- After yesterday's end-of-session sell-off on Wall Street, Asian indexes closed trading under pressure. The Hang Seng lost 0.4% against a 0.6% decline on Australia's ASX. Japan's Nikkei fell more than 2%, and Korea's KOSPI slid more than 1%.
- Oil, around which yesterday's end of the session was oriented, is trading down a very limited 0.15% today. Brent is still trading near $91 / barrel, the first time since October 2023
- Attention to oil will turn today, not only because of the complicating inflation picture. Israel has put armed forces on high alert, expect Iranian revenge for Damascus embassy attack
- The Fed's Kashkari indicated that he expects two rate cuts this year, but stressed that if inflation is stuck at current levels, the Federal Reserve may hold off on easing policy this year. To the markets' surprise, these concerns were also shared by Austan Goolsbee of the Chicago Fed
- The Fed's Thomas Barkin also expressed his belief that the bank needs to be more certain about disinflationary policy transmission in the face of recent inflation readings and business practices that, despite lower pricing power, still find inflation-raising methods
- The VIX volatility index is trading down slightly at 0.7% after rising nearly 7% yesterday
- S&P PMI data from Hong Kong pointed to a 50.9 reading vs. 49.7 previously, and retail sales in Singapore rose 8.4% vs. 1.9% conservative forecasts and 1.3% previously
- Japanese household spending fell -0.5% y/y vs. -6.4% previously and -2.3% forecast. BoJ Governor Ueda indicated that going forward, the bank would like to reduce the pace of JGB purchases and sell off its balance sheet.
- At the same time, Ueda stressed that the bank is not close to selling off the portfolio of ETFs it holds and will not do so in the near future. At the same time, the BoJ chief would like the pricing of long-term rates to depend on market tides
- Japan's Finance Minister Suzuki stressed that exaggerated moves on the yen are undesirable and did not rule out the use of any tools to combat JPY speculative volatility. A similar belief was expressed by Ueda
- The dollar continues to perform well. USDIDX contracts are trading almost 0.9% up, while EURUSD is losing 0.1%. Gold contracts lose almost 0.6%, pressured by the 'greenback'
- Cryptocurrencies are doing mostly poorly, although Bitcoin alone is trading with little volatility and losing 0.7%; it is currently trading at $67,500. Microstrategy's shares erased a few percent rally yesterday, as Wall Street sentiment deteriorated sharply
- John Kirby indicated that it is likely that the Israeli cabinet has agreed to provide humanitarian aid to Gaza through the Erez crossing. The U.S. military is investigating the possible use of AI in an attack on the World Central Kitchen civilian convoy
