Asian stock markets: Nikkei up 0.60 %, Shanghai Composite gained 0.45 %, Hang Seng fell 0.05 %, ASX 200 lost 0.30 %
Commodities: Gold at $1271 (+0.10 %), Silver at $17.65 (+0.05 %), WTI Oil at $49.75 (+0.05 %), Brent Oil at $50.50 (+0.25 %)
Rates: US 10 year yield at 1.85, UK 10 year yield at 1.25, German 10 year yield at 0.17
News & Data:
Japan National CPI (YoY) Sep: -0.50% (est -0.50%, prev -0.50%)
Japan National CPI Ex-Fresh Food, Energy (YoY) Sep: 0.0% (est 0.10%, prev 0.20%)
Japan Tokyo CPI (YoY) Oct: 0.10% (est -0.40%, prev -0.50%)
Japan Tokyo CPI Ex-Fresh Food, Energy (YoY) Oct: 0.10% (est -0.10%, prev -0.10%)
Japan Unemployment Rate Sep: 3.00% (est 3.10%, prev 3.10%)
Japan Household Spending (MoM) Sep: 2.80% (prev -3.70%)
Australia PPI (QoQ) Q3: 0.30% (prev 0.10%)
Australia PPI (YoY) Q3: 0.50% (prev 1.00%)
UK GfK Consumer Confidence (Oct): -3 (est -3, prev -1)
People’s Bank of China sets yuan reference rate at 6.7858 (vs. yesterday at 6.7736)
Dollar stands tall against yen ahead of U.S. GDP data – RTRS
Dollar, bond yields rise on enhanced Fed rate hike prospects – RTRS
USD/JPY broke above 105.00 yesterday, and while it failed to extend gains overnight, it remained bid and traded within a 105.10-30 range. Japanese inflation numbers were mostly in line with expectations and did not have much of an impact on markets. The Nikkei is currently up more than 0.50 % on the day.
The broad USD strength put the Euro and Pound under renewed pressure. EUR/USD once again failed ahead of the 1.0950 resistance level and eventually fell to 1.0890 in the late NY session. In Asia, it was able to bounce back to 1.0905, but the outlook remains mixed. Another rejection off 1.0950 would suggest that a test of the recent low at 1.0850 seems more likely.
GBP/USD declined from 1.2270 to 1.2150 yesterday, and traded in a 1.2150-80 range overnight. The commodity currencies were not doing much better, with AUD/USD declining to 0.7580 following another failure at 0.77 on Wednesday. NZD/USD fell from 0.7165 to 0.7110 yesterday, and consolidated between 0.7120-35 in Asia.
The focus today will be on US GDP data, which could determine the direction of the US Dollar in the near-term. The market is expecting that quarter-on-quarter number arrives at 2.5 % vs. 1.4 % previously. Also, keep in mind that the US will release its latest employment numbers next week, with NFP expected at 170k vs. 156k previous.