Forex news for Asia trading on Wednesday 27 October 2021
- Preview - Bank of Canada monetary policy meeting Wednesday 27 October 2021
- Dutch crypto exchange Crypto Meester will cease trading Tether on its platform
- China Railways has halted China-Europe trains for the first time
- China Industrial Profits for September +16.3% y/y (prior +10.1%)
- PBOC sets USD/ CNY mid-point today at 6.3856 (vs. estimate at 6.3862)
- Australian dollar popped on the higher than expected core inflation data from Australia
- Australian Q3 inflation: Headline 0.8% q/q (vs. expected 0.8%)
- New Zealand ANZ business survey for October, business confidence drops
- Central bank meetings this week - the ECB's the most significant
- UK data - BRC Shop Price Index for October -0.4% y/y (prior -0.5%)
- Goldman Sachs update their EUR/USD forecasts
- ICYMI - Goldman Sachs CEO sees risk of higher global inflation & slower growth
- New Zealand trade balance data for September, exports & imports both up m/m
- Saudi Aramco warns that spare oil production capacity is shrinking, a "huge concern"
- Twitter stock market pump and dump scheme - US man arrested
- Canada coronavirus - British Columbia to offer booster shots to all double dosed
- Trade ideas thread - Wednesday 27 October 2021
- Private oil survey data shows headline build in crude oil inventory
- Australia coronavirus restrictions being dismantled - flying overseas given the go ahead today
- S&P and NASDAQ close higher for the second consecutive day
The focus for the session was the Australian inflation data release. Official inflation data in Australia is published only four times a year and today we got the CPI for the July - September quarter:
- headline came in as expected,
- however the core CPI measures (underlying inflation) came in hotter, above expectations and into the RBA target band for the first time since 2016 (see bullets above).
The market response was swift, with Australia's three-year bond yield rising to its highest since January 2020 and the Australian dollar marked higher. AUD/USD traded briefly to circa 0.7535 and has since tracked a small retracement and sideways. The core inflation result has added kindling to a slow-burn expectation that the RBA will hike its cash rate well before its oft-repeated forecast not to do prior to 2024 at the earliest. Interest rate markets are now pricing a hike in around 12 months or so with more to follow.
Other data released today showed a record trade deficit for New Zealand and improving industrial firm profits in China. ANZ in New Zealand also published their October Business Survey results, making a 'key point' that inflation pressures in the country are soaring (see bullets above).
In China today coal got slammed lower again. Commodity futures in China pretty much across the board are softer.
Apart from AUD, FX rates were fairly subdued. EUR and GBP are up slightly against the USD while the dollar is up just a little against the yen and CAD. After its drop overnight and 50%-odd retrace, gold slipped down a few dollars during the session here. Its still above its US-time lows though. BTC/USD is down on the session here also.
AUD marked higher upon the CPI data release: