GGMA Morning Brief: JPY strengthens on verbal intervention, Dimon says Trump attack on Fed could push up inflation, US PPI, retail sales, Fed speak in focus
Good morning,
I hope all is well.
Here are the main overnight news and market movers:
Markets: JPY strengthens on verbal intervention
Japan's top currency diplomat, Mimura, stated that authorities will take appropriate action against excessive FX moves and are not ruling out any options. He characterised recent currency movements as one-sided and rapid, expressing extreme concern about these developments. Mimura said he does not see economic fundamentals that support the recent moves in the yen. He also noted that officials are hearing about the demerits of a weak yen through import costs via various channels.
US stock futures edged lower, while bond futures are only a little changed. The US Dollar traded mixed against its G11 peers. Precious metals rose, while oil prices dipped. Copper prices are up slightly.
BOJ’s Ueda signals rate-hike path intact as talk of election picks up
Bank of Japan Governor Kazuo Ueda signalled he still intends to raise interest rates when conditions allow, in his first public remarks after speculation intensified over the likelihood that Prime Minister Sanae Takaichi will hold a national election next month. “We will keep raising rates and adjust the degree of monetary easing in line with the improvement in the economy and inflation if our outlook materializes,” Ueda said Wednesday in Tokyo, according to Bloomberg. The majority of economists expect the BOJ to hold its settings steady when the board sets policy on Jan. 23, with many predicting the next move higher might come in June or so. Most of the inflation measures are currently above the BOJ’s inflation target of 2%:
JP Morgan boss says Trump attacks on Federal Reserve could push up inflation
The boss of JP Morgan, the largest US bank, has said Donald Trump’s attacks on the Federal Reserve chair, Jerome Powell, are putting central bank independence at risk and could backfire and ultimately push up interest rates and inflation. Jamie Dimon told reporters on Tuesday he had “enormous respect” for the Fed chair, who on Friday became the target of a controversial criminal investigation by the US Department of Justice (DoJ) over alleged “abuse of taxpayer dollars”. “Everyone we know believes in Fed independence,” Dimon said during an earnings call. “And anything [that] chips away at that is probably not a great idea, and in my view, will have the reverse consequences. It’ll raise inflation expectations and probably increase [interest] rates over time.” (YF)
Trump urges Iranians to keep protesting, says 'help is on its way'
U.S. President Donald Trump urged Iranians on Tuesday to keep protesting and said help was on the way, without giving details, as Iran's clerical establishment pressed its crackdown against the biggest demonstrations in years. "Iranian Patriots, KEEP PROTESTING -- TAKE OVER YOUR INSTITUTIONS!!! ... HELP IS ON ITS WAY," Trump said in a post on Truth Social, adding he had cancelled all meetings with Iranian officials until the "senseless killing" of protesters stopped. (Nikkei) Oil and precious metal prices have risen over the past couple of days, which may be due to escalating geopolitical tensions in the Middle East.
US clears path for Nvidia to sell H200s to China via new rule
The Trump administration moved closer to allowing Nvidia Corp. to sell its H200 artificial intelligence chips to China by issuing revised criteria for winning US government approval to ship the processors to Chinese buyers. Under a regulation published on Tuesday, the Commerce Department said it will review applications for AI chip exports to China on a case-by-case basis, easing a previous US stance presuming denial of any request for permission to sell to customers in the Asian country. (BBG) However, Reuters reports that Chinese customs authorities told customs agents this week that Nvidia's H200 artificial intelligence chips are not permitted to enter China, according to three people briefed on the matter. Chinese government officials also summoned domestic technology companies to meetings on Tuesday, where they were explicitly instructed not to purchase the chips unless necessary, two of the people and a third source said.
Early data show the UK economy struggling in the budget aftermath
Early indicators suggest the UK economy struggled to rebound in the weeks after Chancellor Rachel Reeves' budget, with a deepening labour market downturn the biggest threat to hopes of a pickup in early 2026. Recent indicators suggest that household spending and the labour market have both deteriorated since Reeves announced a further £26 billion in tax rises in her Nov. 26 budget. Forecasters expect the economy to accelerate as temporary headwinds fade, but the current weakness and consumer caution are making the Labour Party's goal of the fastest expansion in the Group of Seven increasingly difficult. (BBG)
Australian job vacancies dip in the three months to November
Job vacancies dropped by 0.2 per cent in the three months to November 2025, according to new quarterly figures released today by the Australian Bureau of Statistics (ABS). This was driven by a decline in private-sector vacancies. Robert Long, ABS head of labour statistics, said: ‘There were 326,700 job vacancies in November, around the same as there were at the beginning of the year, in February 2025. ‘Over the twelve months to November 2025, there were 17,800 fewer job vacancies, a fall of 5.2 per cent. ‘Private sector job vacancies also drove the annual decrease, falling by 6.8 per cent in the year to November. Over the same time, public sector vacancies went up by 8.9 per cent.’ (ABS) AMP economist My Bui told NewsWire the labour market was slowing, albeit “very gradually”, and there could be a small tick up in the unemployment rate in 2026.“The labour market is definitely easing, but it’s not terrible,” she said. “Job vacancies have been trending down lately, and it has been since late 2024, but obviously at a very gradual pace.” (YF)
Here is a link to an interesting Westpac analysis on the dynamics between the unemployment rate and vacancies, also called the Beveridge curve.
China’s annual trade surplus hits a record $1.2t as exports soar
China’s export growth in December sharply beat expectations, catapulting the annual trade surplus to a record high, even as imports rose at their fastest pace in three months. Exports surged 6.6% in U.S. dollar terms last month from a year earlier, Chinese customs data showed Wednesday, topping analysts’ median estimate for a 3% growth and accelerating from a 5.9% jump in November. Imports rose 5.7% in December from a year earlier, topping expectations for a 0.9% growth — strongest since September last year when they rose 7.4%, according to LSEG data. Shipments to the U.S. plunged 30% in December from a year ago, declining for a ninth straight month. (CNBC – Continue Reading)
Today’s Macro Roadmap: US PPI, retail sales, Fed speak in focus
The primary focus in today’s economic calendar will be on the release of the US Producer Price Index (PPI) and retail sales reports for November. In addition, several important speeches from Federal Reserve policymakers are scheduled throughout the day. Their remarks will be closely monitored for any signals regarding future monetary policy direction and the overall economic outlook.
Given the October federal government shutdown, both the October and November producer price index (PPI) reports have been delayed. Unlike the CPI, however, the BLS collected October producer price data for most components and will release an estimate alongside the rescheduled November report, according to JPMorgan.
Also, the data is as of November, but we received the December CPI report already yesterday, which was softer than expected. Therefore, I doubt we will see a big market impact today (famous last words).
US retail sales are expected to rise in November, which is supported by the Chicago Fed CARTS index. JPMorgan is looking for a strong 0.8% m/m increase following muted readings in the last two months. Much of this improvement comes from the recovery in the autos segment, which had been depressed recently.
US existing-home sales are expected to increase in December amid a rise in pending home sales, which often lead. Other housing indicators also seem to have bottomed.
Good luck today!