Bank Of Japan Joins The Pack

Good Morning Everyone!

Dogecoin DOGE/USD  is now worth more than Coinbase COIN(largest U.S crypto exchange) and Silvergate SI (largest U.S crypto bank) combined. 

Probably nothing.

Prices as of 4 pm EST, 12/19/22; % YTD

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MARKET UPDATE

Yesterday tax loss selling continued into year-end

Month to date

• S&P 500 down 6.4%

• Nasdaq down 8.0%

• TSX down 6.1%

Japan

• Japan has kept interest rates below zero this year

• Where they have been since 2016

• Even as other major Central Banks have raised rates

If Japan does not move off their negative rate policy

• Inflation is rising

• Yen is falling

So, over-night, the Bank of Japan is shifting its Yield Curve Control (YCC) stance

• Will raise its upper yield limit on 10 year JGBs from 0.25% to 0.5%

• This will open the door for a rate hike in 2023

• Yen is +3%  

• Nikkei is down 2.5%

• Japan 10 year yield went up by 15bps to now yield 41 bps

Japan’s impact on U.S. Treasuries

• 10 year up 6 bps

• 2 year up 1 bps

• Steepening the 2-10 yield curve by 5bps

• This is the 3rd day in a row that the US 2-10 yield curve has steepened

Crude 76

• Volume is light because it’s the last trade date for the January futures contract

• Investors will look at the February contract

• Near term demand picture is not clear

• Global supply remains limited by OPEC+ discipline

Amazon AMZN

• AWS awarded 5 year, $723 million U.S. Navy contract

Apple AAPL

• Set to begin producing MacBooks in Vietnam by mid-2023

• Pulled out of negotiations for the NFL Sunday ticket package

• Amazon and Google GOOGL still bidding

Earnings

• General Mills kGIS

CRYPTO UPDATE

BlockFi looks to restart some withdrawals

• Seeking court order green-lighting customer withdrawals

• Also aims to clear up incorrectly reflected transactions

• Court hearing Jan 9, 2023

Weekly digital asset fund flows

• Outflows from investment products picked up last week, totaling $30 million

• Bitcoin BTC/USD outflows of $17.5 million

• Ethereum ETH/USD outflows of $9.1 million (5th consecutive week outflows)

• Much higher trading volumes vs prev week