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The week ahead

Chris Scicluna
Emily Nicol
  • Stocks have started the week on the back foot while euro area bonds have made gains at the start of a week that will bring top-tier euro area data, more noise on Brexit and perhaps further clues on the outlook for Fed and BoJ policy.

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Japanese CPI shows few signs of life

Emily Nicol
Chris Scicluna
  • After Kuroda yesterday stated his preference for an upwards-sloping yield curve, the BoJ today reduced its JGB purchases across three maturity zones. Japan’s inflation data were predictably limp, suggesting a case for more substantive BoJ action next month.

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Fed eases policy, BoJ hints at tweaks ahead

Emily Nicol
Chris Scicluna
  • As expected, the Fed cut its target range for the fed funds rate by 25bps yesterday, while the BoJ left its current yield curve control framework unchanged. But while the updated dot-plots charts suggested that further Fed easing over coming quarters might be minimal, the BoJ hinted that some tweaks to policy might be forthcoming next month.

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Powell back in the spotlight

Chris Scicluna
Emily Nicol
  • Ahead of the FOMC announcement and another special NY Fed repo operation, stock markets in the Asia-Pacific posted a mix of gains and losses, partly responding to the lower oil price. Meanwhile, Japan’s latest economic data pointed to ongoing weakness in external demand  albeit a likely positive contribution to GDP growth from net trade in Q3, while euro area car registration figures were particularly weak.

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Oil and the Fed to dominate the week ahead

Chris Scicluna
Emily Nicol
  • Oil prices have inevitably spiked this morning in response to the weekend attack on Saudi oil facilities, adding a new source of uncertainty for bond markets after last week’s major sell-off. While the Fed seems bound to cut rates this week, its commentary and dot plots will be under scrutiny and the BoJ might tweak its policy guidance too.

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