Three months ago, when Australia unexpectedly revealed that its recent "stellar" job numbers had in fact been cooked we asked, rhetorically, why the sudden admission it was all a lie? Simple: weakness in commodity prices "is far greater than people had been expecting,” the nation's top economist said. Australia is now "swimming against the tide" because of uncertainties in the global economy, he added.
Following yesterday's Yen surge in the aftermath of the disappointing BOJ announcement, the pain for USDJPY long continued, with the key carry pair tumbling as low as 106, the lowest level since October 2014 before stabilizing around 107, and is now headed for its biggest weekly gain since 2008, which in turn has pushed the US dollar to to its lowest close in almost a year as signs of slowing growth in the U.S. dimmed prospects for a Federal Reserve interest-rate increase. As a result, global stocks fell and commodities extended gains in their best month since 2010.
It is very fitting that on today's April 28th anniversary of the bull market, the day that officially makes this the second-longest "bull market" in history, the market got a stark reminder of just how it got there: through constant and relentless central bank intervention, which has been "beneficial" to stocks for the most part, however last night was anything but.
With the Fed decision just one day away, followed the very next day by the increasingly more irrational BOJ, stocks had no desire to make significant moves and overnight's boring session was the result, as European stocks and U.S. index futures rose modestly but mostly hugged the flatline while Asian declined 0.2% for a third day as raw-material shares declined and Tokyo equities slumped before central bank meetings in the U.S. and Japan this week. China’s stocks rose the most in almost two weeks, up 0.6% but failed to rise above 3000 on the Shanghai Composite, in thin trading.
Just as US equity futures were about to roll over following some very substantial misses yesterday by the likes of Google, Microsoft, Starbucks and a plunge in Visa shares, overnight who came to the markets' rescue but the BOJ, when shortly after midnight Bloomberg reported that "according to people familiar with talks at the BOJ" which is the traditional keyword for a BOJ source testing out the market's reaction, Japan's central bank may "help" local banks to lend by offering a negative rate on some loans.