Putting aside an amazing game notwithstanding the botched call near the end, we learned again that there is nothing transitory about the inflation in professional sports, especially football. Just look at the wage pressures there (wow) but let’s look at the cost of a Super Bowl commercial. The $7mm price per 30 second commercial was up 7.7% from the game in 2022 which itself was higher by 16% from 2021. The Covid game in February 2021 saw no change from the year before that but was still up by 7.7% from the game in February 2019. There was a bit of deflation/disinflation in the games in 2018 and 2019 but followed a 12.5% rise in February 2017 and steady increases in the years prior. //www.superbowl-ads.com/cost-of-super-bowl-advertising-breakdown-by-year/.
The commercials were good not great I believe. Some I liked were the Ben Affleck/JLo Dunkin Donuts’, Breaking Bad, Google Pixel, and was good to see Alicia Silverstone back reprising her classic role.
I read some more over the weekend on the likely next BoJ governor Kazuo Ueda and he definitely has a easy money bent. In the weekend FT, a former head of monetary policy at the BoJ said this, “Mr. Ueda was the most dovish member when he served on the BoJ board” between 1998 and 2005. “He is a committed deflation fighter and he is unlikely to take a sudden hawkish decision that would shock markets.” On the other hand, back in July Ueda was interviewed by Nikkei news and while he cautioned against premature tightening, he also said “There is a need for the BoJ to prepare an exit strategy.”
Well, it certainly is the time for an exit strategy considering the trend and levels of inflation and Kuroda started the process modestly with the YCC widening. The only question now seems the pace of further exiting but I want to emphasize again that how this goes this year will have a major influence on the world’s bond markets I believe. The yen is weakening sharply today, by 1% and is matching the lowest level vs the US dollar since early January at 132.7, though up a lot from the lows of 150, on the belief any exit will go slowly. The JGB market traded strangely as the 10 yr yield closed up by 1 bp to .51%, above the YCC limit but the 40 yr yield was down by 10 bps.