<Five Things to Know Before Today's Market Opening_12/26 Bloomberg>
1) PBOC Freezes 1-Year MLF Rate for Third Consecutive Month
The People's Bank of China froze the 1-year medium-term lending facility (MLF) rate at 2% for the third consecutive month. It also recovered liquidity of 1.15 trillion yuan ($158 billion) through this policy tool, the largest amount since 2014. Earlier this month, policymakers pledged to shift monetary policy to "moderate easing" for the first time in about 14 years and promised "more proactive" fiscal measures to stimulate the economy. However, no concrete support measures have been announced yet as they are watching the situation regarding the anticipated tariff hikes by the Trump administration's second term.
2) BOJ Governor Repeats Existing Stance Without Mentioning January Rate Hike
Haruhiko Kuroda, governor of the Bank of Japan (BOJ), reiterated his existing stance on future monetary policy operations, saying he will continue to monitor the trends of the Trump administration's next term and the spring economic outlook. He said that "the timing and pace of adjusting the degree of monetary easing will vary depending on the future developments of economic activity, prices, and financial conditions," without hinting at any possibility of a rate hike in January. He added, "The BOJ is paying close attention to various risk factors both domestically and internationally, and it is necessary to examine how these factors will affect Japan's economic activity, price outlook, risks, and the likelihood of realizing the outlook."
3) Taiwan Antitrust Authority Halts Uber's Acquisition Plan for Food Delivery Company
Taiwan's antitrust authority has put a stop to Uber Technologies' plan to acquire Foodpanda, a food delivery service operating in Taiwan by Delivery Hero, for approximately $950 million. Chen Chih-min, chairman of the Taiwan Fair Trade Commission, explained the reason for not approving Uber's acquisition, saying "Uber Eats' main competitor is Foodpanda," and that "the merger would bring about much greater disadvantages due to competition restrictions than overall economic benefits." Uber aimed to complete the acquisition of Foodpanda by the first half of 2025. If completed, this acquisition would have been the largest in Taiwan outside the semiconductor industry and would also have meant Delivery Hero's withdrawal from the Asian market.
4) Russia Launches Large-Scale Attack on Ukraine's Energy Infrastructure
Russia has launched another large-scale missile attack on Ukraine's energy infrastructure. As a result, Ukrenergo, Ukraine's power transmission company, has restricted electricity supply to some areas. Separately, Russia announced that it had shot down 59 Ukrainian drones in various regions overnight. Ukrenergo said it had restricted electricity supply as a precautionary measure. German Galushchenko, Ukraine's energy minister, said the move was "necessary to minimize the impact on the energy system." The attack came at a time when Trump, the president-elect who proposed a ceasefire and urged Zelensky to "prepare for negotiations," is about to take office.
5) American Airlines Experiences Flight Disruptions Across the US
American Airlines experienced flight disruptions, including a brief suspension of all domestic flights on Christmas Eve. The company explained that the delays were due to technical issues with its operating system maintained by DXC Technology and that the problem was resolved after about an hour. It did not mention whether further delays would occur or what impact they might have. As of early afternoon on the 24th, American Airlines had canceled 19 flights, which is in line with the industry's average cancellation rate of 1%, but departure delays were unavoidable. About 37% of American Airlines flights departed on time as of the afternoon of the 24th.
(Source: Bloomberg News)
