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Swedish travel data shows that Teslas new car registrations in Sweden increased by 70.6% year-on-year in December.January 2nd - According to the Ministry of Transport, on January 1st, 2026, the total number of cross-regional passenger flows in the whole society reached 208.13 million, an increase of 0.2% month-on-month and 21% year-on-year.The governor of Yemens Hadramawt province, which is backed by Saudi Arabia, said he would launch peace operations to retake military positions in the region, but these operations would not constitute a declaration of war.On January 2nd, Nationwide Chief Economist Robert Gardner commented on the December Nationwide House Price Report for the UK: UK house prices softened towards the end of 2025, with annual growth slowing to 0.6% from 1.8% in November, the lowest level since April 2024. The slowdown in year-on-year growth can be partly explained by the high base of comparison (house prices rose by as much as 4.7% year-on-year in December 2024). However, after adjusting for seasonal factors, house prices still saw a 0.4% month-on-month decline in December. Despite the weak year-end performance, the best word to describe the overall housing market in 2025 remains "resilient." Even with relatively weak consumer confidence, cautious household spending, and mortgage rates still at about three times their post-pandemic lows, mortgage approvals remain close to pre-COVID-19 levels. Overall, the fundamentals have not changed significantly, and housing demand remains robust.On January 2nd, BOC International released a research report stating that the State Council, in conjunction with several ministries, previously issued the "Notice on Subsidies for Large-Scale Equipment Replacement and Trade-in of Consumer Goods in 2026," continuing incentive measures for automobiles, home appliances, and digital products, and improving policy effectiveness through targeted optimization. The report believes that although the scale of the subsidy budget decreased as expected, the new policy clearly leans towards the mid-to-high-end market, with the reduction in subsidies for corresponding models far less than market concerns. Subsidies for digital products remain at 15% of the selling price, with a cap of 500 yuan, better than market expectations; subsidies for home appliances have been tightened, narrowing the target audience to six core categories, and only subsidizing those meeting the first-level energy efficiency standard, with the subsidy ratio decreasing from 20% to 15% of the selling price. The report indicates that with the early implementation of subsidy details and timely disbursement of subsidy funds, the automotive industry is expected to achieve a strong start in 2026. However, given the wait-and-see attitude of consumers in the fourth quarter leading to high channel inventory at the end of the year, the first quarter of 2026 may enter a destocking phase. At the individual stock level, the bank believes that Li Auto, Xiaomi, NIO, Wenjie, and Jike brands will be minimally affected by the adjustment of trade-in subsidies.

USD/JPY continues Powell-led declines to fresh 14-week low, BOJ's Kuroda, and US PCE Inflation in the horizon

Daniel Rogers

Dec 01, 2022 15:22

截屏2022-12-01 上午10.12.17.png 

 

As Tokyo opens on Thursday, USD/JPY bears take advantage of the weakening US Dollar to mark the lowest level in more than three months near 137.30. In addition to falling US Treasury bond yields and a risk-on market mentality, the recent depreciation of the Yen could be attributed to a weaker yen.

 

Fed Chair Jerome Powell made his first public appearance since the November Federal Open Market Committee (FOMC) meeting by speaking at the Brookings Institution about the economic outlook, inflation, and employment. The official noted that it makes sense to reduce the rate of interest rate increases and speculated that this might occur as soon as the December meeting. Lisa D. Cook, a member of the Federal Reserve Board of Governors, praised the inflation figures as evidence that the Fed will likely take fewer steps in the future.

 

Following Powell's speech, market bets supporting a 50 basis point (bps) rate hike by the Federal Reserve in December increased from 69.9% prior to the speech to over 75%, resulting in a depreciation of the US Dollar and a rise in Treasury yields, while equities appreciated.

 

As a result, the US Dollar Index (DXY) shattered a three-day uptrend on Wednesday, exhibiting the steepest daily fall in a week and the largest monthly decline in 12 years. Notable is the fact that Wall Street benchmarks responded favourably to Fed Chair Yellen's dovish remarks, while 10-year Treasury bond yields reversed early gains to end November on a negative note near 3.61 percent.

 

In addition to Fedspeak, the poor US statistics and optimism on China's Covid situation also weighed on USD/JPY prices. Among these, the US ADP Employment Change received the most attention, as its November result of 127K constituted the lowest readings since January 2021, compared to the 200K expected and 239K previous results. In addition, China reported just over 38,000 daily cases of Coronavirus on Tuesday, which was reported on Wednesday, indicating the second consecutive day of declining virus levels after the record high was updated. The gradual easing of virus-driven activity restrictions in major cities such as Zhengzhou, Guangzhou, and Chongqing looked to have favored Yen pair sellers.

 

Moving forward, the Fed's favored inflation measure, namely the US Core Personal Consumption Expenditure (PCE) Price Index for October, which is forecasted to increase to 5.0% YoY in October from 5.1% in September, will be key for near-term USD/JPY fluctuations. The US ISM Manufacturing PMI for November will also be significant, with a predicted reading of 49.8 compared to 50.2 earlier. Recent rumors regarding the possible tightening of monetary policy by the Bank of Japan (BOJ) in 2023 are the focal point of Governor Haruhiko Kuroda's address today.


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