EUROPE SET TO RISE (0732 GMT) European shares are set to edge higher on Friday, underpinned by a late recovery on Wall Street on Thursday, which ended a topsy-turvy day in the green and saw the S&P 500 snap a four-day losing streak. Euro STOXX 50 futures are up 0.33%, although U.S. equity futures are pointing to slight losses at the opening bell later on. In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan is off 1%, led by declines in China and Hong Kong.
Japan's Nikkei 225 outperforms other regional indices, gaining 1.3% after prospective new BOJ governor Kazuo Ueda said the central bank must maintain ultra-low interest rates, even as inflation hit a more than four-decade high.
In Europe, Credit Suisse will be one to watch at the open after the embattled bank said it will reduce their distribution as a result of market conditions in 2022, while German chemicals giant BASF plans to cut jobs and halt buybacks as it warned of a further decline in earnings.
(Samuel Indyk)
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KURODA 2.0 (0654 GMT)
Kazuo Ueda, who takes over as Bank of Japan governor in April, does not give the impression
of a man in a hurry.
His surprise nomination for the job sent markets into a tizz a couple of weeks back as
investors took the appointment of an outsider as a signal for change. Interest rate markets are
positioned for an end to yield curve control as a first step away from decades of super-easy
policy experiments in Japan.
Yet as he fronted his confirmation hearing before parliament on Friday, he sounded very much
like incumbent Haruhiko Kuroda. It will take "some time" to achieve desired inflation, he said.
"It's important to maintain monetary easing," he said.
Traders responded with relief and the Nikkei share average had its best session in a
month. Ten-year Japanese government bond futures rallied about 20 ticks. Cash bond
yields remained at their 0.5% ceiling. That could perhaps hold things until next week, when Tokyo CPI is due.
Inflation hit a four-decade high last month, Friday figures showed, and the Tokyo reading is a
reliable indicator so will be closely watched.
Meanwhile, investors were bracing for the release on Friday of the U.S. personal consumption
expenditures (PCE) price index for January, the Federal Reserve's preferred inflation measure.
The index is expected to be up 4.3% on a year earlier, compared with 4.4% the previous
month. A surprise could shake things up, though with U.S. rate expectations already ratcheting
higher through February a degree of stickiness is priced in.
Elsewhere the United Nations General Assembly overwhelmingly adopted a resolution marking
the anniversary of war in Ukraine and demanding Moscow pull out and stop the conflict. Fighting
raged on in Ukraine's east and south.
Key developments that could influence markets on Thursday:
- German GDP
- UK consumer confidence
- G20 finance chiefs meeting (Bengaluru, India)
- U.S. PCE inflation (January)
- Fed's Mester, Jefferson, Collins and Waller speak
(Tom Westbrook)
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