Japan inflation data, China Loan Prime Rates

The People’s Bank of China left the loan prime rates for 1-year and 5-year unchanged, widely in line with expectations.

The 1-year LPR stayed at 3.65% while the 5-year LPR remained at 4.3%, both unchanged since August, 2022.

The offshore and onshore Chinese yuan was flat and last stood at 6.7679 and 6.7738 against the U.S. dollar.

— Jihye Lee

Japan’s core inflation rose to 4% in December last year on an annualized basis, the highest since December, 1981 and in line with expectations.

The reading climbed from the inflation print of 3.7% seen in November.

On a monthly basis, consumer prices rose 0.2% in December, remaining flat from the previous month.

The Japanese yen traded 0.16% weaker against the U.S. dollar to stand at 128.63.

— Jihye Lee

There were about 190,000 initial claims for unemployment in the U.S. for the week ending on Jan. 14, which is smaller than expected and underscores the continued resiliency of the labor market.

That’s below the 215,000 initial claims expected for the week by analysts polled by Dow Jones. It also marks a decrease from the prior week’s 205,000 claims.

Market participants have watched labor data for signs of the job market cooling. Labor is an area of the economy that has stayed robust even as other areas showed contraction following the Federal Reserve’s series of interest rate hikes.

— Alex Harring

Federal Reserve Governor Lael Brainard said Thursday she expects interest rates to remain high despite recent signs that inflation is weakening.

In a speech delivered at the Chicago Booth School of Business, the central bank official vowed to “stay the course” until inflation shows more signs that it’s moving closer to the Fed’s 2% goal.

“”Even with the recent moderation, inflation remains high, and policy will need to be sufficiently restrictive for some time to make sure inflation returns to 2% on a sustained basis,” she said.

—Jeff Cox

The U.S. dollar has been sliding in recent months and that’s good news for commodities, said Steven Glass of Pella Funds Management.

He’s especially bullish on copper, naming three stocks to buy.

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— Weizhen Tan

Boston Federal Reserve President Susan Collins said Thursday that she thinks the central bank can enact smaller interest rate hikes after a series of aggressive moves last year.

“More measured rate adjustments in the current phase will better enable us to address the competing risks monetary policy now faces – the risk that our actions may be insufficient to restore price stability, versus the risk that our actions may cause unnecessary losses in real activity and employment,” she said in prepared remarks.

Collins did not specify where she thinks policy should head next. But the Fed at its December meeting approved a 0.5 percentage point increase after four straight 0.75-point moves.

While most economists expect at least a mild recession this year, Collins said he is “reasonably optimistic that there is a pathway to reducing inflation without a significant economic downturn.”

—Jeff Cox

Wall Street is bullish about China’s reopening. But Morgan Stanley is going even further: It’s predicting that Chinese stocks will beat global markets this year.

The investment bank named its top stock picks, including one tech giant it gives around 30% upside potential.

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