Global Markets:
- Asian stock markets: Nikkei up 0.30 %, Shanghai Composite fell 0.55 %, Hang Seng rose 0.60 %, ASX 200 declined 0.05 %
- Commodities: Gold at $1256 (-0.10 %), Silver at $17.44 (-0.10 %), WTI Oil at $50.70 (+0.55 %), Brent Oil at $52.10 (+0.10 %)
- Rates: US 10 year yield at 1.77, UK 10 year yield at 1.02, German 10 year yield at 0.03
News & Data:
- Japan PPI (MoM) Sep: 0.0% (est. -0.10%, prev. -0.30%)
- Japan PPI (YoY) Sep: -3.2% (est. -3.20%, prev. -3.60%)
- Japan M2 Money Stock (YoY) Sep: 3.6% (est. 3.40%, prev. 3.30%)
- Japan M3 Money Stock (YoY) Sep: 3.1% (est. 2.90%, prev. 2.80%)
- China CPI (YoY) Sep: 1.9% (est. 1.60%, prev. 1.30%)
- China PPI (YoY) Sep: 0.1% (est. -0.30%, prev. -0.80%)
- PBOC set USD/CNY mid-point at 6.7157 (prev. close 6.7256, prev. fix 6.7296)
- RBA Financial Stability Review: Aussie banks are in good shape
- RBA say that housing price growth has slowed overall, banks have tightened lending standards
- Westpac holds call for AUDUSD at 0.68 by end of 2017, expects 3% GDP growth in 2016/7 and no RBA action in rest of 2016
- Fed's Kashkari: Fed is not forecasting a booming US economy; says he expects more sluggish US growth
- Asia stocks, dollar edge up on China inflation data relief – RTRS
- Fed may want to delay policy changes until after U.S. election: Harker – RTRS
- Oil prices edge up on tighter U.S. fuel market – RTRS
Markets Update:
The main event overnight was the release of Chinese inflation data, which arrived above expectations. The Yuan strengthened a bit, and the PBoC put today’s USD/CNY mid-point at 6.7157, down 100 pips from yesterday.
While the Asian stock markets are mixed, it was risk-on in FX as the US Dollar retraced slightly and the commodity currencies rallied. AUD/USD rallied from 0.7560 to 0.7610 in Asia and a daily close above 0.76 today would confirm the bottom at 0.7507 and signal that another test of 0.77 is possible in the near-term. NZD/USD rose from 0.7080 to 0.7130 in Asia, while USD/CAD fell from 1.3220 to 1.3185, before bouncing back to 1.32.
The Euro fell in Asia, as the topside was capped at 1.1060 resistance. While it managed to recover from the decline sub-1.10 yesterday, rallies remain rather weak. Same thing can be said for the Pound, which continues to struggle. It was rejected ahead of 1.2280 resistance yesterday and fell back below the big figure in Asia, reaching a low of 1.2195 so far.
Upcoming Events:
- 08:15 BST – Swiss PPI
- 10:00 BST – Italian CPI
- 10:00 BST – Euro Zone Trade Balance
- 13:30 BST – US Retail Sales
- 13:30 BST – US PPI
- 15:00 BST – US Michigan Consumer Sentiment
- 20:30 BST – CFTC Positioning Data
