- Bank of Japan expands asset buying and lending programme by JPY 11 trln. Keeps overnight call rate target unchanged at 0.01%
- Bank of Japan semi annual forecasts
- German October sa jobless total +20k, weaker than Reuter’s median forecast of +10k
- Euro zone October business climate indicator -1.62, weaker than Reuter’s median forecast of -1.40. Deteriorated from -1.34 in September
- Spanish prelim Q3 GDP -0.3% q/q, -1.6% y/y, marginally better than median forecasts -0.4%, -1.7% respectively
- Italian auction results
- Italy DMO head: Bond auction went very well, new 5 year bond placed well above market levels
- ECB’s Nowotny: Spain has time, Greece doesn’t - CNBC
- RBA’s Dep Gov Lowe: Inflation is consistent with bank’s target range
- More Lowe
- UK October CBI retail sales balance rises to +30, sharply up from +6 in September and demonstrably stronger than Reuter’s median forecast of +7
Bit of activity this morning, especially early, with USD/JPY enjoying a moment in the spotlight.
Sat at 79.90 just ahead of the Bank of Japan announcement (see above). Spiked to session high 80.16 (EBS) straight after the announcement followed by a quick plunge which quickly saw a session low 79.28 posted before steadying. We sit presently at 79.40.
Guess there’s two ways of looking at the above price action. One, it was a classic buy the rumour, sell the fact price action (the Japanese media had been flagging up a 10 trln package for sometime) or two, there was market disappointment as some greedy so and soes had been hoping for upwards of 20 trln. Personally I’d go with the former, but then that’s just me.
EUR/USD up at 1.2950. Inbetween we’ve been as low as 1.2886 and as high as 1.2960. The early sell-off was in conjuction with the plunge in the EUR/JPY cross. Reports had buy orders clustered down at 1.2880/90 (again) and we duly stopped and reversed down there. Asian central bank buying said to have been notable down at the lows.
Sell stops remain through 1.2875. Topside sell orders seen clustered 1.2980/00, “decent” 1.2990/00.
Cable marginally firmer at 1.6070 from early 1.6040.
