Markets continue the Santa Rally on thin trading. On a day during which most markets remain closed, Asian shares inched up in positive territory.
In the US, trading activity will most likely be subdued due to lack of major economic data.
The Ruble advanced for 5 days now, culminating to an increase of 17%, a key driver being Russia ordering OAO Gazprom and other exporters to reduce foreign currency holdings to levels no higher than October standards. The Russian Central bank is also offering dollar and euro loans to banks to help major exporters that need foreign currencies finance operations.
The global slump in oil prices has lowered consumer inflation in Japan to 0.9%, prompting the BOJ to urge companies to pass on the benefits reaped by the weakened yen and falling fuel costs to employees in the form of wage hikes.
Saudi government revealed its budget which demonstrated a continuation of high-level expenditure in spite of pressure from lowering oil prices. Although it hasn’t declared what price of oil it has based its budget on, the IMF estimates a break-even figure of above 90$ a barrel, an obvious indication that the OPEC big shot expects an increase in oil prices next year.
BoJ Governor Kuroda addressed business leaders, stating how the decline in oil prices will be advantageous to Japan, which is a commodity-importing country. The decrease in oil prices might boost inflation in the long term, which suggests that the BoJ will rely on increasing inflation expectations refraining from greater easing in the near future. Abe’s policy changes will assume greater importance as Japan’s inflation slowed for a fourth month in November, with output falling by 0.6% and retail sales dropping by 0.3%.