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The Bank of Japan offers to buy unlimited amounts of bonds, Janet Yellen is due in Washington, and world's biggest miner expects the commodity rally to cool. Here are some of the things people in markets are talking about today.
Bank of Japan offer
Japan's central bank launched its first ever fixed-rate operations overnight, in which it offered to buy unlimited two- and five-year notes at yields of minus 0.09 percent and minus 0.04 percent respectively. While the operations drew no bids, they are viewed as "a warning to markets about a significant surge in rates,” according to Keiko Onogi, a fixed-income strategist at Daiwa Securities Co. in Tokyo. The yen was trading at 109.11 to the dollar at 5:04 a.m. ET after coming close to 110 in trading yesterday. Later today, Japanese Prime Minister Shinzo Abe meets President-elect Donald Trump in New York.
Two things are likely to dominate Federal Reserve Chair Janet Yellen's congressional testimony today — the outlook for rates, and President-elect Donald Trump. With investor confidence of a rate hike in December close to 100 percent, any hints on the longer-run path of tightening will be closely watched. The effect of fiscal policy plans from the new president, and how they feed into the Fed's outlook is also very likely to come up. Yellen's testimony will be released at 8 a.m. ET, with the hearing before the bicameral Joint Economic Committee beginning at 10 a.m. ET.
Commodity boom to cool
According to world's largest miner, that is. BHP Billiton Ltd. Chief Executive Officer Andrew Mackenzie told reporters on Thursday that the rally which has seen a 66 percent jump in iron ore and a 295 percent jump in coking coal prices this year will moderate as China pushes ahead with efforts to restructure its steel industry. Crude prices are holding their recent gains this morning, with a barrel of West Texas Intermediate for December trading at $45.70 at 5:17 a.m. ET as some OPEC members meet in Qatar.
Overnight, MSCI Asia Pacific Index added 0.1 percent, while in Japan, the Topix index closed with a 0.1 percent gain as the Bank of Japan bond-buying decision lifted sentiment. In Europe, the Stoxx 600 Index was broadly unchanged at 5:18 a.m. ET in a week that has seen moves of less that 0.3 percent each day so far. S&P 500 futures were 0.1 percent higher.
U.K. retail sales surprise
The volume of goods sold in stores and online jumped 1.9 percent in October from the previous month, far ahead of economist expectations for a 0.5 percent increase. The gains were led by clothing and footwear sales which had their biggest jump in more than 2 1/2 years. Data due in the U.S. today includes CPI for October and weekly initial jobless claims, both due at 8:30 a.m. ET.
What we've been reading
This is what's caught our eye over the last 24 hours.
- What a Trump-branded Federal Reserve might look like.
- Investors just flooded into financials at the fastest weekly pace ever.
- A $2.6 trillion myth: For the dollar, Trump tax holiday is a dud.
- Analysts warn that Tiffany's could get hurt by being next door to Trump.
- Gold option traders bet post-election slump isn’t over.
- Duterte's economy is the world's fastest-growing.
- There are two productivity puzzles.