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March 27 – According to the Wall Street Journal, citing sources familiar with the matter, Iran will not agree to meet to negotiate a possible ceasefire agreement until the United States agrees to reduce the demands of its 15-point plan. The sources indicated that Iran is open to talks but considers the US proposals excessive, including dismantling most of its nuclear program, ending support for regional allies, and limiting its missile program. Iranian and Arab officials stated that Tehran has ruled out discussing Irans missile program as a starting point for the talks. They indicated that Iran is also unwilling to commit to a permanent halt to uranium enrichment activities. The sources said that Iran also hopes to obtain assurances (preferably through a third party) that the United States and Israel will not retaliate with further attacks. One Iranian official stated that Iran remains willing to consider previously proposed restrictions on its nuclear program, including diluting its stockpile of highly enriched uranium. The United States suspects that Iran may eventually use its stockpile of highly enriched uranium, far exceeding any civilian needs, to develop nuclear weapons.The Federal Reserve accepted a total of $885 million from 16 counterparties in its fixed-rate reverse repurchase operations.European Central Bank President Christine Lagarde: Energy disruptions could last for years, and the economic consequences will only gradually emerge.Market sources say Spain and Algeria are in talks to increase pipeline natural gas supplies by up to 10%.Spanish Prime Minister Pedro Sánchez has appointed Carlos Curpo as Deputy Prime Minister.

As the BoJ ponders a YCC expansion, EUR/JPY continues to decline, falling below 142.60

Alina Haynes

Apr 06, 2023 11:52

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After plunging below 142.60 during the Asian trading session, the EUR/JPY pair's three-day losing trend was extended. Renewed rumors of an expansion of the Bank of Japan's (BoJ) Yield Curve Control (YCC) are exerting immense pressure on the cross.

 

The Japanese economy is experiencing gradual wage growth, and inflation is expected to respond to recent increases in crude oil prices. Analysts at Wells Fargo believe the BoJ will take advantage of a tactical opportunity to further modify its policy settings in the fourth quarter of 2022, and are inclined toward a meeting in October. They added that this timeframe is optimal for a smooth policy adjustment, as monetary easing from the Federal Reserve (Fed) and other major central banks should alleviate yield pressure.

 

In particular, the Bank of Japan (BoJ) will raise the target yield for 10-year Japanese government bonds (JGBs) from 0% to 0.25% and increase the tolerance interval surrounding this target to +/- 75 basis points.

 

Accelerating PMIs in the Eurozone provide support for the European Central Bank's sustained rate hikes. (ECB). S&P Global reported a Composite PMI of 53.7 on Wednesday, which was higher than the previous release of 52.0 but below expectations of 54.1, the highest level in the past ten months.

 

According to Reuters, S&P Global issued the following statement: "Manufacturing production increased slightly, but the service sector had the greatest impact on March's accelerated growth."

 

Wednesday, ECB policymaker Boris Vuji stated regarding interest rate forecasts, "The majority of the rate-hiking cycle has passed." He added, "We may require additional rate increases to address core inflation."

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