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The Bank of Japan stood pat. Japan’s central bank opted to keep policy unchanged, holding its asset purchase program at an annual rate of about 80 trillion yen. The 8-to-1 vote saw the dissenter argue for the central bank to slow its asset purchases to an annual pace of 45 trillion yen. “Japan’s economy has continued to recover moderately but exports and output are affected by the slowdown in emerging economies,” the BOJ’s statement said. The Japanese yen is stronger by 0.4% at 119.71 per dollar.
Australia’s central bank sounded dovish. The Reserve Bank of Australia warned risks to the Australian economy are increasing. The central bank pointed to the slowdown in China and possible US rate hike as potential headwinds from abroad. Domestically, the RBA noted investment and capital expenditures were subdued and wage pressures were weak. The Australian dollar is weaker by 0.1% at .7130.
German economic sentiment collapsed. Economic sentiment in Germany has collapsed during September. The latest ZEW print fell 12.9 points to 12.1, making for the lowest reading since November. ZEW President Professor Clemens Fuest said, “The weakening economic development in emerging markets dampens the economic outlook for Germany’s export-oriented economy.” He continued, “While economic growth in the second quarter was largely driven by external demand, it is becoming less likely that exports will stimulate growth in the near future.” The reading on current conditions ticked up 1.8 points to 67.5. The euro is little changed near 1.1305.
There’s no inflation in the UK. August CPI in the UK printed 0.0% year-over-year, in-line with estimates. This represents a slight downtick from the July number of 0.1% YoY. Stripping out the more volatile food and energy, core prices eased to 1.0% YoY. The British pound is down 0.1% at 1.5420.
Twitter’s CEO search might not be close to over. Re/code’s Kara Swisher and Kurt Wagner report the Twitter CEO search might last for a few more months. The duo points to the lack of an announcement in the aftermath of it’s recent board meeting as evidence, and says numerous people close to the situation believe an announcement might not be made until October or November. One source told them, “This is a critical decision and not a TV show. The board is certainly not going to be rushed into this.”
BP wants a ruling it manipulated natural gas prices overturned. The energy giant has appealed to the Federal Energy Regulatory Commission to overturn a ruling it manipulated natural gas markets in Texas in 2008. Bloomberg reports, “Traders at BP’s Southeast natural gas desk were accused of a scheme to lower next-day, fixed-price natural gas prices at the Houston Ship Channel hub from Sept. 18 through Nov. 30, 2008, to boost physical and financial bets.” BP argued the trading environment was rather unusual as not only was it the heart of the financial crisis, but also a period of heavy hurricane activity.
Carl Icahn upped his stake in Cheniere Energy. The activist investor increased his stake to 9.59% of the company, up from 8.18% in August, according to an amended 13D filing. Icahn has an opposing view of the company from noted short seller Jim Chanos, who just last week said he was short the stock and called it a “looming disaster.”
Global markets are mixed. China’s Shanghai Composite (-3.5%) paced the decline in Asia and France’s CAC (+0.8%) leads the way higher in Europe. S&P 500 futures are up 1.00 points at 1945.00.
US economic data is heavy. Retail sales and Empire manufacturing are due out at 8:30 a.m. ET and are followed by industrial production and capacity utilization at 9:15 a.m. ET. Data concludes for the day at 10 a.m. ET with the release of business inventories. The US 10-year yield is down 1 basis point at 2.17%.
The Fed’s big day is approaching. On Thursday, the Fed will announce its latest policy decision. Economists remain torn over whether or not the central bank will raise its key rate at the meeting. Currently, the market is pricing in a 30% probability of a rate hike, up from 28% over the past couple of days. The markets sees a 58.7% probability of at least one rate hike by the end of the year.
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