Japan services sector grows at fastest pace in eight months for February
Japan’s services sector in February expanded at its fastest rate since June 2022, a non-public survey from au Jibun bank showed.
The country’s services purchasing managers index got here in at 54, higher than the 52.3 in January. A reading above 50 signals expansion, while a reading below 50 indicates contraction for the sector.
In its report, the bank noted that Japanese service providers indicated that business activity rose sharply midway through the primary quarter of 2023.
Activity increased on the fastest pace in eight months, “amid a notably stronger rise in latest business inflows,” the report said.
— Lim Hui Jie
Inflation in Japan’s capital city slowed in February
Tokyo’s consumer price index rose by 3.3% in February, in keeping with economists expectations polled by Reuters, and a lower print than January’s 4.3% government data showed.
Overall, CPI for the capital city reached 3.4%, a cooler print from the 4.4% seen last month, while prices excluding food and energy for Tokyo rose by 1.8%, also a slower pace than 1.7% from January.
The Japanese yen barely weakened to 136.7 against the U.S. dollar.
— Jihye Lee
Japan’s jobless rate falls to lowest level since February 2020
Japan’s unemployment rate for January got here in at 2.4%, 0.1% lower in comparison with December and barely below economists’ expectations of two.5%
That is the bottom unemployment rate since February 2020, in accordance with Refinitiv data.
Japan’s jobs to applicants ratio also stood at 1.35, down from 1.36% in December.
— Lim Hui Jie
10-year Treasury yield poised to maneuver higher, says Credit Suisse
Now that the 10-year Treasury yield has broken above the 4% psychological barrier, it should proceed to maneuver higher, in accordance with Credit Suisse.
“This could open up a deeper rise inside what we now expect to be an excellent broader range. Next supports are seen at 4.11%, then the 4.325% October high,” analyst David Sneddon wrote in a note Thursday.
The yield on the benchmark 10-year was last up nearly 8 basis points to 4.073%.
10-year Treasury yield year-to-date
CNBC Pro: Jumping on the China bandwagon? Analyst reveals whether A-shares or H-shares are a greater bet
China’s reopening from the pandemic has been an enormous theme in 2023. However the recent pullback in Chinese stocks is a possibility for investors to snap up opportunities, in accordance with Bernstein analyst Rupal Agarwal.
While A-shares and H-shares are each avenues for investors to achieve exposure to the China reopening theme, Agarwal said she believes one is the higher option.
Pro subscribers can read more here.
— Zavier Ong
Fed’s Bostic says he’s ‘firmly’ in favor of sticking with quarter-point hikes
Atlanta Federal Reserve President Raphael Bostic said he thinks the central bank can persist with quarter-point rate of interest hikes.
“I’m still very much of a mindset that slow and regular goes to be the suitable plan of action,” Bostic told media members. He added that he favors rate hikes of 0.25 percentage point, a step down the Fed took at its meeting a month ago.
“Without delay I’m still in very firmly within the quarter point move pacing,” he added.
Another Fed officials have said they’re open to climbing by half a degree after they meet later this month. Market pricing currently points to that move, though the probability for a half-point increase has risen in recent days.
—Jeff Cox
CNBC Pro: A.I. is all the fashion. This investor shares a less obvious way — and one stock — to play the trend
Artificial intelligence has taken Wall Street by storm since since ChatGPT was launched and went viral — causing a surge in interest amongst investors in what stocks may gain advantage from the trend.
But there’s one other solution to get into the AI buzz that is happening without delay, in accordance with tech investor Mark Hawtin, who names one stock to play it.
CNBC Pro subscribers can read more here.
— Weizhen Tan
S&P 500 trading near key level that would signal more declines
The S&P 500 has been flirting with its 200-day moving average, and a drop below that level could signal more selling.
The 200-day was at about 3,940 Thursday, and the index fell below that level but recovered Wednesday. The S&P 500 was trading near that level Thursday morning.
The 200-day is literally the common of the last 200 closing prices, and it’s viewed as a momentum indicator for a stock or index. Stock chart analysts would view it as a negative signal if the index were to shut below that level and stay below it.
—Patti Domm
Implied probability of U.S. debt default at highest since 2013, MSCI says
Credit-default swap (CDS) trading on U.S. Treasury bonds has picked up since January, with implied default probabilities increasing “to levels not seen because the 2013 debt-ceiling debate,” MSCI researchers Andras Rokob and Andy Sparks wrote in a blog post Thursday.
CDS spreads have widened out in 2023, echoing similar moves in each 2011 and 2013, during two other episodes that saw battles between Congress and the White House over raising the U.S. debt ceiling, the researchers wrote.
“Assuming a 95% recovery, the CDS market’s one-year implied default probability was 11.3%, as of Feb. 24, up significantly from the three.3% probability prevailing at first of the yr,” MSCI said. “The results of a possible default by the U.S. government extend beyond the immediate impact on holders of Treasurys,” Rokob and Sparks warned. “Major market dislocation and a pointy slowdown in economic activity could each be realistic possibilities.”
— Scott Schnipper; CNBC’s Jeff Cox contributed to this report
