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The Asian currencies played “Opposite Day” today as they reversed yesterday’s performance on a bout of risk-taking in the markets.

  • Japan’s flash manufacturing PMI improves from 52.5 to 53.1 in October

Major Events/Reports:

More stimulus from China

They’re not technically news (they were announced late Monday), so let’s just say that markets finally got around to pricing in recent efforts from the Chinese government to provide stimulus to small and micro businesses and the financial institutions involved with them.

For starters, the People’s Bank of China (PBOC) is planning to give 10 billion CNY to China Bond Insurance Co., which is expected to help support debt sales for private enterprises.

In addition, the central bank will increase its relending and rediscount quotas by another 150 billion CNY on top of the 150 billion CNY similar extensions we saw in June.

Meanwhile, the Securities Association of China (SAC) has reportedly announced that its members would set up a 100 billion CNY fund to lend to smaller listed companies looking to liquidate shares pledged as collateral.

Then, the China Securities Regulatory Commission (CSRC) relaxed its rules to finally allow funds from asset management packages to be used to make loans and buy stocks and bonds.

Risk-taking across the board

Remember the turnaround that we saw during the late U.S. session trading? Well, Asian session traders picked up on the risk-friendly vibe and extended the moves for the rest of the trading session.

If you recall, the good vibes might have started with optimistic remarks from voting Fed members and the prospect of more tax cuts in the U.S.

Whether it’s profit-taking from earlier selloffs or positive catalysts, the Asian bourses ended higher across the board:

  • Nikkei is up by 0.53% to 22,127.8
  • A SX 200 is steady at 5,825.4
  • Shanghai index is up by 1.53% to 2,634.497
  • Hang Seng is up by 0.86% to 25,565.7

Commodity bulls also came out to play, with gold taking advantage of a bit of dollar weakness while crude oil benchmarks went back to focusing on the upcoming sanctions for oil-producing Iran.

  • Gold is up by 0.03% to $1,231.03 per troy ounce
  • Brent crude oil is up by 0.72% to $76.70 per barrel
  • U.S. WTI is up by 0.76% to $66.56 per barrel

Major Market Mover(s):

AUD and NZD

A recovery in China’s equities translated to strong demand for the high-yielding Aussie and Kiwi.

For newbies out there, know that Australia and New Zealand’s economies depend a lot on China’s demand for their exports, so AUD and NZD’s moves tend to correlate with China-related updates.

AUD/USD is up by 19 pips (+0.27%) to .7103; AUD/JPY is up by 31 pips (+0.39%) to 79.97; AUD/CHF is up by 21 pips (+0.30%) to .7069; EUR/AUD is down by 40 pips (-0.24%) to 1.6147, and GBP/AUD is down by 44 pips (-0.24%) to 1.8279.

NZD/USD is up by 12 pips (+0.18%) to .6563; NZD/JPY is up by 23 pips (+0.31%) to 73.89; NZD/CHF is up by 15 pips (+0.23%) to .6532; EUR/NZD is down by 27 pips (-0.15%) to 1.7476, and GBP/NZD is down by 30 pips (-0.15%) to 1.9783.

JPY

The safe haven yen continued to take hits across the board on a burst of risk-taking in the markets.

USD/JPY is up by 14 pips (-0.13%) to 112.58; EUR/JPY is up by 15 pips (+0.12%) to 128.13; GBP/JPY is up by 20 pips (+0.13%) to 146.18; CHF/JPY is up by 11 pips (+0.09%) to 113.12, and CAD/JPY is up by 19 pips (+0.22%) to 86.12.

Watch Out For:

  • 7:15 am GMT: France’s flash manufacturing PMI (52.4 expected, 52.5 previous)
  • 7:15 am GMT: France’s flash manufacturing PMI (52.4 expected, 52.5 previous)
  • 7:15 am GMT: France’s flash manufacturing PMI (52.4 expected, 52.5 previous)
  • 7:30 am GMT: Germany’s flash services PMI (55. 5 expected, 55.9 previous)
  • 8:00 am GMT: Euro Zone’s flash manufacturing PMI (53.0 expected, 53.2 previous)
  • 8:00 am GMT: Euro Zone’s private loans (y/y) (3.2% expected, 3.1% previous)
  • 8:30 am GMT: U.K.’s High Street lending (39.0K expected, 39.4K previous)