Asia Summary and Highlights 10 October
PBOC to establish securities, funds to aid capital market stability
Japan September PPI 0.0% m/m (expected -0.3%) and +2.8% y/y (expected +2.3%)
The Australian consumer inflation expectation slipped to 4% from 4.4%
Asia Session
The Japan September PPI has come in higher at 0.0% m/m and +2.8% y/y. It would be a positive sign for the BoJ as they are looking for stronger trend inflation. On Thursday's Asia session, U.S. Treasury Yields have so far retreated more than JGB yields. USD/JPY is trading 0.03% lower at 149.25.
The Australian consumer inflation expectation slipped to 4% from 4.4% in October. It confirms our forecast to see gradual moderation for Australia inflation for the rest of 2024. Regional sentiment is vibrant on Thursday as market participants cheers on more stimulus expectation from the Chinese government. PBoC announced they will be establishing securities, funds to aid capital market stability, indirectly increasing liquidity in the market. The HSI is up 4% and Chinese equity indexes are up almost 3%. AUD/USD rose 0.19% to 0.6731, NZD/USD is up 0.36% to 0.6086 while USD/CAD slipped 0.02%. Else, EUR/USD and GBP/USD are up 0.04%.
North American session
Early trade in the absence of significant data saw the USD supported by comments from Fed’s Logan, who advocated a more gradual easing path, though this was seen largely on USD/JPY, which moved above 149. EUR/USD fell only marginally below 1.0950 while USD/CAD rose to near 1.37.
FOMC minutes from September 18 generated little response from the markets. A substantial majority favored the 50bps easing that was delivered though some would have preferred a 25bps move and a few others indicated they could support such a decision. USD/JPY stabilized near 149.30 and EUR/USD stabilized near 1.0940. USD/CAD extended gains above 1.37. GBP and AUD were quiet..