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Friday, January 29

29th Jan - Bank of Japan goes negative

Previously on MoreLiver’s:

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The pitfalls of Eurozone bilateral trade imbalance measuresvox
Because of the emergence of global value chains, trade imbalances within the Eurozone are to a large extent an endogenous result of the international organisation of production at the firm level. It is therefore better to disregard intra-EZ imbalances and focus on the total.
The Shortcomings of Quantitative Easing in EuropeProject Syndicate
Germany toughens refugee policy – Politico
40% of Germans say Merkel should resign over refugee policy – Reuters
Merkel Defuses Threat to Chancellorship With Refugees Deal – BB
Euro area: Rebound in inflation only temporary – Nordea
Monetary developments December 2015 – ECB
Is growth in euro zone bank lending to companies fizzling out? – Reuters

Downward Nominal Wage Rigidity During and After the Great RecessionFED
We find no evidence that the high degree of labor market distress during the Great Recession reduced the amount of downward nominal wage rigidity and some evidence that operative rigidity may have increased during that period.

Fourth-Quarter U.S. Growth – The Numbers – WSJ
Economists: ‘Consumer Spending and Housing Remain Solid’ – WSJ
Slower growth in Q4 one reason for Fed to hold in March – Danske Bank
Soft growth in Q4, but a serious downturn remains unlikely – Pictet
Growth slows to 0.7% in Q4 – WaPo

JPY sold off aggressively after BoJ announced negative interest rates – ABN AMRO
That was then, this is now: BoJ and negative rates edition – FT
BoJ Adopts Negative Interest Rates, Fails To Increase QE – ZH
BoJ's NIRP Results In More Currency Wars, Global Slowdown – ZH
BoJ goes negative in surprise move – Danske Bank
BoJ introduces negative interest rates – Nordea
Kuroda surprises by introducing a negative interest rate – Pictet

Morning MoneyBeat AsiaWSJ
Oil Surges, and Stocks Go Along for the Ride

Morning MoneyBeat US – WSJ

Danske DailyDanske Bank

Euro rates updateNordea

Bank of Japan to the rescue; US recession worries from weak Q4; postponed Russian rate cut * New Bank of England forecast * U-turn in long yields on Brent oil jump * USD loses broadly as correlation with oil holds

Morning MarketsTF
The Bank of Japan made a surprise move by adopting negative interest rates in a bid to tackle low inflation and a spluttering economy. The move puzzled some analysts and traders but the overall reaction to the move was positive.

Daily FX Comment Marc Chandler
Kuroda Surprises, Introduces Negative Rates in Japan, Sinks Yen

Daily ShotTF
Bank of Japan took markets by surprise with moving its main interest rate into negative territory. Other Central Banks have now to see how to re-act.

Matt Levine’s Money StuffView / BB
Bonuses, bankruptcies, donors, Martin Shkreli, basic income, unicorns and repo.
Global Stocks, Bonds Jump On BOJ NIRP Stunner; Rally Fizzles After Crude Fades Gains


FX UpdateTF
The Bank of Japan pulled the rug out from under the market by cutting into negative rate territory which was entirely unanticipated. The JPY weakened in response and risk appetite soared but will we see follow-through next week on this move?

From the FloorTF
The Bank of Japan has a penchant for surprises but governor Haruhiko Kuroda's reversal of his previous disavowal of negative interest rates has left markets reeling.

Japanin keskuspankki liittyi negatiivisten kerhoon * USA:n Q4 BKT-luvut julkaistaan tänään * Valtiolainakorkojen laskuliike jatkui Fedin kokouksen vanavedessä * Venäjän keskuspankki pitää rahapolitiikan ennallaan