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The Ukrainian military says it attacked an oil refinery in Russia’s Saratov region last night.On March 21, He Lifeng, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, met with executives from renowned multinational corporations including HSBC, UBS, Louis Dreyfus, Siemens Healthineers, Schneider Electric, Rio Tinto, Prudential, Investor Services, Standard Chartered, Syzygium, and T.C. Pharmaceutical Industries at the Diaoyutai State Guesthouse. He Lifeng stated that Chinas economy is currently progressing steadily and towards new and better development. During the 15th Five-Year Plan period, China will unswervingly expand high-level opening-up and promote high-quality development, which will create broader market opportunities for multinational corporations. He welcomed multinational corporations to increase their investment in China and continuously deepen mutually beneficial cooperation.On March 21, a spokesperson for the Hatem Anbia Central Headquarters of the Iranian Armed Forces stated that the United States and Israel are now targeting private vessels and passenger transport in the Persian Gulf. The Iranian Armed Forces warned the US and Israel that if such actions occur again, Iran will take strong and reciprocal retaliatory action.On March 21, local time, the Iranian Islamic Revolutionary Guard Corps issued a statement saying that at 3:45 a.m. that day, Irans new air defense system struck down Israels third F-16 fighter jet in central Iran. It is claimed that in the first three weeks of the conflict, Iran successfully intercepted and destroyed more than 200 aircraft, including drones, cruise missiles, refueling aircraft, and top-tier fighter jets.On March 21st, HSBC stated that the Federal Reserve maintained its policy rate at 3.50%-3.75% at its March meeting, hinting at a "wait-and-see" approach. Persistent inflation and rising geopolitical risks have created uncertainty for the Fed. We maintain our previous view that the Fed will keep rates unchanged in 2026 and 2027. Inflation risks have increased, particularly due to soaring energy prices, while labor market risks have slightly decreased. Energy price volatility and geopolitical risks should continue to support safe-haven demand and a stronger dollar.

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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