Global Markets:
- Asian stock markets: Nikkei up 6.70 %, Shanghai Composite gained 1.25 %, Hang Seng rose 2.00 %, ASX 200 rallied 3.35 %
- Commodities: Gold at $1285 (+0.90 %), Silver at $18.60 (+1.20 %), WTI Oil at $45.25 (-0.05 %), Brent Oil at $46.50 (+0.25 %)
- Rates: US 10 year yield at 2.04, UK 10 year yield at 1.26, German 10 year yield at 0.21
News & Data:
- Japan Machinery Orders (MoM) Sep: -3.3% (est. -0.80% prev. -2.20%)
- Japan Machinery Orders (YoY)Sep: 4.3% (est. 3.50% prev. 11.60%)
- UK RICS House Price Balance Oct: 23% (est. 19% prev. 17%)
- Australia Home Loans (MoM) Sep: 1.6% (est. -2.00% prev. -3.00%)
- RBNZ cuts rates 25 basis points, as expected
- RBNZ: A decline in the exchange rate is needed
- RBNZ sees inflation hitting 2% in Q4 2018 vs Q3 2018
- RBNZ: Monetary policy will continue to be accommodative
- RBNZ's Wheeler: One might say there is 20% probability of a further RBNZ rate cut
- RBNZ says new neutral rate is lower; open mind regarding FX intervention
- RBNZ's McDermott: Can cut rate more if needed, risks on rates still to the downside. NZD too high, looks at intervention at each meeting
- PBOC sets USD/CNY mid-point at 6.7885 (prev. fix 6.7832, prev. close 6.7777)
Markets Update:
Markets have stabilized yesterday, after a chaotic trading session during the election. Global equity markets recovered, and the S&P finished up on the day, after being down 5 % in the previous Asian session.
Asia picked up the positive sentiment, and the Nikkei rallied more than 6 %, while the Hang Seng and ASX gained more than 2 %.
In FX, the US Dollar weakened slightly overnight. EUR/USD made it from 1.0910 to 1.0955, while Cable bounced off 1.2395 and rose to 1.2440. Meanwhile, USD/JPY came under pressure after almost reaching 106 in New York, and declined to 104.95.
The commodity currencies benefited from the improvement in risk appetite, with the Australian Dollar rising to 0.7675 against the Dollar. The New Zealand Dollar however, declined after a RBNZ rate cut, accompanied by a dovish statement. The RBNZ said that a decline in the NZD is needed, and that it has been looking at intervention as an option. NZD/USD fell from 0.7360 to 0.7235 overnight.
Upcoming Events:
- 13:30 GMT – US Initial Jobless Claims
- 14:15 GMT – FOMC Member Bullard speaks
