# Take Five: Keeping the lights on Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-12-16 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Top trades for 2023: Japan policy, U.S. housing, EU energy Meta Description: Bank of Japan's policy meeting and rate decision, U.S. housing market status, and European energy outage worries in focus for 2023 market outlook with URL: https://financedigest.com/take-five-keeping-the-lights-onhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-12-16t084136z1lynxmpeibf0cirtroptp4ukraine-crisis-germany-energy-1736814712680-compressed.jpg) (Reuters) – The Bank of Japan will be the last of the major central banks to hold a policy meeting this year, and policy-makers in emerging economies also mark the year-end with rates decisions. The state of the U.S. housing market is in focus, while in [Europe unusually cold weather has raised concerns of electricity outages and renewed anxiety about energy](https://www.financedigest.com/europes-energy-crisis-and-the-nuclear-path-out.html "Europe’s energy crisis and the nuclear path out") costs. As the markets ponder the top trades for 2023, here’s a look at the week ahead in markets from Kevin Buckland in Tokyo, Lewis Krauskopf in New York, and Dhara Ranasinghe, Naomi Rovnick and Karin Strohecker in London. 1/PICKING A (JAPANESE) PIVOT Even the uber-dovish Bank of Japan has not been spared from investors trying to pick central bank pivot points. A shock acceleration in Tokyo consumer [prices to the fastest pace in 40 years has emboldened some to short Japanese government bonds ahead of Tuesday’s policy decision](https://www.financedigest.com/uks-ofcom-delays-bt-fibre-pricing-decision-after-ceo-remarks.html "UK’s Ofcom delays BT fibre pricing decision after CEO remarks"). Speculation was heightened by rare hints from policy board members that it might be time to review ultra-easy stimulus settings. But BOJ watchers [say a shift will not happen](https://www.financedigest.com/who-is-stormy-daniels-and-what-did-she-say-happened-with-trump.html "Who is Stormy Daniels and what did she say happened with Trump?") until Governor Haruhiko Kuroda steps down in April after a decade at the helm. There’s good reason to take it slow: the recovery is fragile and [inflation,](https://www.financedigest.com/greek-eu-harmonised-inflation-rises-to-3-5-y-y-in-july.html) while high, is nowhere near [European](https://www.financedigest.com/gazprom-books-no-yamal-europe-gas-transit-capacity-for-dec-30.html) and U.S. levels. And [nationwide CPI data](https://www.financedigest.com/keysource-awarded-major-contract-to-design-nationwide-network-of-data-centres-throughout-china.html "KEYSOURCE AWARDED MAJOR CONTRACT TO DESIGN  NATIONWIDE NETWORK OF DATA CENTRES THROUGHOUT CHINA") will only be due after the policy decision – made public on Friday. GRAPHIC: Bank of Japan holds fire https://www.reuters.com/graphics/GLOBAL-CENTRALBANKS/lbvggglydvq/chart.png ![Bank of Japan holds fire](https://onlineworldnews.com/wp-content/uploads/2022/12/1.jpg) 2/IT’S COLD OUT THERE A cold snap in [Europe raises the risk of electricity blackouts that could exacerbate pain](https://www.financedigest.com/analysis-rate-rises-pile-pain-on-sme-firms-in-u-s-and-europe.html "Analysis-Rate rises pile pain on SME firms in U.S. and Europe") inflicted by the energy shock and high inflation. It also tests Europe’s resolve to save energy and mitigate the economic impact of the Ukraine war. Europe’s gas storage is almost 90% full after European Union governments acted to build reserves following disruption of Russian supplies, but a series of nuclear outages, especially in France, has added to nervousness of electricty outages. [France is striving to avert power cuts](https://www.financedigest.com/france-strains-to-avert-power-cuts-as-cold-snap-tests-europes-energy-resolve.html "France strains to avert power cuts as cold snap tests Europe’s energy resolve"), and Germany is bleeding cash to keep the lights on. Emmanuel Macron says it was absurd to worry that blackouts would cripple infrastructure, while officials [warn of possible outages and France’s Banking Federation said cash machines](https://www.financedigest.com/pitiless-machines-will-kill-your-business-if-you-dont-respond-now-warns-servion.html "‘Pitiless machines’ will kill your business if you don’t respond now, warns Servion") would be affected. Traders, trying to assess how deep Europe’s economic slowdown will prove, should pay attention to the weather report. GRAPHIC: [European](https://www.financedigest.com/gazprom-books-no-yamal-europe-gas-transit-capacity-for-dec-30.html) recession concerns https://www.reuters.com/graphics/GLOBAL-ECONOMY/PMI/zdpxddxanpx/chart.png ![European recession concerns](https://onlineworldnews.com/wp-content/uploads/2022/12/2.jpg) 3/ECONOMY CLASS Can the United States ward off a recession as [consumer prices](https://www.financedigest.com/analysis-to-raise-prices-or-not-consumer-goods-makers-weigh-bets-on-buyer-strength.html "Analysis-To raise prices or not? Consumer goods makers weigh bets on buyer strength") come off the boil? [Investors get a fresh read-out on the world’s top](https://www.financedigest.com/top-ten-biggest-mistakes-by-novice-investors-and-how-to-avoid-them.html "TOP TEN BIGGEST MISTAKES BY NOVICE INVESTORS – AND HOW TO AVOID THEM") economy and its [inflation](https://www.financedigest.com/greek-eu-harmonised-inflation-rises-to-3-5-y-y-in-july.html) pressures on Tuesday when November housing starts and existing home sales numbers are due. In October, [rising mortgage rates](https://www.financedigest.com/shares-slip-yields-rise-as-u-s-data-sparks-rate-hike-concerns.html "Shares slip, yields rise as U.S. data sparks rate hike concerns") saw U.S. existing home [sales sink for a record](https://www.financedigest.com/inflation-drives-britains-record-christmas-grocery-sales.html "Inflation drives Britain’s record Christmas grocery sales") ninth straight month, home-building fell sharply with single-family projects dropping to a near 2-1/2 year low. Wednesday will [see the Conference Board consumer](https://www.financedigest.com/britains-next-sees-lower-profit-in-2023-as-consumer-outlook-darkens.html "Britain’s Next sees lower profit in 2023 as consumer outlook darkens") confidence survey, which slipped to a four-month low in November. The reading for the personal consumption expenditures index is also for release on Dec. 23 after recent [inflation data](https://www.financedigest.com/wall-st-seen-steady-ahead-of-inflation-data-fed-later-in-week.html "Wall St seen steady ahead of inflation data, Fed later in week") came in softer-than-expected. GRAPHIC: U.S. housing starts tumble https://www.reuters.com/graphics/GLOBAL-MARKETS/THEMES/jnpwyyawkpw/chart.png ![U.S. housing starts tumble](https://onlineworldnews.com/wp-content/uploads/2022/12/3.jpg) 4/EMERGING RATES A [set of emerging market central banks will mark the end to a year in which the scale and pace of rate hikes in developing economies hit](https://www.financedigest.com/uk-economy-set-for-smaller-hit-in-2023-than-previously-feared-imf.html "UK economy set for smaller hit in 2023 than previously feared – IMF") multi-year highs. In emerging Europe, where inflation pressures are still persistent, policy makers in Hungary and the Czech Republic are set to meet on Tuesday and Wednesday, both of which held [rates stable at the last meetings but pledged to tackle inflation](https://www.financedigest.com/german-inflation-rate-to-ease-over-course-of-2023-econ-minister.html "German inflation rate to ease over course of 2023 – econ minister"). Thursday has [meetings scheduled for Indonesia – where the central bank](https://www.financedigest.com/the-recent-bank-of-england-meeting-the-biggest-rate-hike-recession-warning-and-the-fallout.html "The recent Bank of England meeting, the biggest rate hike, recession warning and the fallout") has just seen growth added to its mandate – as well as Egypt, which is in line for support from the International Monetary Fund. Outlier Turkey is due to make a decision the same day, though watchers expect no change after rates were [lowered to single digits ahead of next year’s election despite rising inflation](https://www.financedigest.com/spains-inflation-to-be-lower-this-year-than-in-2022-minister.html "Spain’s inflation to be lower this year than in 2022 -minister"). GRAPHIC: Spot the bounce https://www.reuters.com/graphics/GLOBAL-MARKETS/jnpwyyazapw/chart.png ![Spot the bounce](https://onlineworldnews.com/wp-content/uploads/2022/12/4.jpg) 5/TOP TRADES 2023 Tis the season to be bullish about the year ahead, at least if you sell [stocks](https://www.financedigest.com/mutual-funds-vs-stocks-which-is-better.html "stocks") for a living. With recessions looming in the United States and Europe, however, money [managers expect another poor year for equities and are huddling around lower-risk trades](https://www.financedigest.com/managing-trade-credit-and-insurance-in-the-context-of-international-commerce-expansion.html "Managing trade credit and insurance in the context of international commerce expansion "). Investors surveyed by Deutsche [Bank predict](https://www.financedigest.com/2020-banking-predictions.html "2020 Banking Predictions") a 2.2% fall for the S&P 500 next year, citing a worse-than-expected recession. One trend many agree on is that inflation will subside, powering enthusiasm for U.S. Treasuries and investment grade corporate [credit following](https://www.financedigest.com/ubs-makes-changes-to-buyback-programme-following-credit-suisse-takeover.html "UBS makes changes to buyback programme following Credit Suisse takeover") a rout in 2022. [Expectations of a softer dollar](https://www.financedigest.com/dollar-set-for-weekly-loss-amid-expectations-fed-will-slow-hikes.html "Dollar set for weekly loss amid expectations Fed will slow hikes") as the U.S. economy slows have sparked optimism about emerging markets, which should also benefit from China easing [COVID-19 restrictions](https://www.financedigest.com/pandemic-restrictions-that-hampered-the-circulation-of-viruses-other-than-covid-19.html "Pandemic restrictions that hampered the circulation of viruses other than COVID-19"). Money managers are widely betting on the yen against the dollar, as speculation mounts that the [BoJ will move away from its ultra-dovish monetary policies](https://www.financedigest.com/yen-trims-gains-as-possible-next-boj-governor-says-current-policy-appropriate.html "Yen trims gains as possible next BOJ governor says current policy appropriate"). GRAPHIC: Emerging markets [interest rates](https://www.financedigest.com/ecbs-centeno-says-interest-rate-close-to-peaking-if-no-new-shocks.html "ECB’s Centeno says interest rate close to peaking if no new shocks") https://www.reuters.com/graphics/GLOBAL-MARKET/lbvggnegavq/EMCEN1.1.gif ![Emerging markets interest rates](https://onlineworldnews.com/wp-content/uploads/2022/12/5.gif) (Compiled by Karin Strohecker, Graphics by Sumanta Sen and Vincent Flasseur, editing by Barbara Lewis) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---