The US House of Representatives passed a stopgap funding bill to avert a US government shutdown that’ll now proceed to the Senate, where it is also likely to pass. The Bill contains no spending cuts and sailed easily through the chamber winning 336 to 95:

  • 209 Democrats voted for the bill
  • 27 Republicans voted for it

Otherwise news flow was light during the session but there were data releases from Japan, Australia and China to consider. The People’s Bank of China weighed in also.

Japan’s preliminary Q3 GDP data showed a contraction, the first in three quarters:

  • the economy shrank an annualised real 2.1% y/y and 0.5% in Q3
  • inventory subtracted 0.3%, domestic capital expenditure contracted 0.6%, private consumption was flat
  • Of note from the data was a massive surge for the Deflator, an inflation indicator, to 5.1% y/y.

Australian Q3 wages data followed, coming in line with market expectations but nevertheless at a 26 year high. The strong growth is not too far away from what the Reserve Bank of Australia was expecting, and as they forecast more subdued growth ahead as the economy weakens the data is not expected to put a scare into the RBA ahead of the December policy meeting (widely expected to be an on hold decision at this stage).

China’s central bank boosted liquidity injections via its Medium-term Lending Facility (MLF) today. The rate was unchanged at 2.5%. An unchanged rate was the unanimous expectation. The Bank made 1450 billion yuan worth of fresh MLF loans, more than offsetting the 850bn maturing. The net 600 billion yuan fresh fund injection into the banking system is the largest since December 2016. This will further help support stimulus spending.

China’s economic activity data showed pick-ups for consumer spending (retail sales) and industrial output while investment growth slowed in the face of the severe and ongoing property debt crisis.

USD/JPY popped a little higher on the session, partially retracing its huge drop post-US CPI on Tuesday.

Other FX was a little more range bound.

USD/CNH fell away after the Chinese data.

usdcnh 15 November 2023 wrap chart