MILAN – Markets focused on US price data, which could give the Federal Reserve important indications on the next rate hikes and show whether the assessments that currently emerge from the bond market are more correct than from the equity market. As Bloomberg notes, in fact, the two assets have taken a different path. Bonds are cautious and worried, with yields on 2-year Treasuries posting +30 basis points in the past two weeks underscoring hawkish messages from the Fed. Over the same period, the S&P500 is up a point one and a half percent. Stocks seem to say that the Fed’s bet to curb inflation without derailing the economy will be successful, bonds see the need to keep rates above 5% peak and some are pushing rates as high as 6%. The expectation for inflation today is a decrease in the annual change from 6.5% to 6.2% in January, with one month at 0.5% or 0.1 points less than last month. However, some point out that the slowdown is certainly not rapid and some items in the basket – such as used cars – could indeed lead to a significant setback in the downward path of prices.
In an uncertain market panorama while waiting for this important data, the Japanese Government has formalized the name of Kazuo Ueda in the role of candidate to lead the Bank of Japan (Boj), in place of the current governor Haruhiko Kuroda, whose mandate expires in early April.
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Bank of Japan, Ueda next governor
Negative futures on Wall Street, flat Europe
A downward opening is currently expected for Wall Wtreet, which closed sharply higher yesterday, with the Dow Jones at +1.11% and the Nasdaq at +1.48%. While waiting for the key data on the trend of inflation in January, futures on the index of industrial stocks drop 0.10% and those on the index of technology stocks mark -0.11%. S&P index futures register -0.07%. A cautious opening is also expected for the European stock exchanges: futures on the Dax mark -0.02%, those on the Ftse 100 index +0.15% and those on the Eurostoxx +0.05%.
Bank of Japan, Ueda next governor
The Japanese government has formalized in Parliament the name of Kazuo Ueda as candidate to lead the Bank of Japan (Boj), in place of the current governor Haruhiko Kuroda, whose mandate expires at the beginning of April. As anticipated by the main Japanese media over the weekend, the 71-year-old Ueda is a specialist in macroeconomics and finance, currently a professor at Kyoritsu University, and previously served on the board of the Boj, helping the bank’s management formulate the plan quantitative easing and the accommodative policy of negative rates. If appointed, Ueda will be the first post-war Boj governor to come from academia: an almost obvious result, because the conservative-leaning governing coalition controls the majority in both chambers of the Diet. For the appointments of the deputy governors, the former head of the Financial Services Agency, Ryozo Himino, and the current executive director of the Boj, Shinichi Uchida, were designated. The three candidates will be heard by Parliament’s steering committees in the coming weeks and their nomination will have to be approved by both chambers. Among the new governor’s tasks is to stabilize the world‘s third largest economy, promoting wage growth in the presence of a progressive rise in inflation, currently at 4% – the highest level in 40 years, and the setting up of a gradual plan exit from the institute’s ultra-expansive monetary policy, initiated ten years ago by his predecessor, when the country was trying to put the prolonged phase of deflation behind it
Tokyo closes up 0.6%
The Tokyo Stock Exchange ends trading on the rise, following the advance on Wall Street, awaiting indications on the trend of inflation in the United States. The Nikkei reference list marks an increase of 0.64% to 27,602.77, adding 175 points, with technology in evidence. On the currency front, the yen stabilized against the dollar, at 131.90, after the presentation of the new candidate to lead the Central Bank of Japan (BoJ), Kazuo Ueda, and expectations of a change in the ultra-expansionary monetary policy setting of the ‘institute. At the exchange rate with the euro, the Japanese currency trades at 141.60.