When stripping away all the philosophy, the pompous rhetoric, and the jawboning, all central banks do, or are supposed to do, is to influence capital allocations and spending behavior by adjusting the liquidity preference of the population by adjusting interest rates and thus the demand for money.
It is safe to say that nobody expected the BOJ stunner announced last night, when Kuroda announced that Japan would become the latest country to unleash negative interest rates, for one simple reason: Kuroda himself said Japan would not adopt negative rates just one week ago! However, a few BIS conference calls since then clearly changed the Japanese central banker's mind and as we wrote, and as those who are just waking up are shocked to learn, negative rates are now a reality in Japan.
The deadly Zika virus has arrived in Europe, hospitalising one person in Denmark who tested positive for the mosquito-borne virus. Italy, Spain, the UK, and Switzerland have also confirmed that several people have been tested positive with the disease. RT.com reports: A Danish tourist contracted the virus while traveling through South and Central America, where Zika is spreading now. The patient is now being treated at the University hospital in Aarhus, Denmark’s second-largest city.
Der Spiegel is disturbed because the right-of-center Polish government is making the country “anti-Western.” Excerpts:
While the focus in the overnight session has traditionally been about two things, namely oil and China, today one can also throw in AAPL which is down 4% in the pre-market after its disappointing earnings yesterday in which it confirmed our channel-checked warnings about China from last summer, and the Fed which is set to release the January FOMC statement this afternoon.