4 hours ago
The yen weakens after the Bank of Japan holds interest rates, increasing flexibility in yield curve control
Japan’s yen weakened after the country’s central bank held interest rates steady and said it would allow more flexibility in yield curve control.
The Bank of Japan said the target level of the 10-year Japanese government bond yield would remain at 0%, but the 1% cap would serve as a “reference.”
The news sent the yen down nearly 0.6% against the dollar, briefly breaking the 150 per dollar barrier.
The benchmark Nikkei 225 reversed earlier declines, rising 0.7%, while the Topix gained 1.14%.
The BOJ also raised its inflation forecast for the next fiscal year and now expects the core consumer price index to rise 2.8%, above the 1.9% forecast three months ago.
—Shreyashi Sanyal
4 hours ago
HSBC says slower growth is a new normal for China
“China’s new normal will be lower growth than before,” said Fred Neumann, chief economist for Asia and co-head of global research at HSBC.
“We probably need to adjust our expectations about the cap on China’s growth,” Neumann told CNBC’s “Squawk Box Asia.”
HSBC now expects China’s economy to grow 4.9% this year and 4.6% in 2024. Neumann said that will likely be the growth range for China over the next few years and “as long as the real estate market continues to struggle, that’s probably the best thing it can do.”
Neumann said even though forecasts for China’s growth are more modest than before the pandemic, there are still some signs of economic recovery and growing areas of investment, including the electric vehicle sector.
Beijing’s current growth target is 5% for 2023. Data earlier in the day showed China’s manufacturing activity posted an unexpected decline in October.
—Shreyashi Sanyal
6 hours ago
China’s manufacturing sector recorded a surprise decline in October
China’s manufacturing activity posted an unexpected decline in October, according to official data.
China’s purchasing managers’ index was at 49.5 for the month, compared with a Portal poll estimate of 50.2. A PMI value below 50 means a decline.
The data comes as recent economic data points to small signs of recovery in the world’s largest emerging market.
China’s government and central bank have so far maintained growth-stimulating measures to meet Beijing’s annual growth forecast of about 5%.
—Shreyashi Sanyal
7 hours ago
CNBC Pro: Forget Big Tech. Bernstein likes these global stocks from an “unloved” part of the tech industry — and then some
High interest rates are generally bad for technology stocks and are now a key macroeconomic risk, especially for “expensive” stocks – but two parts of the sector are in a good position, according to Bernstein.
One of them is “the cheapest sector in terms of”. [price-to-sales ratio],” it said.
The company also announced its top picks and updated its screens on global technology stocks.
CNBC Pro subscribers can read more here.
– Weizhen Tan
7 hours ago
CNBC Pro: Is Meta a Buy After Brutal Tech Selloff? That’s what the professionals say
Shares of Meta Platforms were hit by a broad tech sell-off last week – but several analysts remain bullish.
Meta stock fell 3.86% last week but traded over 2% higher on Monday.
“I think this technology is sold out here, [when] If we look back three or six months, I see this as more of a once-in-a-lifetime opportunity, not the right time [for it] “We need to go into hibernation,” Dan Ives of Wedbush Securities told CNBC on Thursday, amid the market downturn.
Other analysts also commented on the stock’s prospects.
CNBC Pro subscribers can read more here.
—Amala Balakrishner
7 hours ago
Japan’s retail sales growth rate is falling after four consecutive months of acceleration
Japan’s retail sales rose 5.8% in September from a year earlier, slower growth compared to August’s 7% growth.
This is the first month the growth rate moderated after four straight months of accelerating growth, falling slightly below the 5.9% expected by economists polled by Portal.
Total commercial sales were 50.35 trillion yen ($337.17 billion) in September, the highest since March.
—Lim Hui Jie
8 hours ago
Japan’s industrial production in October fell well short of expectations
According to preliminary figures from the country’s Ministry of Economy, Trade and Industry, Japanese industrial production rose by just 0.2% in September compared to the previous month.
Although that was a reversal from August’s 0.7% decline, the growth rate was well below the 2.5% month-on-month growth expected by economists polled by Portal.
Industrial production fell 3.7% in September from a year earlier, a weaker decline than the 4.4% decline in August.
—Lim Hui Jie
14 hours ago
Oil prices fall as investors look to war, Fed says
Oil prices fell on Monday as investors closely followed the war between Israel and Hamas and prepared for the Federal Reserve’s policy meeting later this week.
Brent fell 2.9% to $87.88 a barrel. U.S. West Texas Intermediate futures fell 3.5% to $82.59 a barrel.
— Alex Harring, Lee Ying Shan
17 hours ago
Morgan Stanley’s top strategist believes a fourth-quarter rally is unlikely
According to Mike Wilson, chief U.S. equity strategist at Morgan Stanley, the likelihood of a fourth-quarter rally “decreased significantly” last month.
Wilson has forecast that the S&P 500 will end the year at 3,900, making him one of the most bearish strategists on Wall Street, according to CNBC’s Market Strategist Survey. While he noted in a Sunday note to clients that initial bullish sentiment faded in September – before picking up again this month on expectations of better third-quarter earnings and seasonal strength through year-end – his lower estimate for the broad market index remains in place.
To read more about his call, click here.
– Hakyung Kim
18 hours ago
Bank of Japan Considers Yields Rise Above 1%, Report Says
Bank of Japan officials are expected to consider allowing longer-term bond yields to rise above a 1% cap on Tuesday as the central bank seeks to prevent interest rates from rising, according to a report on Monday.
Rising U.S. bond yields have spread globally, putting pressure on their global counterparts, especially since Federal Reserve Chairman Jerome Powell recently emphasized his commitment to fighting inflation. Granting flexibility on previous yield curve caps could give BoJ officials some breathing room, NikkeiAsia reported, citing sources familiar with the talks.
Rising U.S. bond yields have sent money flowing into the dollar, putting downward pressure on the yen and exacerbating inflation. Some flexibility in caps drives away speculators while helping Japan get its own inflation problem under control.
The yen rose against the US dollar following the Nikkei report and was last trading at 149.21.
–Jeff Cox