Record-low rates are maintained by BOJ, while the yield curve control range is expanded

Asian stock market closes in red on Monday. The Shanghai Composite is down 1.07% at 3107.12 Overall, the Singapore MSCI is down 0.88% at 291.30. Over in Hong Kong, the Hang Seng Index is down 1.49% at 19352.81. In Japan, the Nikkei 225 is down 2.46% at 27237.64. While the Topix index is down 1.54% at 1935.41 South Korea’s Kospi is down 0.80% at 2352.17. Australia S&P/ASX 200 is down 1.54% at 7133.90.

Top News of the Day: –

The Bank of Japan held its benchmark rate at record lows on Tuesday but widened the range for yield fluctuations in the benchmark government bonds as the country grapples with surging inflation.

The move saw the Japanese yen rally over 2% to 133.62 against the dollar, given that it lends credence to speculation that the BOJ could eventually tighten policy in the face of high inflation.

The central bank said it will raise the range of 10-year Japanese Government Bond, (JGB) yield fluctuations to between negative 0.5% and 0.5%, from a range of negative 0.25% to 0.25%.

The decision shows that rising inflation in the country is causing the BOJ to potentially revise its stance on price pressures. A report released earlier this week said that the government is considering a revision of the BOJ’s inflation target, as consumer inflation surged to a 40-year high in November.

Still, the potential for a pivot away from the bank’s ultra-accommodative stance appears to be far away. The bank maintained its 2% target for annual inflation on Tuesday, even as the consumer price index trended at an annual rate of 3.7% in October.

The BOJ held its short-term policy interest rate at negative 0.1%, having kept it at ultra-low levels for nearly a decade, and kept its long-term interest rate at 0%.

Market Summary as of 19/12/2022:

European equities Monday closing. The DAX futures contract in Germany traded up 0.36% at 13942.87, CAC 40 futures up 0.32% at 6473.29. UK 100 futures contract in the U.K. up 0.40 at 7361.31

In the U.S. on Wall Street, the Dow Jones Industrial Average Closed down 0.49% at 32757.54. The S&P 500 down 0.90% at 3817.66 and the Nasdaq 100 down 1.49% at 10546.03, NYSE closes 0.53% down at 14938.03.

Top Market News Today:

In the Forex market, GBPUSD up 0.08% at 1.2152. The USDJPY down 3.19% at 132.52, and The USDCHF is down 0.09 at 0.9280. EURUSD up 0.03% at 1.0611. EUR/GBP down 0.02% at 0.8735. The USD/CNY down 0.03% at 6.9752 at the time of writing.

In the Commodity market U.S. Gold futures up at 0.35% $1,793.27. Elsewhere, Silver futures up 0.42% at $23.08 per ounce, and Platinum is up 0.97% at $987.20. per ounce, and Palladium up 0.76% at $1686.80.

Brent Crude Oil is down 0.24% at $79.60 per barrel.

In the Cryptocurrency Markets, Bitcoin at 16810.90 up at 2.26%, Ethereum was up at 3.52% at 1208.69, and Litecoin is at 64.89 up 2.45%, at the time of writing.

Top Market Segment to Watch Out for Today:

DISNEY: – Walt Disney (NYSE: DIS) Shares dipped, currently down more than 3.5% after its Avatar sequel opened with ticket sales shy of lofty predictions.

The film took in $134 million at its domestic box office opening weekend, falling short of the $175 million industry analysts had predicted, while it was also just below the $135 million to $150 million range forecasted by Disney.

Disney shares are currently trading around the $86.90 mark after opening up the session at above $90 per share.

Following the news, Benchmark analysts said the $134 million in domestic opening-weekend ticket sales “fell short of tracking estimates based on advance ticket sales, which had projected the film would earn between $150M and $175M in North America.”

Economic News:

US: -Sam Bankman-Fried has decided to agree to be extradited to the United States to face fraud charges, a person familiar with the matter said on Monday, just hours after the FTX founder’s lawyer told a Bahamas judge he was not ready to consent.

The about-face paves the way for the 30-year-old cryptocurrency mogul to face charges in New York over accusations he stole billions from FTX customers to plug losses at Alameda Research, his hedge fund, before the exchange abruptly collapsed in November.

It was not immediately clear when Bankman-Fried would depart the Bahamas, where he was arrested on Dec. 12 per a U.S. extradition request. No further court date was set at the conclusion of Monday’s hearing.

His U.S.-based defence lawyer, Mark Cohen, did not immediately respond to a request for comment. The U.S. Attorney’s Office in Manhattan did not immediately respond to requests for comment.

Bankman-Fried’s abrupt decision came after a tumultuous appearance on Monday morning before Magistrate Shaka Serville at a court in the capital Nassau, following reports by Reuters and other outlets over the weekend that he had decided to reverse his decision to contest extradition.

At the hearing, his local criminal defence attorney, Jerone Roberts, told Serville initially that he did not know why Bankman-Fried was brought to court on Monday morning.

Following a recess, the lawyer said Bankman-Fried had seen an affidavit laying out the charges against him, but wanted to see the indictment filed against him last week in federal court in New York before consenting to extradition.

Serville said at the hearing that he could not take any action on Bankman-Fried’s extradition without the former billionaire’s consent.

Euro Zone: –

Britain’s government announced late on Monday that it would extend a programme that encourages lenders to offer 95% loan-to-value mortgages to first-time buyers, as the housing market heads into a downturn.

The Mortgage Guarantee Scheme was launched in April 2021 and had been due to stop at the end of this year but instead will continue until the end of 2023. More than 24,000 households have obtained mortgages under the programme.

The extension comes as lenders report falling house prices in the face of rising mortgage interest rates and a squeeze on buyers’ disposable income. In October, inflation hit a 41-year high.

“Extending this scheme means thousands more have the chance to benefit and supports the market as we navigate through these difficult times,” deputy finance minister John Glen said.

Last week mortgage lender Halifax forecasted house prices would drop 8% next year, and in November it recorded the largest monthly drop in house prices since 2008.

Under the mortgage guarantee scheme, the government receives a fee from lenders in exchange for covering almost all the extra risk of a 95% loan-to-value mortgage, compared to one that is made at 80% loan-to-value. The fee is intended to cover expected losses and administration costs.

British house prices surged by more than a quarter after the start of the COVID-19 pandemic, making it hard for most first-time buyers to find a deposit greater than 5%.

The mortgage guarantee scheme can be used to finance house purchases costing up to 600,000 pounds ($731,000).

The Bank of England has warned that people with mortgages are likely to come under greater financial pressure over the coming year but are in a stronger position than before previous recessions in 2008-09 and the early 1990s.

Top Economic Releases Today:

1. USD: Building Permits (Nov) Forecast 1.485M, Previous 1.512M at 19:00
2. EUR: German PPI (MoM) (Nov) Actual –3.9%, Forecast –2.5%, Previous –4.2% at 12:30
3. CAD: Core Retail Sales (MoM) (Oct) Forecast 1.4%, Previous –0.7% at 19:00
4. AUD: RBA Meeting Minutes at 06:00
5. JPY: BoJ Monetary Policy Statement 08:30

TECHNICAL SUMMARY

GBPUSD TECHNICAL ANALYSIS

TRADE SUGGESTION – BUY AT 1.22233, TAKE PROFIT AT 1.23373, SL AT 1.21032

EURUSD TECHNICAL ANALYSIS

TRADE SUGGESTION – BUY AT 1.06234, TAKE PROFIT AT 1.06723, SL AT 1.05774

AUDUSD TECHNICAL ANALYSIS

TRADE SUGGESTION– SELL AT 0.66809, TAKE PROFIT AT 0.66382, SL AT 0.67287

USDJPY TECHNICAL ANALYSIS

TRADE SUGGESTION- SELL AT 133.641, TAKE PROFIT AT 131.717, SL AT 135.106

DOW JONES INDEX TECHNICAL ANALYSIS

TRADE SUGGESTION – SELL AT 32947, TAKE PROFIT AT 32579, SL 33128

WTI CRUDE OIL TECHNICAL ANALYSIS

TRADE SUGGESTION– SELL AT 75.74, TAKE PROFIT AT 74.61, SL 76.63

SILVER TECHNICAL ANALYSIS

TRADE SUGGESTION– BUY AT 23.440, TAKE PROFIT AT 23.928, SL 23.247

LITECOIN TECHNICAL ANALYSIS

TRADE SUGGESTION- SELL AT 63.2191, TAKE PROFIT AT 59.2932, SL AT 65.6836