A mixed start to the day, the effects of the U.S - China trade war evident in the Chinese numbers, while the U.S economy powers ahead.
Economic data released through the Asian session this morning was limited to 3rd quarter NZIER business confidence figures out of New Zealand. Outside of the stats, the RBA also delivered its October interest rate decision and rate statement.
For the Kiwi Dollar, business confidence took a turn for the worse for the 3rd quarter, with a net 28% of businesses expecting economic conditions to worsen, the lowest level since March 2009. According to the NZIER’s Quarter Survey of Business Opinion:
The Kiwi Dollar moved from $0.66169 to $0.66068 upon release of the numbers, before recovering to $0.6608 at the time of writing, down 0.12% for the session
For the Aussie Dollar, the RBA held rates unchanged at 1.5% as had been expected, with direction for the Aussie Dollar coming from the RBA’s rate statement. Salient points from the rate statement included:
The Aussie Dollar moved from $0.7228 to $0.72328 on the rate hold and release of the rate statement, easing back from an initial spike to a morning high $0.72379.
For the Japanese Yen, with no material stats released through the session, the closing out of the NAFTA deal eased demand for the Yen through the session, which was down by 0.04% to ¥113.97 against the Dollar at the time of writing.
In the equity markets, the Nikkei continued to find support from the Yen and news of the U.S and Canada finally agreeing on trade terms, the Nikkei up 0.27% at the time of writing, while the ASX200 continued its recent downward trend, weighed by the big-4 banks. For the Hang Seng it was catch up time, the HK markets having been closed on Monday, with a rally in crude oil prices and the NAFTA agreement failing to offset the negative sentiment towards the disappointing private sector PMI numbers out of China over the weekend to leave the Hang Seng down 1.64%.
For the EUR, economic data scheduled for release out of the Eurozone is limited to Spanish unemployment figures that are unlikely to have a material impact on the EUR, with focus remaining on Italy and chatter from the Oval Office on trade terms with the EU likely to come into focus, now that the U.S has wrapped up NAFTA.
At the time of writing, the EUR was down 0.07% to $1.1570, the Italian Budget and noise from the Oval Office expected to influence.
For the Pound, economic data is limited to September’s construction PMI that will provide some direction, the numbers skewed to the negative for the Pound and September house price figures that will likely be brushed aside by the markets. Outside of the stats, Brexit chatter and noise from the Tory Party conference will continue to be in focus ahead of Theresa May’s closing speech at the conference tomorrow.
At the time of writing, the Pound was down 0.05% to $1.3036 with Brexit chatter and noise from the Tory Party Conference the key drivers through the day.
Across the Pond, there are no material stats scheduled for release through the session, leaving the markets to consider the release of the Redbook data later this afternoon.
Outside of the stats, FED Chair Powell and FOMC member Quarles are scheduled to speak through the U.S session, FED Chair Powell having just recently demonstrated his ability to move the Dollar, with today’s topic relating to both inflation and employment likely to garner plenty of interest.
At the time of writing, the Dollar Spot Index was up 0.03% to 95.33, with the Oval Office also there to consider through the day.
For the Loonie, it’s another quiet day on the data front, with no material stats scheduled for release, leaving the Loonie in the hands of sentiment towards BoC monetary policy and direction of crude oil prices, the markets needing to consider the BoC’s next move, now that NAFTA has been wrapped up.
At the time of writing, the Loonie was up 0.08% to C$1.2804 against the U.S Dollar.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.