Terror over Turkey and Germany – 20 Dec 2016

Terror over Turkey and Germany – 20 Dec 2016


While BOJ monetary policy remains unchanged, the economic outlook has been upgraded slightly. Investors focus more on Monday terrorism events in Turkey where the Russian ambassador was shot and killed by the Turkish police officer, while in Berlin, a truck ploughed into a crowded Christmas market. Terror attack in Turkey is worrying, as it shows that Turkish security forces (NATO Member) have been infiltrated by ISIS.

The terror attack in Germany was just a matter of time to occur, after the mass terror attacks which have taken place in France for the past 2 years. If there is anything that 2016 would be remembered it would be the radical change in the political contractiveness.

Brexit, Trump and the terror attacks at the heart of the west world were ignored by markets. U.S economy seems to be in the most positive position for 2016. As a result, U.S equities have climbed to historic highs (financials and industrials) while interest rates on U.S bonds have been skyrocketed as USD is in multiyear highs.

Daily Key points:

• BOJ’s Kuroda says they will debate weak yen impact at next outlook report
• IMF’s Lagarde keeps job, escapes penalty after negligence conviction in France
• German producer prices climb out of deflation for first time since 2013
• Kuroda do not think yen has weakened excessively at this stage
• BoJ Governor Kuroda: Appropriate to continue current policy for now
• BoJ: Vote was 7 to 2 to keep policy unchanged.