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Thanks to an interview with Donald Trump, the Asian bourses avoided the fate of their U.S. counterparts. What’s up with that anyway?

  • Japan’s unemployment rate slips from 2.4% to 2.3% in September
  • Australia’s building approvals up by 3.3% vs. 8.1% decline in July

Major Events/Reports:

Trump sees “great” trade deal with China

In an interview a few hours earlier, we found out that Donald Trump sees a “great” trade deal with China even as he warns that the world’s second-largest economy might not be ready for one just yet.

The POTUS’ remarks were welcome to Asian market players who were just starting to price in headlines hinting that the U.S. might be ready to slap on another round of tariffs on China’s goods.

More news from China’s regulators

Looks like the government isn’t done reassuring markets just yet!

Earlier today China Securities Regulatory Commission (CSRC) pinky swore that it would help market liquidity, reduce unnecessary interference in trading, and create a level playing ground for investors.

In addition to that, CSRC will also encourage long-term capital into the markets. Specifically, it would encourage share buybacks and mergers & acquisitions by listed firms.

The announcement came at the heels of reports that China is considering halving the tax on car purchases to boost demand for autos.

Risk-taking in the markets

Trump’s optimism and fresh policy announcements from China’s government helped pull the Asian markets from a weak start.

Meanwhile, Nikkei got an extra boost from bargain hunters scooping up Japan’s cyclical stocks.

  • Nikkei is up by 1.29% to 21,421.6
  • A SX 200 is up by 1.60% to 5,749.3
  • Shanghai index is up by 0.72% to 2,560.382
  • Hang Seng is down by 0.17% to 24,769.8

Commodity prices reflected the risk-friendly vibe, with the safe-haven gold knocked a few points lower while crude oil benchmarks clocked in some gains.

  • Gold is down by 0.17% to $1,227.70 per troy ounce
  • Brent crude oil is up by 0.34% to $77.06 per barrel
  • U.S. WTI is up by 0.61% to $67.08 per barrel

Major Market Mover(s):

AUD and NZD

Commodity-related currencies (which tends to see more demand as China’s economy improves) shrugged off a weaker yuan peg by the PBoC to price in a recovery in China’s equities markets.

AUD/USD is up by 32 pips (+0.45%) to .7088; AUD/JPY is up by 56 pips (+0.70%) to 79.84; AUD/CHF is up by 33 pips (+0.47%) to .7102; AUD/CAD is up by 27 pips (+0.29%) to .9293; EUR/AUD is down by 57 pips (-0.35%) to 1.6058, and GBP/AUD is down by 55 pips (-0.30%) to 1.8072.

NZD/USD is up by 25 pips (+0.38%) to .6547; NZD/JPY is up by 48 pips (+0.65%) to 73.74; NZD/CHF is up by 27 pips (+0.42%) to .6560; EUR/NZD is down by 54 pips (-0.31%) to 1.7384, and GBP/NZD is down by 49 pips (-0.25%) to 1.9566.

JPY

Thanks to a recovery in risk appetite, the low-yielding yen had to give up some of its pips from the previous trading session.

USD/JPY is up by 29 pips (+0.25%) to 112.65; EUR/JPY is up by 42 pips (+0.33%) to 128.22; GBP/JPY is up by 54 pips (+0.37%) to 144.29, and CHF/JPY is up by 27 pips (+0.24%) to 112.41.

Watch Out For:

  • Germany’s preliminary CPI (0.1% expected, 0.4% previous)
  • 6:30 am GMT: France’s flash GDP (q/q) (0.4% expected, 0.2% previous)
  • 7:45 am GMT: France’s consumer spending (-0.4% expected, 0.8% previous)
  • 8:00 am GMT: Switzerland’s KOF economic barometer (100.8 expected, 102.2 previous)
  • 8:00 am GMT: Spain’s flash CPI (y/y) to remain at 2.3%?
  • 8:55 am GMT: Germany’s unemployment change (-12K expected, -23K previous)
  • 9:00 am GMT: Italy’s preliminary GDP (q/q) expected to maintain 0.2% growth
  • 10:00 am GMT: Euro Zone’s preliminary flash GDP (q/q) (0.4% expected, 0.3% previous)
  • 11:00 am GMT: U.K. CBI realized sales (27 expected, 23 previous)