The US Real Estate Market is showing weakness. Bank of Japan aims to normalize monetary policy

In the US, housing construction exceeded expectations in November. Still, the number of permits, an indicator of future project activity, fell to an 18-month low, adding to fears of further activity decline.

European stocks fell on Tuesday due to rate-sensitive tech and industrial stocks after the Bank of Japan (BOJ) shocked global markets with a surprise policy change. While this was a minor policy adjustment, it was the first adjustment by the BOJ in a very long time. That’s why the market reaction has been substantial.

Gold and silver continue to rise amid a decline in US government bonds. Gold has an inverse correlation to the dollar index and government bonds, and that’s why the “yellow metal” was falling against a background of tighter monetary policy from the Fed. But now the Fed is getting closer to the end of the cycle, so more and more investors are moving into gold amid the approaching recession.

Oil prices ended higher Tuesday as a worsening forecast for a major storm in the US raised fears that millions of Americans could limit their travel plans during the New Year holiday. Oil prices were supported by a weaker dollar and a US oil restocking plan, but gains were limited by uncertainty over the rising number of COVID-19 cases in China.

TC Energy Corp. submitted its plan to US regulators to restart the Keystone pipeline nearly two weeks after the pipeline rupture that led to the largest oil spill in the United States in nine years.

Asian markets were mostly down yesterday. Japan’s Nikkei 225м(JP225) decreased by 2.46%, China’s FTSE China A50 (CHA50) lost 2.41%, Hong Kong’s Hang Seng (HK50) ended the day down by 1.33%, India’s NIFTY 50 (IND50) fell by 0.19%, and Australia’s S&P/ASX 200 (AU200) ended Tuesday down by 1.54%.

Tighter Bank of Japan policy will remove one of the last global anchors that helped keep borrowing costs low more broadly. Many economists now expect the Bank of Japan to raise interest rates next year, joining the Fed, ECB, and others after a decade of extraordinary stimulus.