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Markets await the Bank of Japan Monetary Policy Statement


U.S. equities were mixed over the course of yesterday’s trading. The Dow Jones Industrial Average lost 1.14% to close at 33910.85. The S&P 500 dropped 0.2% to close at 3990.97. The tech-heavy Nasdaq Composite gained 0.14% to close at 11095.11.

Equities were mixed heading into Thursday as market participants awaits monetary policy statement releases from the Bank of Japan, which shocked markets when it loosened its yield curve control during December of last year.

The benchmark U.S. 10-year treasury yield posted modest gains over the course of yesterday’s trading, and yields are currently sitting at 3.546%. The short-term 2-year treasury yield climbed 8 basis points and currently sits at 4.2%.

Goldman Sachs Group Inc. shares fell more than 6% after the financial services provider reported a drop in investment banking fees in the fourth quarter. Morgan Stanley, which also reported on Tuesday, delivered better earnings due to revenues from its assets and wealth management division. Morgan Stanley shares closed 5.91% higher over the course of Tuesday’s trading.

Main Pairs Movement

The Dollar index, which tracks the U.S. Greenback against a basket of major foreign currencies, traded mostly sideways over the course of Tuesday’s trading. The Greenback steadied after falling to its lowest point in more than 6 months. Recent inflation gauges have all signalled lowering price pressures, thus market participants have been rotating out of the Dollar and into equities.

EURUSD dropped 0.31% over the course of yesterday’s trading. The Euro has reached its short-term resistance level at around the 1.09 price region and is regressing back towards the 1.07 price region.

GBPUSD gained 0.78% over the course of yesterday’s trading. U.K. job reports indicated a strong labour market and rising wages, both making a case for more interest rate hikes by the BoE.

XAUUSD lost 0.38% over the course of yesterday’s trading. The Dollar denominated Gold weakened as the Dollar steadied around the 102 regions. The safe haven asset has enjoyed a smooth run to above the $1900 per ounce price level, but it remains to be seen whether the yellow metal can maintain its strong upward momentum.

Economic Data

CurrencyDataTime (GMT + 8)Forecast
JPYBoJ Monetary Policy Statement11:00 
JPYBoJ Outlook Report (YoY)11:00 
GBPCPI (YoY) (Dec)15:0010.5%
EURCPI (YoY) (Dec)18:009.2%
USDCore Retail Sales (MoM) (Dec)21:30-0.4%
USDPPI (MoM) (Dec)21:30-0.1%
USDRetail Sales (MoM) (Dec)21:30-0.8%