Global Markets:
- Asian stock markets: Nikkei up 0.05 %, Shanghai Composite fell 0.40 %, ASX 200 lost 0.25 %, Hang Seng closed
- Commodities: Gold at $1263 (-0.35 %), Silver at $17.45 (-0.55 %), WTI Oil at $50.40 (-0.40 %), Brent Oil at $51.20 (-0.30 %)
- Rates: US 10 year yield at 1.75, UK 10 year yield at 1.09, German 10 year yield at 0.00
News & Data:
- China House Prices (YoY) Sep: +4.30% (prev +9.20%)
- PBOC fixes yuan at 6.7558 (prev fix 6.7311, prev close 6.7457)
- EU's Tusk: UK PM May has confirmed A50 to be triggered by end of March of 2017, will be no formal negotiations until process starts
- BoJ's Kuroda: BoJ will look at appropriate yield curve at every policy meeting
- Kuroda: Some BoJ participants wanted a steeper yield curve
- Kuroda: BoJ could ease long-end buying if 10yr yields fall below target
- Markets are pricing in an 84% chance of a 25bps rate cut from RBNZ's November 9th meeting and 29bps of easing over the next 12M
- Asia stocks slip as stronger dollar weighs on crude oil prices
- U.S. judge picks monitor for Deutsche Bank over regulator's choice
- ECB leaves door open to more stimulus, points to December meeting
Markets Update:
The US Dollar strengthened overnight against most currencies, while the Euro came under broad pressure following the ECB press conference. The central bank kept all rates unchanged as expected by the market, but said that it won't end its quantitative easing program without tapering, signalling that it will run well beyond the currently scheduled end-date of March 2017. The ECB is basically waiting for the December meeting to make concrete decisions, as that is when the its staff will publish the updated economic forecasts.
EUR/USD, which briefly traded as high as 1.1040 during the Draghi press conference, fell back to 1.0920 in the late NY session and extended losses to 1.0895 in Asia. GBP/USD followed it lower and declined from 1.23 to 1.2230. Meanwhile, USD/JPY caught a bid and rallied to 104.20, supported by the broad USD strength and rising equity markets.
The commodity currencies came under pressure, with AUD/USD declining to 0.7618, confirming that it failed once again above 0.77 resistance. NZD/USD didn't manage to hold above 0.72 for too long either, and reached a low of 0.7170 in Asia.
Upcoming Events:
- 10:00 BST – Bundesbank President Weidmann speaks
- 13:30 BST – Canadian CPI
- 13:30 BST – Canadian Retail Sales
- 15:00 BST – Euro Zone Consumer Confidence
