Forex news for Asia trading on Monday 18 October 2021
- RBNZ measure of core inflation is 2.7% y/y (data delayed by tech gremlins)
- BoA on China GDP - see it lower again in Q4
- The RBNZ's own core inflation data has been delayed due to technical difficulties
- China September activity data: Industrial production 3.1% y/y (expected 4.5%)
- China Q3 GDP +0.2% q/q (expected +0.5%)
- PBOC sets USD/ CNY reference rate for today at 6.4300 (vs. estimate at 6.4295)
- Oil (WTI) futures up $1, and in China copper & coal higher while iron ore is lower
- Heads up for an RBA speaker due at 0300 GMT - Alexandra Heath
- Singapore data: Non-oil Domestic Exports (NODX) +1.2% m/m (prior -3.6%)
- UK Rightmove House Prices for October +1.8% m/m (prior 0.3%)
- Weekend - El-Erian watching for Fed-induced higher equity market volatility
- "Perfect storm" to keep US inflation at its highest in 30 years
- Goldman Sachs says PBOC won't cut the RRR this year - will take these 3 policy steps instead
- Surging NZ CPI will prompt an "even more aggressive hiking cycle" from the RBNZ
- AUD catching a tailwind bid alongside higher NZD (after NZ inflation report)
- NZD higher after the surging inflation report
- New Zealand Q3 CPI 2.2% q/q (vs. expected 1.4% q/q)
- New Zealand services PMI for September 46.9 (prior 35.6)
- New Zealand considering tightening restrictions in Auckland again - 'circuit breaker' lockdown
- Trade ideas thread - Monday 18 October 2021
- BoE Gov Bailey said despite inflation being temporary will act if a risk to medium-term inflation & expectations
- ICYMI - BOJ likely to cut growth, CPI forecasts
- Russia's Novak says ready to increase supply to Europe
- Australia's second-largest city to see an easing of coronavirus restrictions late this week
- ECB’s Knot says current inflation rise is mostly temporary
- PBOC Gov says default risks are a challenge, authorities monitoring "so they do not become systematic risks"
- Monday morning open levels - indicative forex prices - 18 October 2021
- ECB President Lagarde says (too) that the current rise in inflation is largely transitory
- The technical picture for the major currency pairs going into the new trading week
The early focus of the session was New Zealand inflation data. Official NZ CPI data comes out once a quarter and that for Q3 today was well above expectations, cementing another brick in the wall for further Reserve Bank of New Zealand rate hikes ahead. The NZD was marked higher on the data, topping for the session just above 0.7100 before reverting back to more or less unchanged over the following hours. The up and then down move for the NZD was played out similarly in AUD, EUR and GBP; US equity markets (globex index futures) also dropping back.
After the NZ data the wait was on for China's economic growth data for Q3 and 'Activity' indicators for September. Economic growth in the July - September quarter was disappointing, missing subdued estimates amidst the construction slowdown and energy controls. Also of impact of course were renewed coronavirus outbreaks and associated restrictions, severe weather events, supply chain congestion and the PBOC maintaining a relatively tight policy stance.
For the activity data, industrial production showed disappointingly slow growth. A key factor was a slump in steel output. The National Development and Reform Commission of the People's Republic of China (NDRC)had sought to slow steel output and have succeeded. September shopwed the weakest output since February of 2019 and production is now down around 30% over the past four months. The seasonally weak months of November and December are soon to come so a bounce does not appear imminent.
Major FX rates were little changed over the release of the Chinese data.
Oil traded higher on the session. BTC is higher awaiting the launch of futures ETFs: