BOJ Said to Mull March Hike, Dimon Warns Recession 'Not Off Table' | The Pulse 03/12

Summary

Bank of Japan officials are reportedly considering raising interest rates, with a decision expected at an upcoming policy meeting. The move is anticipated to be influenced by spring wage talks and CPI data. Meanwhile, unemployment has risen in the UK, relieving some inflationary pressures. In the US, President Biden's budget proposal includes middle-class tax breaks and higher taxes on corporations and the wealthy. Additionally, SpaceX's Crew Dragon capsule successfully splashes down off the coast of Florida after a six-month mission to the International Space Station.

Takeaways

• 📈 The Bank of Japan (BOJ) is considering raising interest rates, with the decision hinging on Friday's wage talk outcomes and CPI data.
• 💹 US futures are higher as markets await CPI data, with a recession not off the table and the Fed's interest rate decisions in focus.
• 🇬🇧 UK wage growth eases and unemployment rises for the first time since July, relieving some inflationary pressures and concerns for the Bank of England.
• 🌐 European equities and US stocks are experiencing some softness, with the UK gilt markets seeing yields down on softer labor data.
• 📊 The S&P futures are slightly up, with the expectation that the year-on-year CPI will be 3.7%, informing the decision-making process going forward.
• 💶 The pound is under pressure after wage data and unemployment rate ticked up, with the Bank of Japan officials edging closer to interest rate decisions.
• 📈 Novo Nordisk experiences a drug sales boom, particularly in obesity drugs, with total income and returns at $4.5 billion.
• 🚀 SpaceX's Crew Dragon capsule is set to splash down off the coast of Florida, marking the end of a six-month mission to the International Space Station.
• 🌐 Oracle shares report a spike in cloud computing bookings, with progress in capturing more of the competitive market.
• 📊 Generali reports better-than-expected profits, with the insurance business diversified and less reliant on interest rates.
• 💰 The US budget proposal by President Biden includes more services, middle-class tax breaks, and price controls, funded through higher taxes on the wealthy and corporations.

Q & A

What is the current focus of BOJ officials in relation to interest rates?

The Bank of Japan (BOJ) officials are edging closer to raising interest rates, with the decision hinging on the initial numbers from spring wage talks.

How are U.S. futures reacting to the anticipation of CPI data?

U.S. futures are higher as markets wait for CPI data, indicating a cautious optimism despite the potential for a recession.

What is the current state of unemployment in the UK?

Unemployment in the UK has risen for the first time since July, which is relieving some inflationary pressures and concerns.

How is the performance of the UK gilt markets affecting yields?

The UK gilt markets are showing a big whit with yields down, influenced by softer labor and wage data as well as the rising unemployment rate.

What is the current expectation for the year-on-year DPI print in the US?

The expectation for the year-on-year DPI print in the US is 3.7%, which will be crucial in informing decision-making going forward.

What factors could swing the decision at the Bank of Japan regarding interest rates?

The key factors that could swing the decision at the BOJ include wage trends, as the bank has been closely monitoring wage growth to see if it reads into prices for a positive inflation cycle in Japan.

What is the current stance of the Chief Investment Officer for France at UBS Global Wealth Management on Japanese stocks?

The Chief Investment Officer is neutral on Japanese stocks due to the need to consider currency positioning and valuations, which are more expensive than a year ago.

What is the outlook for the US economy according to the Chief Investment Officer for France at UBS Global Wealth Management?

The outlook is for a soft landing, with expected inflation coming down and growth in the US slowing, along with a total rate cut of 75 basis points by the end of the year.

What is the current strategy of NOVO NORDISK in terms of dealing with the surge in obesity drug sales?

NOVO NORDISK is focusing on scaling their operations to absorb the phenomenal inflows from the obesity drug sales, and they are considering acquisitions that align with their long-term strategy and can generate attractive long-term returns.

What is the SpaceX Crew Dragon capsule's recent mission?

The SpaceX Crew Dragon capsule recently completed a six-month mission with an international crew at the International Space Station, marking the company's seventh operational human spaceflight under the NASA Commercial Crew Program.

What is Oracle's performance in the cloud computing market?

Oracle has reported a spike in bookings in cloud computing, making progress in capturing more of the competitive market. They have indicated that they would be spending $7.5 billion in capital expenditure over the fiscal year to boost their cloud infrastructure.