Global Markets:
- Asian stock markets: Nikkei up 0.05 %, Shanghai Composite gained 0.35 %, Hang Seng rose 1.25 %, ASX 200 lost 0.60 %
- Commodities: Gold at $1277 (+0.35 %), Silver at $17.89 (+0.50 %), WTI Oil at $47.00 (+0.25 %), Brent Oil at $48.90 (+0.60 %)
- Rates: US 10-year yield at 1.85, UK 10-year yield at 1.25, German 10-year yield at 0.16
News & Data:
- China NBS Manufacturing PMI Oct: 51.2 (est 50.4, prev 50.4)
- China NBS Non-Manufacturing PMI Oct: 54.0 (prev 53.7)
- China Caixin Manufacturing PMI Oct: 51.2 (est 50.2, prev 50.1)
- Japan Nikkei Manufacturing PMI Oct F: 51.4 (prev 51.7)
- Australia AIG Manufacturing Index Oct: 50.9 (prev 49.8)
- Australia ANZ/RM Weekly Consumer Confidence (30/Oct): 114.1 (prev 113.6)
- New Zealand QV House Prices YoY (Oct): 12.7% (prev 14.3%)
- South Korea Trade Balance (USD) Oct: 7.161bn (est 7.235bn, prev rev 6.901bn)
- South Korea Exports (YoY) Oct: -3.2% (est -3.10%, prev -5.90%)
- South Korea Imports (YoY) Oct: -5.4% (est -4.40%, prev -1.70%)
- PBOC fixes yuan at 6.7734 (prev fix 6.7641, prev close 6.7782)
Bank of Japan Rate Decision:
- Bank of Japan keeps monetary policy steady
- Maintains short-term interest rate target at -0.1 %
- Maintains 10-year JBG yield target around zero %
- To buy JGBs more or less at current pace so holdings increase at annual pace of around 80 trillion yen
- BOJ says if confidence in fiscal stability declines, economy may deviate downward from baseline scenario
- Inflation likely to increase towards 2 % in second half of 3-year projection period ending in fiscal 2018
RBA Rate Decision:
- RBA keeps rates unchanged
- Says global economy continues to grow, at below average pace
- Says judged unchanged policy consistent with growth, inflation targets
- China growth has been steadied recently
- Commodity prices have risen over recent months, lifted terms of trade
- Australian economy growing at moderate rate
- Labour market indicators somewhat mixed
- Says some housing prices rising briskly
- Inflation expected to remain low for some time
Markets Update:
The focus overnight was on the two central bank rate decisions – the BoJ and RBA. Both kept their monetary policy unchanged, as expected, and the impact on markets was therefore modest. USD/JPY rose from 104.70 to 104.95 and is currently consolidating around 104.80 as traders are waiting for the BoJ press conference. However, there are unlikely to be any surprises there either. Meanwhile, the Australian Dollar rallied after the RBA decision. The market was already expecting that the RBA will keep rates unchanged, but the statement was slightly less dovish, which helped the AUD/USD to rise to 0.7660.
EUR/USD was quiet as usual and traded within a 1.0960-80 range. GBP/USD ran again into decent resistance ahead of 1.2250, and consolidated in Asia after it wasn't able to break the level. Cable fell to 1.2210 ahead of the Tokyo open, but bounced from there and made it back to 1.2255.
Upcoming Events:
- 09:30 GMT – UK Manufacturing PMI
- 12:30 GMT – Canadian GDP
- 14:00 GMT – US ISM Non-Manufacturing PMI
- 16:00 GMT – Bank of Canada Governor Poloz speaks
- 16:30 GMT – SNB Chairman Jordan speaks
- 21:45 GMT – New Zealand Employment Change
- 21:45 GMT – New Zealand Unemployment Rate
