Let's check in on the bond markets now. While the US is cutting rates, the Bank of Japan raised interest rates to 30-year highs. And that has yields on the move globally, pushing its 10 and 30-year to multi-deade highs, as you can see there.Rick Santelli is tracking all the action in the bond report. Rick, what can you tell us. >> Absolutely.And we'll get to the foreign global interest rates in a second, but you know, this morning, University of Michigan sentiment, it was definitely weak. current uh situati ...

The crypto market's rich vein of volatility extended into Friday morning, with bitcoin (BTC) rising from a 1:00 a.m. UTC low of $85,200 to $88,000 over five hours after the Bank of Japan increased interest rates to the highest level in 30 years. The move marked the fourth time bitcoin has jumped by more than 2% this week, although each rally has been temporary and quickly faded as price action resembles the choppy behavior of previous crypto bear markets. Nasdaq 100 futures rose by 0.62% during the same ...

Bitcoin faces a key macroeconomic test this week as the Bank of Japan signals a more definitive pivot away from its long-held ultra-loose monetary policy, a shift that could tighten global liquidity and pressure risk assets. The price of Bitcoin is down nearly 30% from its October 6 peak of $126,080, with Bitcoin currently trading at $87,800 according to CoinGecko data, up 1% over the past 24 hours. The Japanese central bank is set to conclude a critical two-day policy meeting on Friday, with markets an ...

Japan’s central bank is once again at the center of global market anxiety. The Bank of Japan (BOJ) is scheduled to announce its next interest rate decision on Dec. 19, and growing speculation of a rate hike has sparked fears that Bitcoin (BTC) and other risk-on assets could face renewed pressure. BOJ Governor Kazuo Ueda signaled that further rate increases were possible this month. Analysts and traders alike see echoes of previous market tremors and worry that history might soon repeat itself. Related: ...

Group 1: Central Bank Actions and Economic Data - The week is significant for central bank actions, with the Bank of Japan expected to raise interest rates by 25 basis points, which could have global ripple effects [7][13][35] - Key economic data releases include US payrolls, retail sales, PMIs, and CPI, which are crucial for the Federal Reserve's next meeting [6][14][16] - The Bank of England and the European Central Bank are also facing similar challenges regarding inflation and job market conditions [9][31][32] Group 2: Market Performance and Sector Analysis - US markets ended lower on Friday, with the tech sector, particularly the NASDAQ, experiencing significant declines, dropping nearly 3% [16][18] - Broadcom's stock fell almost 11% following its earnings report, contributing to the negative sentiment in the AI sector [18] - Asian markets reflected this trend, with notable declines in tech stocks, including SoftBank and TSMC [19] Group 3: Ukraine's NATO Membership and Financial Support - Ukraine has dropped its demand for NATO membership in exchange for bilateral security guarantees, marking a significant shift in its diplomatic stance [41][62] - Ongoing discussions in the European Council focus on financing Ukraine, with pressure building to find solutions for further financial support [50][56] - Italy and Belgium have expressed opposition to using frozen Russian assets for Ukraine, complicating the financial support discussions [44][48]

Japanese Bond Market Analysis - Japanese 30-year bond market is experiencing significant activity, with the 10 to 30-year spread nearly twice the normal spread over the last 25 years, reaching almost 160 compared to the usual 85 [2] - Japan is undergoing a normalization of its monetary policy after a period of yield curve controls and deflation [3][10] - The rise in Japanese bond yields could lead to a slowdown in the Japanese economy [7] Carry Trade Implications - Estimates suggest a $500 billion carry trade exists, and rising Japanese yields could cause capital to flow from the US back to Japan [5] - The unwinding of the carry trade is expected to continue as the US lowers interest rates and Japan raises them [10] Bond Samurai Influence - "Bond Samurai" are influencing the Japanese government to slow down quantitative tightening and adjust bond issuance towards the long end [6] - If the Japanese government doesn't heed the "Bond Samurai's" advice, rates could rise further, leading to a significant economic slowdown that could impact the US [7] US Market Impact - US real rates are approximately 100 basis points too high on the long end [11] - High US real rates could lead to a continued economic slowdown in the US unless they are lowered quickly [12]

Summary of Key Points from the Conference Call Industry Overview - **Focus**: Asia FX and Rates Outlook for 2026 - **Key Themes**: Stable USD outlook, potential downside risks, and Asia rates expected to rise as the easing cycle ends Core Insights 1. **USD Outlook**: - Stable USD expected into Q1 2026, with a forecast of a ~2% decline by Q2 2026 and ~4% by end-2026 from current levels [1][5][44] - Risks include elevated foreign positioning in US assets and potential corrections in US equities [10][44] 2. **Asia Rates**: - Anticipation of a broad increase in rates into Q1 2026 as the easing cycle concludes, particularly in the front end [1][25] - Key macro indicators such as PMIs and Nomura's leading index of Asian exports are improving [25] 3. **Top FX Trades**: - Long EUR/INR with a target of 107.7 by end-March 2026, conviction level 5/5 [3][30] - Short SGD/JPY targeting 115.8 by end-March 2026, conviction level 4/5 [3][38] - Long NZD/USD targeting 0.59 by end-March 2026, conviction level 4/5 [3][34] - Short USD/TWD targeting 29.8 by end-May 2026, conviction level 3/5 [3][42] 4. **Economic Growth Projections**: - US growth forecasted at 3.0% q-o-q SAAR in Q1 2026, driven by private consumption and investment [7] - Other major economies (Euro area, Japan, China) projected to grow at lower rates of 1.2%, 1.1%, and 3.2% respectively [7] 5. **Inflation and Monetary Policy**: - Expectations of stable inflation in the US, with the Fed likely to maintain rates unchanged in December 2025 [8] - The Bank of Japan (BOJ) expected to hike rates by 25bp in December 2025 [8] 6. **Risks to USD and Global Markets**: - Potential for larger downside moves in USD due to various factors including a slowing US labor market and concerns over Fed independence [10][44] - Elevated foreign positioning in US portfolio assets poses risks of an unwind [10][44] Additional Important Insights 1. **India's Economic Context**: - India's current account deficit projected to worsen due to high US tariffs, with a merchandise trade deficit of USD41.7 billion in October 2025 [31] - The Reserve Bank of India (RBI) expected to cut rates further, which may pressure the INR [31][30] 2. **China's Economic Dynamics**: - China's growth forecast to slow from 4.9% in 2025 to 4.3% in 2026, but this may not lead to lower rates due to a flat swap curve [29] 3. **Geopolitical Factors**: - Potential for a US-China trade deal and a Russia-Ukraine peace deal could influence market dynamics positively [15][8] 4. **Market Sentiment**: - Caution among investors regarding US equities despite a strong rally in indices like Nasdaq and S&P [10] - Concerns over the sustainability of the AI investment boom and its impact on financial markets [38] 5. **Long-term Investment Strategies**: - Focus on selective positioning for the end of the Asia rates easing cycle, with expectations of higher long-end rates in certain markets [28][25] This summary encapsulates the key points discussed in the conference call, providing insights into the Asia FX and rates outlook, economic projections, and potential risks affecting the market.

Summary of Key Points from the Conference Call Industry Overview - **Focus**: Global macroeconomic outlook, interest rates, commodities, currencies, and emerging markets Core Insights US Rates - Yields are expected to remain stable in the short term, with a forecast for 2-year yields around 3.60% and 10-year yields at 4.25% by 1H26, and 3.85% and 4.35% by YE26 respectively [10][33] - The Federal Reserve is anticipated to implement two rate cuts in 1H26, with a target range for the funds rate of 3.25-3.5% by 1Q26 [10][44] - The unemployment rate is projected to peak at 4.5% in 1Q26 before easing to 4.3% by 4Q26 [10] International Rates - Growth in developed markets (DM) is expected to remain at or above potential, with inflation gradually declining but remaining above target in some areas [4] - Central banks in DM are likely to pause or conclude easing cycles in 1H26, with specific forecasts for 10-year yields: 4.35% for UST, 2.75% for Bunds, and 4.75% for gilts by 4Q26 [4][36] Commodities - The oil market is expected to stabilize due to rising demand and production cuts, with a bullish outlook for gold projected to reach $5,000/oz [6] - Agricultural stock-to-use ratios are expected to remain low, indicating potential supply constraints [6] Currencies - A bearish bias on the USD is anticipated, driven by positive growth in the rest of the world (RoW) and US twin deficits [52] - Preference for high beta/yielding currencies, with key themes including global procyclicality and synchronized central bank pauses [53] Emerging Markets - Emerging markets (EM) are expected to experience lower macro volatility, supporting local markets in 2026 [6] - Growth and inflation in EM are projected to remain stable, with limited central bank easing [6] Additional Important Insights - The Treasury is well-funded through FY25, but a significant funding gap is expected to emerge in FY26, with coupon size increases anticipated starting in November 2026 [17][20] - The demand for Treasuries is shifting towards more price-sensitive investors, which may help keep long-term yields anchored at higher levels [29] - The passage of the OBBBA raised the debt limit by $5 trillion, expected to last until the second half of 2027 [23] - Seasonal patterns suggest a gradual decrease in bill sizes into December, followed by a rebound as corporate taxes lift the Treasury General Account (TGA) [21][23] Conclusion - The macroeconomic outlook indicates a cautious but stable environment for interest rates, commodities, and currencies, with specific attention to the evolving dynamics in emerging markets and the implications of fiscal policies on Treasury demand and yields.

Core Viewpoint - The Bank of Japan is facing a critical decision regarding its monetary policy as rising government bond yields threaten to disrupt its normalization process and impact economic growth [1][3]. Group 1: Bond Yields and Economic Impact - The yield on the benchmark 10-year Japanese government bonds (JGBs) reached 1.917%, the highest since 2007, while the 20-year and 30-year JGB yields hit 2.936% and 3.436%, respectively, marking levels not seen since 1999 [2]. - Japan's inflation has remained above the Bank of Japan's 2% target for 43 consecutive months, complicating the decision to raise rates amidst rising bond yields [3]. - Rising bond yields are expected to increase borrowing costs, further straining Japan's fiscal situation, which already has the highest debt-to-GDP ratio globally at nearly 230% [4]. Group 2: Government Stimulus and Debt Concerns - The Japanese government is preparing to implement its largest stimulus package since the pandemic, which raises concerns about the country's increasing debt levels [5]. - The new debt issuance of 11.7 trillion yen to finance the supplementary budget is 1.7 times larger than that issued under the previous administration [5][6]. Group 3: Global Market Implications - The unwinding of yen-funded leveraged carry trades due to a hawkish BOJ rate hike and disappointing U.S. macro data led to a significant sell-off in global stocks, with Japan's Nikkei index dropping 12.4% in August 2024 [7]. - Rising Japanese yields have narrowed the rate differential, raising concerns about another potential unwind of carry trades, although experts believe a repeat of the 2024 market meltdown is unlikely [8][9]. - Structural flows from retail allocations in pension funds and life insurance are expected to anchor foreign holdings, making large-scale repatriation of funds into Japan improbable [10].

Market Overview - The cryptocurrency market is experiencing a significant downturn, with nearly $1 billion in leveraged crypto positions liquidated, leading to Bitcoin's drop of 8% to below $84,000, marking a year-to-date decline of over 9% [2] - Ether has plummeted 10%, resulting in an 18% decrease since last December, while the bottom half of the largest 100 digital assets has seen a decline of almost 70% this year [3] Retail Sector Insights - Black Friday saw record online spending of $11.8 billion, a 9% increase from last year, driven by an 85% surge in AI-driven traffic to retail sites [4] - Thanksgiving Day also set a record with $6.4 billion spent online, indicating strong demand as Cyber Week commenced [5] International Market Dynamics - Japanese stocks experienced weakness, contributing to a decline in futures, while the yen strengthened amid expectations of an interest rate hike from the Bank of Japan [7] - The 2-year yield in Japan rose to its highest level since 2008, reflecting market reactions to potential changes in monetary policy [8] Technology Sector Earnings - CrowdStrike is expected to report an EPS of around $0.94 for Q3, indicating a year-over-year growth of approximately 20%, with a revenue forecast of $1.21 billion [10] - Marll Technology is projected to have an EPS of about $0.74, up from $0.67 in the previous quarter, with revenue expected to exceed $2 billion [11] Federal Reserve Commentary - The market is closely monitoring comments from Federal Reserve officials, particularly regarding potential monetary policy changes, with rate-cutting expectations rising significantly [13]