Loads Of Economic Data In The Asian Session

There was a good deal of data in the Asian session starting with Chinese HSBC PMI data which surprisingly had little effect on the overall markets. The closely-watched HSBC’s China flash Purchasing Managers’ Index (PMI) inched up to 50.4 from a final reading of 50.2 in September, beating the consensus forecast for 50.3 and staying above the 50 mark which separates expansion from contraction.

The Australian dollar was little changed against the greenback on the news, and both the Shanghai Composite and Hang Seng indices remained in the red. Beijing has unleashed a burst of targeted stimulus for several months now, to prop up an economy struggling with a slowdown, especially in the property sector. Official data from the world’s second-largest economy earlier this week showed growth in the third-quarter falling to 7.3 percent, the slowest pace since the first quarter of 2009, when China’s growth rate slumped to 6.6 percent amid the depths of the global financial crisis.

Asian shares sagged on Thursday after a retreat on Wall Street and falling crude oil prices rekindled investor anxiety over slowing global growth, while a mixed picture on Chinese manufacturing failed to impress markets. Japan’s Nikkei share average fell 0.5 percent while MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.2 percent.

The Australian dollar eased by 22 points to reach 0.8757. The NAB business confidence report printed on a positive note. Business conditions rose slightly to 3 points, from 1 in the previous quarter, while expected business conditions in the next 12 months also edged higher, lifting to 25 from 24 in the prior quarter.

The kiwi dollar fell as low at 0.7863 after the release of inflation data. The New Zealand dollar fell about half a US cent after tepid local inflation figures pushed out the likely timeline for future interest rate hikes and cleared the way for a lower currency. Statistics New Zealand figures showed inflation was unchanged at 0.3 per cent in the three months ended September 30, slowing the annual pace to one per cent, just within the Reserve Bank’s target band of between one and three per cent, and below analyst expectations for a 1.3 per cent rise.

Remaining in Asia, the Japanese yen saw some lackluster data of its own after reports showed that the Bank of Japan missed meeting its stimulus goals last month. The USDJPY soared to trade at 107.32 adding on Wednesday and again this morning adding 17 points.  Having moved their attention to the T-bill market in Japan – after demand for the Bank of Japan’s cheap loans disappointed policymakers in an effort to ensure enough freshly printed money was flushed into Japanese markets, the BoJ now has a major problem. For the first time since QQE began, Bloomberg reports the BoJ failed to buy all the bonds they desired.

The US dollar surged to 85.91 adding 6 points this morning on the back of strong inflation numbers on Wednesday. The US dollar is expected to continue to rally today, weighing on the Asian currencies.