Digital Daybreak: Middle East & Africa

Bank of Japan (BOJ)

• The BOJ ended negative interest rates after 17 years and scrapped its yield curve control policy.
• The BOJ raised interest rates for the first time since 2007, citing higher wage gains and a virtuous cycle of inflation backed by wage growth.
• The BOJ maintained an accommodative policy stance and did not signal any further tightening in the near future.
• The yen weakened to a two-week low against the US dollar following the BOJ's decision.
• Financial conditions in Japan remain accommodative, and analysts see a positive long-term outlook for Japanese equities driven by factors such as inflation, wage increases, and corporate governance reforms.

Reserve Bank of Australia (RBA)

• The RBA held its policy rate steady at 4.35%, citing finely balanced risks to the economic outlook.
• RBA Governor Michelle Bullock emphasized the need for caution and vigilance in achieving the inflation target and did not rule out any future policy options.
• Economists predict that inflation in Australia may undershoot the RBA's projections due to a weakening demand side of the economy and a positive development in electricity prices.
• The RBA is signaling a shift in its stance on interest rates, moving away from hawkish rhetoric and acknowledging progress in moderating inflation.
• The RBA's statement indicates a more balanced assessment of risks, with the central bank noting both upside and downside risks to interest rates.
• The Australian dollar declined against the US dollar and the yen following the RBA decision.

US Federal Reserve

• The US Federal Reserve's upcoming dot plot is expected to influence market sentiment, with a possibility of showing a reduction in projected rate cuts for the year.
• The Fed's decision tomorrow is expected to impact the short end of the yield curve, but not the medium to long end, which has implications for the equity market.
• The growth story in the US is seen as stronger than in Europe, with the US expected to have growth of 2.5% compared to Europe's 0.5%.

Other Central Banks

• The Bank of England is expected to hold interest rates as inflation remains sticky and the central bank wants to ensure inflation sustainably returns to target.
• The Reserve Bank of New Zealand is expected to narrowly avoid a technical recession due to some strength in exports, but growth will be modest due to high interest rates and a lack of population growth.

Currencies

• The Japanese yen weakened against the US dollar, reaching approximately 150 yen per dollar, while the Australian dollar also depreciated.
• Emerging market currencies, including the MSCI basket, faced continued pressure and extended declines for a sixth consecutive day due to the strengthening U.S. dollar.
• Ghana's Cedi is expected to depreciate further due to weak cocoa revenues and a lack of central bank intervention.
• Egypt's currency is expected to remain within a range of 45 to 50, with the central bank and government likely to prevent a sustained move above 50.

Geopolitics

• Israel and Hamas are reportedly negotiating a possible deal to release hostages during a temporary ceasefire.
• US President Biden has warned Israeli Prime Minister Benjamin Netanyahu against a ground operation in Gaza.
• The situation in the Gaza Strip is worsening, with famine looming in the north and food shortages in the south.
• The US, Jordan, the United Arab Emirates, and Egypt are pushing to get more aid into the Palestinian territory through land, airdrops, and a maritime corridor from Cyprus.

Technology

• Nvidia unveiled its new Blackwell chip, which is expected to replace the Hopper chip and further extend the company's dominance in artificial intelligence computing.
• NVIDIA announced partnerships with major cloud computing companies like Amazon, Microsoft, and Oracle.
• NVIDIA introduced a fleet of humanoid robots developed with Disney, aiming to train their brains virtually and deploy them alongside humans in various environments.
• Despite the underwhelming announcement, investors remain bullish on NVIDIA, with some expecting the stock to double even within the same year.

Business and Finance

• Barclays seeks to expand relationships with sovereign wealth funds and private equity giants to increase profitability through advisory and equity underwriting services.
• UBS Group shares hit a 16-year high after a successful takeover of Credit Suisse and restructuring moves.
• US Secretary of State Antony Blinken expresses concern about China's actions in the South China Sea and its violation of the Philippines' rights.