BOJ ends eight years of negative rates

The Bank of Japan

The yen was heavily down on Tuesday against all major currencies after the Bank of Japan (BOJ) finally decided to raise its interest rates for the first time since 2007, ending eight years of negative interest rates. The BOJ will now guide its overnight rate in a range of 0–0.1%, partly by paying 0.1% interest on deposits. It abandons its yield curve control; purchases of risky assets like ETFs and Japanese real estate investment trusts are discontinued, but the BOJ will keep buying "broadly the same amount" of government bonds as before.

The Japanese yen

This shift makes Japan the last central bank to exit negative rates. A first step toward policy normalization shows the BOJ is now confident that Japan has emerged from the grip of deflation. Inflation has been exceeding the BOJ's 2% target for well over a year. The JPY fell to almost 150 per dollar as investors took the BOJ's dovish guidance as a sign the interest rate differential between Japan and the United States likely will not narrow much.

The Australian dollar

The Australian dollar also slipped overnight as the RBA tempered its tightening bias. As expected, the Reserve Bank of Australia kept rates at 4.35% but took a slightlydovish turn. It now doesn’t warn anymore that a further hike could not be ruled out, reinforcing the idea that the next move would be an easing of policy. Futures now imply around a 43% chance of a first cut in June, rising to 74% for August

German economic sentiment

Elsewhere, Germany's economic sentiment is expected to rise to 20.1 from 19.9 in February. This would be the eighth consecutive month of gains, reaching its highest level in 13 months. Canada's CPI growth is forecast to accelerate to 3.1% in February YoY, up from 2.9% the previous month.

Unilever

Unilever will accelerate its growth action plan through the separation of its ice cream business. Total restructuring costs will amount to 1.2% of total turnover for the next three years.

AstraZeneca

AstraZeneca buys Fusion Pharmaceuticals for approximately $2 billion to accelerate the development of its cancer treatments. AstraZeneca will offer $21 per share in cash. The transaction is expected to close in Q2 2024.

Wickes

Wickes posts an adjusted profit before tax of $52 million for the full year, higher than the $46.9 million expected by analysts. Wickes announces the acquisition of a 51% stake in UK solar panel installers Solar Fast. The UK market for domestic solar installations is highly fragmented and is expected to expand significantly from an estimated £1.1bn in 2024 to £1.5bn in 2028.

NVIDIA

NVIDIA CEO Jensen Huang didn't waste time on Monday when launching his company's annual developer conference. Huang introduced Nvidia's latest chip, the B200, which is said to be 30 times faster at some tasks than its predecessor. He did not give specific details or any price details. He also detailed a new set of software tools called microservices, aiming to make it easier for businesses to incorporate an AI model into their work. Nvidia is also expanding its collaborations with BYD and other Chinese automakers. BYD, now the world's No. 1 electric vehicle manufacturer, will use Nvidia's next generation of in-vehicle chips, called Drive Thor, to enable increased levels of autonomous driving.

Crude oil

Saudi Arabia and Iraq, respectively, OPEC's first and second-largest producers, are helping to push prices higher. Iraq will reduce crude exports to 3.3 million barrels per day in the coming months to compensate for exceeding its OPEC+ quota since January. Saudi crude exports fell for a second straight month, down to 6.297 million bpd in January. Meanwhile, the market can see signs of growing demand. In China, the world's biggest oil importer, factory output and retail sales beat expectations in the January–February period. China's crude oil throughput rose 3% in the period.