Forex news for Asia trading Friday 28 October 2016

  • What's going on with gold - gold market largest quarterly surplus since Q4 2005?
  • US Q3 GDP (advance) due Friday, here's what Goldman Sachs are expecting
  • "BOJ loses bark and bite under humbled Kuroda"
  • Oil - The IMF on 'new normal' in the oil market, "Shale has been a game changer"
  • BOJ's Kuroda: Expect govt to take steps to raise growth rate
  • People’s Bank of China sets yuan reference rate at 6.7858 (vs. yesterday at 6.7736)
  • Good morning China - please come to Australia for your next holiday
  • Australia Q3 PPI: +0.3% q/q (prior +0.1%) and +0.5% y/y (prior +1.0%)
  • Australia new home sales data (September) +2.7% m/m (prior +6.1%)
  • BOJ's Kuroda - QE is not underwriting govt debt, not helicopter money
  • Japan finance minister Aso: Won't comment on FX moves
  • Japan headline inflation data (September): -0.5% y/y (expected -0.5%)
  • Japan (Sept data): Overall Household Spending -2.1% y/y (expected -2.7%) + jobs data
  • BOJ's Kuroda to appear in parliament again today, starting at 9am local
  • UK data - GfK consumer confidence (October): -3 (prior -1)
  • General Electric pursuing acquisition of oil-field services company Baker Hughes
  • NZD traders - dairy rally to continue, driven by tightening world supply says Rabobank
  • Overnight EUR, GBP moves - live footage
  • Australia press: ANZ to take $168m in charges on derivatives
  • Federal Reserve - BNP's "base case" is for a December rate hike
  • Trade ideas thread, Friday 28 October 2016

The final Friday of the month brought the regular mini data dump from Japan, CPI and household spending releases the highlights. If such disappointments can be thought of as highlights.

The inflation data was weak, but on the plus side maybe not as weak as expected. But, that's not saying much. The bullets, above, contain the data. Core inflation now shows deflation for 7 consecutive months, and also hit a 3-year low. Core-Core inflation (stripping out food and energy) came in flat, and missed very low expectations. You'll also find the "Overall Household Spending" data for September in the bullets above, this result was also very poor, but not as bad as the median consensus was expecting. 'Not as bad as expected' is hardly a great result, but at least its something.

The Bank of Japan meet on Monday and Tuesday next week, and you'd be excused for thinking that the poor data might prompt further action from the bank (you'd also be excused for thinking that doing more of the same is not really going to be very effective), but market expectations remain unchanged for no further easing at the meeting.

The Yen response to the data was barely a blip on the screen. USD/JPY is net down maybe 10 points on the session.

Action in other currencies was also limited, EUR & CHF are very little changed, but cable is up a few tics, 30+ points higher than session lows early on today.

AUD and NZD both have not done a huge amount, AUD/USD is net up a few points but NZD/USD has added 25 or so points from its overnight low in US time.

Gold is a few dollars in the green, and oil is slightly higher too.

The market awaits US Q3 GDP today.

Regional equities:

  • Nikkei +0.47%
  • Shanghai +0.03%
  • HK -0.44%
  • ASX +0.30%

Still to come:

  • At 0500GMT the Bank of Japan will release their own measure for inflation for September, a core measure excluding fresh food and energy. Expected +0.3%, prior 0.4%
  • BOJ Gov. Kuroda to appear in the Diet at 0555GMT
  • US Q3 GDP (advance) due Friday, here's what Goldman Sachs are expecting

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