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Risk appetite was the name of the game, as Asian session traders caught up to their U.S. counterparts and priced in more rate hikes from the U.S.

  • U.K. GfK consumer confidence slips from -7 to -9 in September
  • Tokyo’s core CPI (y/y) up from 0.9% to 1.0% in September
  • Japan’s unemployment rate dips from 2.5% to 2.4% in August
  • Japan’s unemployment rate dips from 2.5% to 2.4% in August
  • Japan’s retail sales (y/y) higher at 2.7% vs. 2.2% expected, 1.5% previous
  • Japan’s housing starts (y/y) up by 1.6% vs. 0.4% expected, -0.7% previous
  • AU private sector credit grows by 0.5% vs. 0.4% expected and previous

Major Events/Reports:

Japan’s data dump

Retail activity in the world’s third-largest economy accelerated by 2.7% from a year earlier in August, which marks the fastest expansion in eight months.

Industrial production also grew, as it rose by another 0.7% after a 0.2% dip last month. Meanwhile, the unemployment rate edged lower from 2.5% to 2.4% while maintaining a jobs-to-applicant ratio of 1.63.

Last but not the least is the BOJ printing its Summary of Opinions, which further highlighted the members’ concerns over keeping its monetary easing more sustainable.

The reports barely made dents on the yen’s price action, however, as traders focused on the overall risk sentiment in the markets.

Overall risk appetite

Japan might have printed a bunch of reports earlier today, but it was themes from the previous session that ruled price action during the session.

Specifically, traders are feeling optimistic that the Fed is still on a tightening track. Not only that, but Governor Powell also recently shared his (lack of) worry that the U.S. will see a recession “in the next year or two.”

The dollar’s strength and M&A moves boosted Nikkei to its 27-year high, while China’s markets also shot higher ahead of a week-long holiday.

  • Nikkei is up by 1.21% to 24,085.3
  • A SX 200 is down by 0.10% to 6,195.5
  • Shanghai index is up by 0.93% to 2,817.727
  • Hang Seng is up by 0.62% to 27,886.8

Commodity prices were also bullish, with gold seeing some bargain-hunting after being dragged lower by dollar strength. Meanwhile, oil prices continued to receive support from Iran’s looming sanctions.

  • Gold is up by 0.12% to $1,184.50
  • Brent crude oil is up by 0.17% to $81.42
  • U.S. WTI is up by 0.08% to $72.23

Major Market Mover(s):

JPY

Yen traders shrugged off a stronger local equities market and M&A news and dumped the safe-haven anyway in favor of its higher-yielding counterparts.

USD/JPY is up by 14 pips (+0.12%) to 113.50; EUR/JPY is up by 20 pips (+0.15%) to 132.17; GBP/JPY is up by 23 pips (+0.15%) to 148.49; CAD/JPY is up by 20 pips (+0.23%) to 97.13; NZD/JPY is up by 8 pips (+0.11%) to 75.01, and CHF/JPY is up by 22 pips (+0.19%) to 116.23.

AUD

The high-yielding Aussie soaked up most of the risk-friendly vibes and was pushed higher across the board.

AUD/USD is up by 8 pips (+0.11%) to .7214; AUD/JPY is up by 17 pips (+0.21%) to 81.87; AUD/NZD is up by 22 pips (+0.20%), and GBP/AUD is down by 8 pips (+0.04%) to 1.8136.

CAD

The Loonie continued to gain support from the Canadian officials’ optimism that a NAFTA deal can still be reached. Of course, it also didn’t hurt that improved risk sentiment pushed oil and comdoll prices higher.

USD/CAD is down by 16 pips (-0.12%) to 1.3026; EUR/CAD is down by 11 pips (-0.07%) to 1.5169, and GBP/CAD is down by 12 pips (-0.07%) to 1.7041.

Watch Out For:

  • 6:45 am GMT: France’s consumer spending (0.3% expected, 0.1% previous)
  • 6:45 am GMT: France’s preliminary CPI (-0.1% expected, 0.5% previous)
  • 7:00 am GMT: Switzerland’s KOF economic barometer (100.1 expected, 100.3 previous)
  • 7:55 am GMT: Germany’s unemployment change (-9K expected, -8K previous)
  • 8:00 am GMT: Spain’s flash CPI (y/y) to remain at 2.2%?
  • 8:30 am GMT: U.K.’s current account (-19.4B GBP expected, -17.7B GBP previous)
  • 8:30 am GMT: No changes expected from U.K.’s GDP reading of 0.4%
  • 8:30 am GMT: U.K.’s revised business investment (q/q) (0.5% expected and previous)
  • 9:00 am GMT: Euro Zone CPI flash estimate (y/y) (1.1% expected, 1.0% previous)
  • 9:00 am GMT: Italy’s preliminary CPI (-0.2% expected, 0.4% previous)