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Bank of Japan Governor Kazuo Ueda: We will carefully study all the data before deciding on monetary policy.Bank of Japan Governor Kazuo Ueda: He held talks with Japanese Prime Minister Sanae Takaichi on the economy, inflation, and monetary policy.On November 18th, Blerina Uruci, Chief Economist for the United States at T. Rowe Price, stated that due to significant internal disagreements within the Federal Reserve regarding interest rate cuts, coupled with inflation concerns, the probability of a rate cut in December is roughly 50/50. Uruci pointed out that AI-related capital spending has significantly boosted US economic growth in 2025, and a Fed rate cut would further promote healthy economic development in 2026. However, inflation remains a major risk. With US government debt exceeding 120% of GDP, coupled with inflationary policies such as tariffs, the Fed will find it difficult to return to its 2% inflation target. Therefore, Uruci believes that the Fed may not be able to cut rates at all next year, and unless economic growth unexpectedly slows, a rate cut is not expected in the first half of 2026.Goldman Sachs: As global LNG supply continues to grow faster than Asian demand, storage facilities in Northwest Europe are expected to face congestion by 2028/2029. This will put significant downward pressure on TTF and JKM gas prices, thereby reducing global LNG supply.Goldman Sachs projects that by 2028/2029, TTF natural gas prices will reach €12/12 per megawatt-hour, JKM natural gas prices will reach $4.40/4.45 per million British thermal units (MMBtu), and Henry Hub natural gas prices will reach $2.70/2.75 per MMBtu.

Asian Shares Fall As Investors Analyze ECB Decisions

Charlie Brooks

Jun 10, 2022 11:14

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Asia-Pacific equities were predominantly lower on Friday morning. Ahead of U.S. inflation statistics, investors are analyzing the European Central Bank's signals for potential interest rate hikes.


At 10:49 PM ET (2:49 AM GMT), the Nikkei 225 was down 1.41 percent, and the KOSPI was down 1.08 percent.


In Australia, the ASX 200 index declined 0.99%.


The Hang Seng Index in Hong Kong fell 0.89 percent.


As a result of the Chinese government's response to a Bloomberg article, the sub-index for Hong Kong-listed IT giants opened 2.9 percent lower. Alibaba (NYSE:BABA) Group Holding Ltd.'s U.S.-listed shares plummeted after the China Securities Regulatory Commission dismissed a Bloomberg report that it was exploring a listing resurrection for the fintech company.


The Shanghai Composite rose 0.10 percent, but the Shenzhen Component rose 0.02 percent.


China's manufacturing factory-gate inflation slowed to its worst pace in 14 months in May, according to previously released data. In May, the producer pricing index (PPI) increased by 6.4% annually, compared to an increase of 8% in April. The reading was the lowest since March 2021. The cooling could be attributable to decreased demand for steel, aluminum, and other industrial commodities as a result of COVID-19-related production disruptions.


Meanwhile, the consumer price index (CPI) increased 2.1% annually.


The European Central Bank (ECB) announced on Thursday that it will prepare a quarter-point increase in interest rates in July and a larger increase in the fall if inflation remains high. Inflation in the eurozone has already surpassed 8 percent.


Short-term U.S. Treasury rates are near all-time highs for 2022 due to a selloff in the euro-area bond market in response to ECB rate rise indications.


The ECB also announced that net asset purchases will halt on July 1, 2022.


Now, investors have moved their attention to U.S. inflation data, due later in the day, for additional hints on the course of interest rate hikes by the U.S. Federal Reserve.


Bloomberg quoted Charles Schwab (NYSE:SCHW) & Co.'s chief financial strategist Liz Ann Sonders as saying, "We've reestablished the inverse relationship between bond rates and stock prices."


"There is a little more discussion, or whispering, about the CPI being a touch above forecasts. Add to that the ECB's more hawkish posture, and you get another bad day."


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