European Highlights 18 October 2016
Asia FX and News -
+ China Vice-Premier Wang says nation's foreign trade still faces relatively big" downward pressure - Xinhua.
+ Japan FinMin Aso said excessive movements and disorder in currency markets created negative effects.
+ RBA Gov Lowe: strengthening demand, lower unemployment and signs of stronger wage growth suggest CPI will return to target.
+ RBA Minutes: prospects for maintaining growth to stimulate job creation and eventually higher wages and inflation are "reasonable'.
+ NZD Q3 CPI +0.2% q/q vs expectation for unchanged.
+ NZDUSD got an early lift from the CPI data to cast doubts over a further rate cut, the AUD then playing catch up on upbeat RBA minutes and the comments from Lowe, the upshot both AUD and NZD up against the USD and AUD/NZD eventually little changed over the session. Tight ranges again for EUR/USD and USD/JPY, while GBP continued to squeeze the shorts up to 1.2272 before settling back.
Nikkei and JGBs -
+ N225 closed +0.38% at 16963.61. 10y JGB yield -0.055%.
European FX and News -
+ Another generally quiet session in Europe, GBP seeing some excitement as CPI came in at the top end of expectation, though the spike that came close to matching the Asia top soon turned around as few see any chance of UK rates going up any time soon and the short position had already seen some lightening up overnight. Another bounce then followed as the UK Attorney general said that Brexit 'very likely' needs ratification by MPs, pushing the Cable high to 1.2298.
+ EUR/USD has been on the 1.10 handle throughout the morning but restrained on the top side to 1.1025 with no data to watch before the offerings from the US later. USD/JPY has also been sticking close to 104.00, the slightly softer overall USD tone balanced against better equities.
+ On the commodity currencies the CAD has played some catch up with AUD and NZD, USD/CAD down briefly below 1.3160 helped by a modest crude rally, though the southern hemisphere pair of AUD and NZD still preferred after the strong showing in Asia.
+ Quiet again on the Scandies, NOK slightly ahead with Brent higher and EUR/SEK still reluctant to push below 9.70. EUR/CHF is clear of the lows seen either side of the weekend but still no threat to 1.0900.
Bonds and Equities -
+ Bonds seeing some risk-on signals with peripheral spreads tightening to Bunds and the latter marginally higher across the curve. The Gilt curve is bear flattening with the front end underperforming. Equities are generally up around 1%.
+ New Zealand: CPI (Q3) 0.2% q/q (Mkt: 0.1 Prev: 0.4)
+ Australia: New motor vehicle sales (Sep) 2.5% m/m (Prev: 0.0R)
+ UK: CPI rose by 0.2%m/m in September (prev: 0.3%m/m), pushing the y/y rate to a 23-month high of 1.0%y/y (prev: 0.6y/y) which is marginally stronger than market expectations of 0.9%y/y (4cast: 1.0%y/y).
Still To Be Released -
23:01 GMT - UK: Rightmove House Price Index (Oct) 4cast: 4.2 (A)% y/y (Prev: 4)
00:30 GMT - AU: New motor vehicle sales (Sep) 4cast: 2.5 (A)% m/m (Prev: 0.1)
08:30 GMT - UK: CPI (Sep) 4cast: .2 (A)% m/m (Mkt: 0.1 Prev: 0.3)
08:30 GMT - UK: CPI (Sep) 4cast: 1.0 (A)% y/y (Mkt: 0.9 Prev: 0.6)
08:30 GMT - UK: Input Prices (unadj.) (Sep) 4cast: .0 (A)% m/m (Mkt: 0.4 Prev: 0.2)
08:30 GMT - UK: Input Prices (unadj.) (Sep) 4cast: 7.2 (A)% y/y (Mkt: 7.4 Prev: 7.8)
08:30 GMT - UK: ONS House Prices (Aug) 4cast: 8.4 (A)% y/y (Mkt: 7.8 Prev: 8)
08:30 GMT - UK: Output Prices (unadj.) (Sep) 4cast: .2 (A)% m/m (Mkt: 0.2 Prev: 0.1)
08:30 GMT - UK: Output Prices (unadj.) (Sep) 4cast: 1.2 (A)% y/y (Mkt: 1.1 Prev: 0.9)
08:30 GMT - UK: Output Prices Core (unadj.) (Sep) 4cast: .1 (A)% m/m (Mkt: 0.2 Prev: 0.1)
12:30 GMT - CA: Manufacturing sales (Aug) 4cast: 1.5% m/m (Mkt: 0.3 Prev: 0.1)
12:30 GMT - US: CPI (Sep) 4cast: 0.3% m/m (Mkt: 0.3 Prev: 0.2)
12:30 GMT - US: CPI (ex Food & Energy) (Sep) 4cast: 0.2% m/m (Mkt: 0.2 Prev: 0.3)
14:00 GMT - US: NAHB Builders survey (Oct) 4cast: 63 (Mkt: 63 Prev: 65)
20:00 GMT - US: Net Long-term TICS Flows (Aug) USD bn (Prev: 103.9)
23:30 GMT - AU: Westpac-MI Leading Index (Sep) % m/m (Prev: 0)
Events & Auctions:
12:00 GMT - EU: Europan Parliament's Guy Verhofstadt speaks at conference in Brussels
12:00 GMT - NZ: GDT Dairy Auction
13:00 GMT - EU: EU's Timmermans Speaks in Luxembourg
21:00 GMT - AU: RBA's Lowe Speaks in Sydney