Japan Wholesale Prices, Bitcoin, China Covid, US Inflation

China’s home prices fell 1.5% nationwide in December on a year-on-year basis, calculations from data from Refinitiv show. Bureau of National Statistics showed.

House prices fell 0.25% in December on a monthly basis, the same rate of decline seen in November. Current home prices fell 0.48% from a year ago, slightly faster than November’s 0.44% decline.

Separately, People’s Bank of China On Friday it hinted at upcoming changes to its “three red lines” for developers. Introduced in 2020, the measures are aimed at reducing developers’ debt levels and reducing financial risks in real estate – amid a broader push to curb speculation in house prices.

– Evelyn Cheng, Jihye Lee

Japan’s producer prices, or wholesale prices, rose 10.2% in December. Official data.

That was more than the 9.5% rise expected by economists polled by Reuters and marked the third consecutive rise in monthly readings.

The country’s producer prices rose 0.5% on a monthly basis, beating expectations for a 0.3% increase.

– Jihye Lee

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– Weissen Don

A slew of economic data is expected in the week of January 16 – including China’s industrial production and GDP and the Bank of Japan’s rate decision.

On Monday, South Korea will release revised trade data and Indonesia will release its trade balance for December. India is due to release its wholesale price index, which economists polled by Reuters expect to fall to 5.6% in December.

China will release retail sales, industrial production, urban fixed asset investment and gross domestic product for the December quarter on Tuesday. Singapore will release non-oil exports for December on the same day.

On Wednesday, the Bank of Japan will conclude its monetary policy meeting and maintain its ultra-low interest rates. Investors will be looking for clues about who could be Governor Haruhiko Kuroda’s successor and expect a possible policy shift in the near future.

Japan is scheduled to release machinery orders for November on the same day, while Malaysia releases December trade data.

On Thursday, Malaysia’s central bank announces its monetary policy rate while Australia releases its employment figures.

China is set to release its one-year and five-year lending prime rates on Friday. Japan’s consumer price index for December is also expected.

– Jihye Lee

As inflation expectations from consumers fall, the Federal Reserve is expected to scale back interest rate hikes in a few weeks and end them altogether sooner rather than later.

The University of Michigan Consumer Sentiment Survey on Friday showed the one-year inflation outlook at 4%, the third straight monthly decline and the lowest level since April 2021.

Meanwhile, traders gave a 94.2% chance of a 0.25 percentage point interest rate hike when the central bank’s next two-day meeting ends on February 1. That marks another small move from the 0.5 percentage point rise in December, a drop from four straight 0.75 percentage point increases.

“Inflation expectations are well-packaged and improving as pricing pressures weaken in many sectors. The central bank will hike by 0.25% at its upcoming meeting later this month,” said LPL Fund Chief Economist Jeffrey Roche. “We shouldn’t be surprised if the central bank starts talking about a pause in the future.”

– Jeff Cox

The University of Michigan’s consumer sentiment index rose for the second month in a row, though it remains at historically low levels. The index rose to 64.6 from 59.7 in December. However, this is 4% lower than the previous year.

“Uncertainty remains high in both measures of inflation expectations, and changes in global factors in the coming months could reverse recent developments,” said Jon Hsu, director of consumer surveys.

– Fred Imbert

A negative inflation gauge on Thursday, along with warnings of a slight slowdown from major banks on Friday, could be signs that the central bank will soon pause or cut rates this year, but that would require another change in the central bank’s direction.

“You don’t have to agree to believe the Fed’s policy,” said Lauren Goodwin, an economist and portfolio strategist at New York Life Investments.

Goodwin pointed out that a majority of Fed voting members at the last meeting predicted a Fed funds rate of 5% or higher this year. Given the concern expressed by some central bankers about the consequences of a pause too soon, they may be determined to hit that mark.

“With a relatively high level of consolidation and confidence, they’ve said they’re going to bring the policy rate up 25 basis points higher than the market is saying. And frankly unless we see a rapid decline in inflation or economic growth. … I don’t think they’re going to change their mind,” Goodwin said. He also said.

– Jesse Pound