Market Update – December 20 – Pre-Christmas Surprise from BOJ

The USD Index is betwixt and between amid various drivers. It closed at 104.706, inside the day’s 104.931 to 103.50 range. The advent of the holidays and year end have lightened volume measurably too, exacerbating some of the moves in the markets. Stocks are in red against Decembers’ seasonality. Treasuries fell today, especially at longer tenors, after the Bank of Japan unexpectedly lifted a cap on 10-year yields and unleashed a sell-off across global bond markets.
Yields: 10yr rose to 3.71% and 30-yr to 3.72%.
The S&P 500 has risen in 73% of December since 1928, according to Dow Jones Market Data. As of Monday’s close, the S&P 500 had fallen 6.4% in December.
EUR – tumbling between 1.0575-1.0650.
JPY – surged to 132.66 after the BOJ said it would review its yield curve control policy and widened the trading band for the 10-year government bond yield in an unexpected tweak. (Policy is unchanged)
AUD & NZD drifted also after BOJ announcement.
Stocks – The NASDAQ tumbled -1.49%, with the S&P 500 falling -0.90%, while the Dow slid -0.49%.
USOil – drifts to $75.20 from $76.55.
Gold – higher but still struggling to break the $1,800.
BTC – retested again the $16,200 floor. – Sam Bankman-Fried to agree to US extradition after Bahamas court hearing.

Today – US Housing Starts & Building Permits, Canadian Retail Sales, EU Consumer Confidence and NZ Trade data.

Biggest FX Mover @ (07:30 GMT) AUDJPY (-3.32%). Broke 8-month support extending to 88.30, below 50-week EMA. Intraday MAs keep pointing lower, MACD histogram & signal line negative and falling. RSI 22 & flat, H1 ATR 0.4920, Daily ATR 1.1611.

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Andria Pichidi

Market Analyst

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