Morning wrap (20.12.2022)

• US indices finished yesterday's trading lower. S&P 500 dropped 0.90%, Dow Jones moved 0.49% lower and Nasdaq declined 1.49%. Russell 2000 dropped 1.41%

• Today's Bank of Japan meeting triggered huge moves on the market. While the Bank left interest rates unchanged, it decided to widen band around 10-year target yield from 25 to 50 bp

• In current market and economic circumstances, BoJ move on yield curve is more or less equal to 25 bp rate hike. However, BoJ Governor Kuroda stressed not to see it as that

• USDJPY slumped 3% on the news but has recovered some of the losses since

• Equity markets also took a hit with Nikkei dropping 2.5%, S&P/ASX 200 moving 1.5% lower and Kospi taking 0.8% dive. Indices from China traded 1.0-2.2% lower

• DAX futures point to a lower opening of the European cash session

• People's Bank of China left 1- and 5-year loan prime rates unchanged at 3.65% and 4.30%, respectively

• According to RBA minutes, Australian central bankers considered 25 bp rate hike, 50 bp rate hike or a stop in hikes at December meeting (RBA decided on a +25 bp)

• Cryptocurrencies are trading higher, defying an overall risk aversion. Bitcoin adds 2.6%, Ethereum gains 4.3% and Dogecoin jumps 5.4%

• Oil is trading little changed while US natural gas price jump 1%

• Precious metals trade higher - gold gains 0.3% while silver and platinum trade 0.5% higher

• JPY, CHF and USD are the best performing G10 currency while AUD and NZD underperform the most

Nikkei (JAP225) plunged today after BoJ decision. Index broke below 200-session moving average (purple line) and freefalled until the lower limit of a trading range offered some support. Source: xStation5