Deal, US Gas Inventory Plummets
FT - Blinken pushes for ‘enduring’ Gaza peace deal in Riyadh visit
FT - Qatar says Hamas ‘positive’ on proposed deal to release Gaza hostages
ZeroHedge - Hamas Responds To Ceasefire Offer With 135-Day 'Truce Plan', But Israel Pessimistic
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