Asia Summary and Highlights 29 Oct
Australian Q3 CPI (all groups) +3.2% y/y
U.S. Treasury Secretary Bessent posted on X praising Japan’s commitment to Bank of Japan independence and “policy space”
Asia Session
The Australian Q3 CPI has come in higher than expected at 3.2% y/y with trimmed mean CPI at 3% y/y. It is a strong number and has erased market participants expectation of a November cut from the RBA. The latest rhetoric from RBA governor Bullock has also turned hawkish and thus the next rate cut could be push towards Q1 2026. The AUD/USD is trading strongly at 0.6600 after a knee-jerk spike to 0.6607 on release. NZD/USD is only trading 0.02% higher while USD/CAD slips 0.02%.
U.S. Treasury Secretary Bessent posted on X praising Japan’s commitment to Bank of Japan independence and “policy space”. He also mentioned about the evolution of "Abenomics", all seems to be a kind of verbal prompt for stronger JPY. Japan Chief Cabinet Secretary Kihara did not give a response when asked about Bessent's remark. USD/JPY is trading 0.23% higher at 152.44 as the knee-jerk move fades. Else, EUR/USD is down 0.18% and GBP/USD is down 0.27%.
North American session
In a subdued session EUR/USD was stable near 1.1660 while USD/JPY was never very far from 152. Gains in EUR/GBP stabilized near .8780. The main action came from gains in the commodity currencies, AUD/USD rising to .6590 from .6560 and USD/CAD slipping to 1.3950 from 1.40.
US data saw August house price data from FHFA and S&P Case-Shiller picking up on the month on a seasonally adjusted basis though yr/yr growth continued to slow. October consumer confidence slipped to 94,6 from 95.6, but September was revised up from 94.2.