Asian session traders mostly stuck to the sidelines ahead of today’s much-awaited FOMC statement, though that didn’t stop Aussie traders from pricing in China’s positive trade data.
- Japan’s core machinery orders (y/y) plunges by 18.3% vs. 9.5% decline expected, 6.8% growth in August
- Japan’s current account surplus narrows down from 1.43T JPY to 1.33T JPY in September
- U.K. RICS house price balance drops to -10% vs. -2% expected and previous
- China’s trade surplus widens from 213B CNY to 234B CNY in October
- China’s trade surplus (USD-denominated) inches up from $31.7B to $34.0B in October
- Japan’s Economy Watchers sentiment improves from 48.6 to 49.5 in October
China’s trade numbers
Data from the world’s second-largest economy showed a wider trade surplus for the month of October.
The yuan-denominated trade surplus widened from 213B to 234B in October, which is slightly lower than the 237B figure that markets had expected.
Ditto for the dollar-denominated release, which clocked in at $34.01B against expectations of a $35.15B reading and September’s $31.7B surplus.
Exports registered another 15.6% increase for the month, as companies continue to “front load” their U.S. shipments ahead of the stiffer tariffs due at the beginning of next year.
Meanwhile, imports registered a whopping 21.4% jump from a year earlier. A closer look tells us that imports of copper, iron ore, soybeans, and natural gas were higher compared to a year ago but were smaller compared to September’s numbers.
Interestingly, China’s trade surplus with the U.S. narrowed down from a record high of $34.13 in September to $31.78 in October. Remember that October is the first full month after the U.S. implemented its latest tariffs.
Overall risk-friendly environment
Asian session traders took cues from its U.S. counterparts and pushed equity and commodity prices higher.
If you recall, traders were mostly relieved that there were no plot twists in the U.S. mid-term elections. What’s more, many believe that the results are unlikely to affect Trump’s tax cut plans and the Fed’s tightening schedule anyway.
- Nikkei is up by 1.96% to 22,517.7
- A SX 200 is up by 0.26% to 5,910.3
- Shanghai index is up by 0.61% to 2,657.418
- Hang Seng is up by 0.96% to 26,398.9
Commodity prices also reflected the risk-friendly vibe, with the safe-haven gold taking a step back as the dollar steadied while crude oil benchmarks inched higher.
- Gold is down by 0.20% to $1,223.89 per troy ounce
- Brent crude oil is up by 0.13% to $72.06 per barrel
- U.S. WTI is up by 0.26% to $61.73 per barrel
Major Market Mover(s):
AUD and NZD
Upside surprises in China’s trade data and a stronger yuan helped boost the Aussie higher across the board.
Meanwhile, Kiwi gained another pip or two against its lower-yielding counterparts as momentum spilled over from the previous trading session.
AUD/USD is up by 8 pips (+0.11%) to .7281; AUD/JPY is up by 23 pips (+0.27%) to 82.78; AUD/CHF is up by 9 pips (+0.12%) to .7299; AUD/CAD is up by 13 pips (+0.13%) to .9549; EUR/AUD is down by 7 pips (-0.04%) to 1.5695; GBP/AUD is down by 11 pips (-0.06%) to 1.8025, and AUD/NZD is up by 11 pips (+0.10%) to 1.0727.
NZD/USD is up by 4 pips (+0.06%) to .6788; NZD/CHF is up by 7 pips (+0.10%) to .6804, and NZD/JPY is up by 19 pips (+0.24%) to 77.17.
A bit of risk-taking dragged the yen lower against its major counterparts. Of course, it also didn’t help that a machine orders report from Japan clocked in its sharpest drop on record.
USD/JPY is up by 19 pips (+0.17%) to 113.69; EUR/JPY is up by 26 pips (+0.20%) to 128.93; GBP/JPY is up by 26 pips (+0.17%) to 149.22; CAD/JPY is up by 14 pips (+0.16%) to 86.69, and CHF/JPY is up by 20 pips (+0.17%) to 113.42.
Watch Out For:
- 6:45 am GMT: Switzerland’s unemployment rate to remain at 2.5%?
- 7:00 am GMT: Germany’s trade balance (18.2B EUR expected, 18.3B EUR previous)
- 7:45 am GMT: France’s trade balance (-6.1B EUR expected, -5.6B EUR previous)
- 9:00 am GMT: ECB’s economic bulletin
- 10:00 am GMT: EU economic forecasts