Market Roundup
- Indonesia Q3 FDI growth decrease to 18.1 % vs prev 18.20 %
- Australia Q3 NAB survey – Businesses more upbeat, conditions index +6 pts to +11, confidence off 4 pts to zero.
- NewZealand Sept total job ads +2.1% m/m, newspapers +3.2%, internet +2.0%.
- Japan MoF flow data week-ended Oct 17 – Japanese buy net Y272.8 bln foreign stocks, Y491.5 bln bonds, sell Y70.9 bln bills; foreign investors sell net Y29.3 bln Japanese stocks, Y50.3 bln bonds, buy trln bills.
- BoJ Sept survey – Japan biz loan demand up, households down, Oct corporate fund demand index +7, July +2, April +1, Oct household index zero, July +7.
- Hyundai Capital sells Y24 bln 2-tranche samurais via MUFJ, Mizuho, Nomura.
- China SAFE – Banks sell less FX to clients in September – MNI.
- NZ Fonterra – Notified of Fitch ratings downgrades – Reuters.
- Widodo says Indonesia may relax foreign investment rules – Wall St Journal.
- Fitch – Downgrades Brazilian financial institutions following sovereign downgrade.
- Moody’S: China responds to challenges of economic rebalancing
- Moody’S:Slower economic growth,rising credit risk are symptoms of the challenge that China faces with structural rebalancing
- Indonesia Finance Min says maintains 2015 budget deficit below 2.5 pct despite expected shortfall in tax revenue
- Moody’S: Few Frontier markets will see credit quality improve greatly over next 2-3 years
- China FX regulator deputy head: normalisation of U.S. monetary policy good for china external demand
- China FX regulator deputy head says recent falls in FX reserves were within controllable range
Economic Data Ahead
- (0245 ET/0645 GMT) France Oct business climate index, 103.0 eyed; last 104.0.
- (0300 ET/0700 GMT) Spain Q3 unemployment, 22.15% eyed; last 22.37%.
- (0400 ET/0800 GMT) Italy Sep trade balance – non-EU; last bln surplus.
- (0430 ET/0830 GMT) UK Sep retail sales, +0.3% m/m, +4.8% y/y eyed; last +0.2%, +3.7%.
- (0430 ET/0830 GMT) UK Sep – ex-fuel, +0.3% m/m, +4.6% y/y eyed; last +0.1%, +3.5%.
- (0830 ET/1230 GMT) US Sep Chicago Fed national activity index; last -0.41.
- (0830 ET/1230 GMT) US w/e initial jobless claims, 265k eyed; last 255k.
- (0900 ET/1300 GMT) US Aug FHFA home price index; last +0.6% m/m, +5.8% y/y at 224.5.
- (1000 ET/1400 GMT) US Sep exist home sales, 5.38 mln AR, +1.4% m/m eyed; last 5.31, -4.8%.
- (1000 ET/1400 GMT) EZ Oct consumer confidence index – flash, -7.35 eyed; last -7.10.
- (1000 ET/1400 GMT) US Sep leading indicators index, unch eyed; last +0.1% m/m.
- (1100 ET/1500 GMT) US Oct KC Fed composite, manufacturing indices; last -8, +1.
Key Events Ahead
- N/A BoE DepGov Cunliffe speech at London BBA conference.
- N/A BoE Moulder speech at Liverpool conference.
- N/A Sweden SEK500 mln each 4% and 1% 2020 and 2025 government bond auctions.
- (0500 ET/0900 GMT)UK ChancExch Osborne parliamentary testimony on BoE bill.
- (0745 ET/1145 GMT) ECB policy announcement, most see no changes to rates, QQE.
- (0830 ET/1230 GMT) ECB Pres Draghi press conference (in Malta).
- N/A BoE Gracie speech at New York Risk Magazine annual meeting.
- N/A BoE DepGov Bailey speech at London Lord Mayor banquet.
- (0940 ET/1340 GMT) BoE Rule speech at Paris BdF/TSE conference.
- (1030 ET/1430 GMT) Ex-Fed Kohn in Washington, DC Brookings Institution panel discussion.
FX RecapAUD/USD: AUD reamins pressured by slumping oil prices and China market fears. The pair plunged overnight, pressured by a sharp decline in Chinese stocks and weaker commodity prices. The Aussie wallowed around one-week lows on Wednesday, has edged up but remained not far from the previous session’s low of $0.7200, its lowest level since Oct. 14. China’s benchmark indexes marked their worst daily performance in five weeks, while crude oil prices fell about 2 percent to three-week lows overnight after the U.S. government reported a bigger-than-expected stockpile buildup. AUD/USD bounce off recent range lows gathers pace, the pair is up 0.37% on day to 0.7235. AUD also up against other major currencies, AUD/JPY +0.3%; EUR/AUD down 0.3%. Solid NAB quarterly business survey a positive but did not play leading role. USD/JPY: The dollar was steady against the yen at 119.89 yen in early Asian trade. USD/JPY mostly traded rangebound, capped at 119.96 on the day. Pair is now back in hourly Ichi cloud and momentum looks bearish. USD/JPY is under pressure, with the rate now breaking a key support area at 119.75/80, following a slow grind lower. Heaviness in Yen crosses comes as the Nikkei 225 comes off recent day highs, currently trades down by 0.55%. EUR/JPY 136.05 to 135.83, GBP/JPY 184.70-185.06 range, AUD/JPY 86.33-77, NZD/JPY scoots up from 80.32 to 81.14 as AUD/NZD plunges. Option expiries help – 120.00 1.087 bln, 05-50 931 mln, 65-80 1.327 bln. EUR/USD: The euro struggled to break above its recent ranges ahead of the European Central Bank meeting later Thursday that could pave the way for an eventual extension of the bank’s quantitative easing steps. EUR complex is expected to remain muted ahead of ECB. The median probability of the ECB extending QE beyond its current September 2016 end date was 70 percent. EUR/USD was slightly higher on the day at 1.1342, holding above a 10-day low of 1.1306 touched on Monday but still shy of last week’s levels above 1.400. USD/CAD: The Canadian dollar steadies after slipping overnight on reduced BOC growth expectations. Weaker oil prices also weighed on the Canadian dollar. It dropped more than 1 percent against its U.S. counterpart after the Bank of Canada held its key rate steady as expected and also hinted that any hikes would be in the distant future, as it lowered its growth forecasts for both 2016 and 2017. The U.S. dollar was buying C$1.3137, steady from late North American trading after rising as high as C$1.3149, its loftiest peak since Oct 5. NZD/USD: The Kiwi outperforms in uneventful Asian Session. USD/NZD closed 0.6706 on Wednesday, topside bias within 0.6702/85 range thus far in Asia. Asain calendar has been very light and trading activity rather subdued, but the bird is recovering, despite the commodities failing to impress overnight. NZD/USD recoverd from 0.6840 lows and is currently trading at 0.6761 with scope for further gains on the day. Any corrective pullbacks should be contained by 0.6740, immedaite resistance is located at 0.7035 (200 DMA)Equity RecapThe stock markets across Asia retreated on Thursday following a depressing lead from Wall Street and due to lower commodity prices. The regional ETF iShares MSCI Pacific ex Japan lost 0.71%. Shanghai Composite dropped almost 1%, while Hang Seng shed about -0.92%.Japan’s Nikkei average was down 0.90%, range 18,424-18,579, KOSPI -1.04% and BSE Sensex just below par on the day.Treasury RecapNew Zealand government bonds rose, sending yields 3.5 basis points lower along the curve.Australian government bond futures bounced higher, with the three-year bond contract up 1 tick at 98.180. The 10-year contract added 4 ticks to 97.3550, while the 20-year contract was up 4.5 ticks to 96.8100.JGBs firmer on overnight gains in European, US bonds; range tight however. 10yr yield off 0.5bp at 0.31%; futures up 8 ticks at 148.45, range 148.41/46.Commodity RecapOil prices edged up in Asian trade on Thursday, gaining support from a weaker dollar to hold above a three-week low hit in the previous session after a bigger-than-expected build in U.S. crude stocks added to concerns of a global oil glut.Brent for December delivery rose 25 cents to $48.10 a barrel by 0434 GMT. U.S. crude for December delivery climbed 23 cents to $45.43 a barrel, having settled down $1.09, or 2.4 percent, in the previous session.Gold was trading near its lowest in over a week on Thursday, hurt by a stronger dollar and uncertainty over Fed hikes. Spot gold was steady at $1,166.10 an ounce by 0345 GMT.
The material has been provided by InstaForex Company – www.instaforex.com