BOJ Drama Unfolds: Markets in 'Will They or Won't They' Frenzy

Witness the unfolding drama in global markets as they engage in the intriguing 'will they or won't they' game regarding the Bank of Japan (BOJ) policy. Wayne Cole provides an insightful overview of the day ahead, shedding light on the subdued start in Asia and the cautious anticipation surrounding the BOJ's policy meeting.

Market Sentiment in Asia

• Cautious Markets: Anticipation of BOJ's Policy Meeting
• Impact of North Korea's Long-Range Missile Launch
• South Korean Shares Resilient Amid Global Uncertainty

Analyst Predictions on BOJ's Moves

• Reuters Poll: Analysts Skeptical of Immediate BOJ Policy Changes
• January Speculation: One-Fifth Analysts Consider BOJ Action
• Majority Consensus: Negative Rates Ending in April

Conflicting Reports on BOJ's Policy Consideration

• Ambiguity Surrounding BOJ's Deliberation on Policy Changes
• Potential Discussions: When and Under What Circumstances to Tighten
• Historical Context: BOJ's Track Record of Surprising Policy Moves

Market Assumptions and Dollar/Yen Volatility

• Anticipation of Abandoning Negative Rates
• Dollar/Yen Implied Volatility Surge: Reflecting Policy Uncertainty
• Global Expectations: BOJ's Potential Shift Impacting Currency Markets

Stakes for the Federal Reserve and Inflation Outlook

• High Stakes for the Fed: Inflation Measure Due on Friday
• Analyst Expectations: Risks Tilted Towards a Soft Inflation Number
• Core PCE Data Analysis: Implications for the Fed's Target

Global Inflationary Pulse: Consumer Price Readings

• International Insights: Consumer Price Readings from Japan, Canada, and the UK
• Global Inflation Landscape: Assessing the Pulse of Economies
• Impact on Market Sentiment: Linking Inflation Data to Investment Decisions

ECB's Potential Response to Rising Real Rates

• Investor Anticipation: ECB Expected to Offset Rising Real Rates
• ECB Rate Cut Expectations: Almost 34 Basis Points Priced In for April
• Isabel Schnabel's Influence: Testing Aggressive Pricing with Her Remarks

Key Developments Influencing Markets on Monday

• ECB Members' Appearances: Lane and Schnabel
• Insights from Bank of England Deputy Governor Broadbent
• Norway Central Bank Governor Bache's Perspectives
• German Ifo Survey for December: Impact on European Markets
• Fed's Goolsbee on CNBC: Potential Insights and Market Reaction

Conclusion

As the drama unfolds in the global markets, the 'will they or won't they' frenzy around BOJ's policy decisions continues to captivate investors. The stakes are high, and the repercussions are felt on a global scale, making it a critical juncture for market participants.

Frequently Asked Questions

• Q: What is the primary focus of the blog post?
• A: The blog post explores the unfolding drama in global markets surrounding the Bank of Japan's policy decisions, emphasizing the 'will they or won't they' sentiment.
• Q: How does the article address market sentiments in Asia?
• A: The article delves into the cautious start in Asia, the impact of geopolitical events like North Korea's missile launch, and the resilience of South Korean shares amid global uncertainty.
• Q: What key developments are highlighted for Monday?
• A: The article outlines key appearances by ECB members, insights from Bank of England Deputy Governor Broadbent, perspectives from Norway Central Bank Governor Bache, the German Ifo Survey for December, and potential market reactions to Fed's Goolsbee on CNBC.