FUNDAMENTAL NEWS AND TECHNICAL ANALYSIS REPORT – 15 FEBRUARY 2023

15 Feb 2023

Japanese Prime Minister Says He Hopes New BOJ Chief Will Heed Government Goal of Higher Wages

Asian stock market closes in green on Tuesday. The Shanghai Composite is in green 0.28% at 3293.28. Overall, the Singapore MSCI is down 0.05% at 300.95. Over in Hong Kong, the Hang Seng Index is down 0.24% at 21113.76. In Japan, the Nikkei 225 is up 0.64 at 27602.77. While the Topix index is up 0.78% at 1993.09, South Korea’s Kospi is up 0.53% at 2465.64. Australia S&P/ASX 200 up 0.18% at 7430.90.

Top News of the Day: –

Japanese Prime Minister Fumio Kishida said on Wednesday he hoped the central bank’s new leadership will take into account the government’s goal of achieving higher wages and sustained economic growth, in guiding monetary policy.

Kishida also said it was premature to say whether the government and the Bank of Japan (BOJ) should revise a joint policy statement, which commits the BOJ to achieve its 2% inflation target at the earliest date possible.

“We’d like to achieve structural wage growth and sustainable economic growth. I hope the new BOJ leadership guide policy taking account our policy direction,” Kishida told parliament.

The government on Tuesday named academic Kazuo Ueda as its pick to become next central bank governor, a surprise choice that could heighten the chance of an end to its unpopular yield control policy.

Market Summary as per 14/02/2023:

European equities Tuesday closing. The DAX futures contract in Germany traded down 0.11% at 15380.56, CAC 40 futures up 0.07% at 7213.81. UK 100 futures contract in the U.K. up 0.08 at 7953.85.

In the U.S. on Wall Street, the Dow Jones Industrial Average Closed down 0.46% at 34089.27. The S&P 500 down 0.03% at 4136.13 and the Nasdaq 100 up 0.57% at 11960.14, NYSE 0.17% closes down at 16025.11.

Top Market News Today:

In the Forex market, GBPUSD down 0.55% at 1.2103. The USDJPY up 0.12% at 133.25, The USDCHF up 0.27 at 0.9236. EURUSD down 0.24% at 1.0711. EUR/GBP up 0.37% at 0.8851. The USD/CNY up 0.27% at 6.8436 at the time of writing.

In the Commodity market U.S. Gold futures down at 0.54% $1,844.47. Elsewhere, Silver futures down 0.42% at $21.74 per ounce, Platinum down 0.59% at $925.00 per ounce, and Palladium down 2.43% at $1526.50.

Brent Crude Oil down 1.26% at $84.48 per barrel.

In the Cryptocurrency Markets, Bitcoin at 22148.70 down at 0.26%, Ethereum down 0.25% at 1551.17, Litecoin at 96.46 up 0.62%, at the time of writing.

Top Market Segment to Watch Out Today:

OIL– Oil prices extend losses on Wednesday as a much bigger-than-expected surge in the U.S. crude inventories and expectations of further interest rate hikes sparked concerns over the prospect of weaker fuel demand and economic recession.

U.S. crude inventories rose by about 10.5 million barrels in the week ended Feb. 10, according to market sources citing American Petroleum Institute (API) figures on Tuesday.

The build was much larger than the 1.2 million-barrel rise those nine analysts polled by Reuters had expected, potentially pointing to a drop in fuel demand.

Economic News:

US: – The United States could sanction more banks with links to Russia and will step up enforcement against any dodging existing rules, a senior U.S. official told Reuters, as Western powers seek to reinvigorate efforts to isolate Moscow.

The comments come as Western diplomats seek to agree a new raft of sanctions for the anniversary of Russia’s invasion of Ukraine on Feb. 24.

“We have immobilised about 80% of the assets in the Russian banking sector,” James O’Brien, head of the U.S. State Department’s Office of Sanctions Coordination, told Reuters.

“We are looking at additional banks and financial institutions to see how Russia deals with the outside world. It is very possible that there will be more action.”

The West blocked several Russian banks’ access to the international SWIFT payments system soon after Moscow invaded Ukraine in February last year, with Sberbank and VTB forced to shutter operations across much of Europe.

Western governments also froze around $300 billion of the Russian central bank’s reserves.

But not all ties have been cut. Some European banks, including UniCredit and Raiffeisen Bank International, have large businesses there and must follow local rules to grant payment holidays to soldiers.

The United States and European Union have sought to present a united front on sanctions, although their penalties differ, in part because Europe has closer economic ties to Russia.

Euro Zone: British consumer price inflation fell by more than expected to 10.1% in January from December’s 10.5% and there were also drops in underlying measures of inflation that are being closely watched by the Bank of England, official data showed.

Economists polled by Reuters had forecast that the annual CPI rate would drop to 10.3% in January, moving further away from October’s 41-year high of 11.1% but still eroding the living standards of households.

Core CPI – which excludes energy, food, alcohol and tobacco – fell to 5.8% in January from December’s 6.3%, the Office for National Statistics said on Wednesday.

Sterling fell against the U.S. dollar and the euro after the data was published.

Earlier this month the Bank of England said it saw signs that the surge in consumer prices had turned a corner and it suggested it was close to ending its run of interest rate hikes.

Investors expect another increase in borrowing costs next month by the BoE but Wednesday’s data may add to the sense that a peak in Bank Rate is not far off.

Prices of services, which are also in the BoE’s spotlight, slowed their rise in January, rising by an annual 6.0% compared with 6.8% in December.

“While any fall in inflation is welcome, the fight is far from over,” finance minister Jeremy Hunt said.

“High inflation strangles growth and causes pain for families and businesses – that’s why we must stick to the plan halve inflation this year, reduce debt and grow the economy.”