Bank of Japan relaxes yield control; JPY jumps

The Bank of Japan

As expected, the Bank of Japan has maintained its ultra-low interest rates. The short-term interest rate target remains at -0.1%, and the 10-year government bonds yield around 0%.

But the bank took steps to make its yield curve control policy more flexible. It maintained guidance, allowing the 10-year yield to move 0.5% up and down around the 0% target, but changed terminology, talking about "references" rather than "rigid limits". The Bank of Japan (BOJ) also said it will offer to buy 10-year Japanese government bonds (JGB) at 1.0% in fixed-rate operations instead of the previous rate of 0.5%.

Retail sales in Australia

Retail sales in Australia unexpectedly fell by 0.8% in June month-over-month (MoM), compared with market estimates of a flat reading. This was the second drop in retail trade so far this year, as cost-of-living pressures continued to weigh on consumer spending.

The Eurozone

The French economy managed to grow significantly more than expected in the second quarter. The eurozone's second biggest. The economy grew 0.5% in the three months through the end of June after expanding a revised 0.1% in the first quarter.

Q2 gross domestic product (GDP) is also in Germany. The first economy of the eurozone, currently in technical recession, is expected to have expanded by 0.1%. Also, in Germany at 1 p.m.: consumer price index. The pace of inflation is expected to decelerate to 6.2% in July year-over-year (YoY), after 6.4% the previous month.

Over in the US at 1.30 p.m. core personal consumption expenditures (PCE) price index growth is forecast to ease to 0.2% in July MoM after 0.3% the previous month. Year-over-year (YoY) is anticipated to fall to 6.2%.

NatWest

NatWest posted a better-than-expected first-half profit on Friday. NatWest reported a pre-tax profit of £3.6 billion, compared to 2.6 billion pounds the prior year and above the 3.3 billion pounds average of analyst forecasts compiled by the bank. The liquidity coverage ratio (LCR) is 141%, representing £45.3 billion of headroom above the minimum requirement of 100%. The bank also announced an interim dividend of 5.5 pence per share and a share buyback of up to 500 million pounds for the second half of the year.

Standard Chartered

Standard Chartered posted an underlying pretax profit of $3.3 billion, up 29% at constant currency, better than expectations of $3.18 billion. The bank also announced a $1 billion share buyback plan as rising rates and record financial market business propelled margins.

IAG

British Airways owner IAG's quarterly profit beat analyst forecasts by 40%, and it said it was encouraged by the outlook for the summer as demand for leisure travel remains strong.

Intel

Intel rose 8.5% in extended trading on the IG platform after posting a surprise profit in Q2. The Chip maker earned 13 cents per share when analysts foresaw a loss of 4 cents. Intel also forecast third-quarter earnings above Wall Street expectations.

Over the past year, the PC market has tumbled as consumers equipped themselves during the pandemic, creating an inventory buildup. The industry glut has started to ease, with PC shipments falling only 11.5% in the June quarter. This improvement in the PC market prompted Intel to forecast better margins for the third quarter.

For the current quarter, Intel says the PC market has tumbled over the past year as consumers equipped themselves during the pandemic, creating an inventory buildup. The industry glut has started to ease, with PC shipments falling only 11.5% in the June quarter. This improvement in the PC market prompted Intel to forecast better margins for the third quarter. For the current quarter, Intel forecasts earnings per share of 20 cents. Analysts expected 16 cents.

Ford Motor

Ford Motor has raised its 2023 guidance along with a significant beat on its second quarter earnings. Adjusted earnings per share (EPS): 72 cents vs. 55 cents are expected. Automotive revenue: $42.43 billion vs. $40.38 billion expected. Strong pricing and demand for the automaker's trucks were the main drivers behind the numbers.

The company also increased its full year adjusted earnings forecast to a range of between $11 billion and $12 billion, up from a prior forecast of $9 billion and $11 billion. It also upped its expected adjusted free cash flow from $6 billion to $6.5 billion and $7 billion.