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Traders were cautiously optimistic during the Asian session, as they price in possible trade-related progress during Trump’s meeting with Xi Jinping this weekend.

  • U.K.’s BRC shop price index improves by 0.1% vs. 0.2% decline in September
  • Australia’s construction work done dips by 2.8% vs. 0.9% expected, 1.8% in Q2 2018
  • RBNZ’s Orr: “LVRs are in place now and forever”

Major Events/Reports:

More on RBNZ’s financial stability report

As mentioned in my U.S. session update, the Reserve Bank of New Zealand’s latest financial stability report focused on the central bank’s willingness to ease its loan-to-value restrictions (LVRs).

For newbies out there, easing restrictions like these tends to boost housing prices and promote additional activity among banks and borrowers.

Here are more deets about the RBNZ’s plan:

  • The new LVRs will take effect on January 2019.
  • Banks can now allot 20% (from 15%) of their new owner-occupier loans to borrowers with less than a 20% deposit.
  • Banks will can still offer 5% of new investor loans to investor borrowers, but borrowers now only have to shell out a 30% deposit (down from 35%).
  • LVRs can be loosened further if banks maintain their standards.

The RBNZ is set release more deets in a consultation paper on December.

Mixed market conditions

With not a lot of fresh catalysts to rock the markets, Nikkei and the Chinese equities benefited from White House economic adviser Larry Kudlow saying that there’s “a good possibility” that Trump and Xi Jinping can make headways over a trade deal.

Not all were impressed, however, mostly because the U.S. has been sending out mixed signals. If you recall, the POTUS himself said that he’s ready to slap the additional tariffs scheduled in January.

Meanwhile, Kudlow moderated his optimism by saying that “certain conditions have to be met” for before we see trade talks progress between the world’s largest economies.

  • Nikkei is up by 1.00% to 22,172.3
  • A SX 200 is down by 0.14% to 5,724.7
  • Shanghai index is up by 0.86% to 2,596.840
  • Hang Seng is up by 0.91% to 26,572.3

Commodity bulls missed the memo during the session, as gold took a step back on a bit of dollar strength while crude oil prices reacted negatively to more crude oil inventories reflected in the latest API report.

  • Gold is down by 0.04% to $1,214.35
  • Brent crude oil is down by 0.28% to $60.64
  • U.S. WTI is down by 0.21% to $51.97

Major Market Mover(s):

AUD and NZD

Cautious optimism over the upcoming meeting between Donald Trump and China’s Xi Jinping kept comdolls like the Aussie and Kiwi afloat during the trading session.

AUD/USD is up by 13 pips (+0.18%) to .7236; AUD/JPY is up y 17 pips (+0.21%) to 82.37; AUD/CAD is up by 22 pips (+0.22%) to .9626; AUD/CHF is up by 18 pips (+0.25%) to .7231; EUR/AUD is down by 16 pips (-0.10%) to 1.5605, and GBP/AUD is down by 32 pips (-0.18%) to 1.7606.

NZD/USD is up by 7 pips (+0.10%) to .6797; AUD/NZD is up by 9 pips (+0.08%) to 1.0656; GBP/NZD is down by 22 pips (-0.12%) to 1.8742; NZD/JPY is up by 12 pips (+0.15%) to .9041, and NZD/CHF is up by 14 pips (+0.20%) to .6793.

USD

FOMC member Clarida favoring more rate hikes, as well as cautiousness over U.S.-China trade war developments helped push the dollar a bit higher against its counterparts.

USD/JPY is up by 5 pips (+0.04%) to 113.84; USD/CHF is up by 10 pips (+0.10%) to .9994; GBP/USD is down by 4 pips (-0.03%) to 1.2740, and USD/CAD is up by 6 pips (+0.04%) to 1.3302.

Watch Out For:

  • U.K.’s bank stress test results
  • 7:30 am GMT: BOE’s financial stability report
  • 9:00 am GMT: Credit Suisse economic expectations
  • 9:00 am GMT: Euro Zone’s private loans (y/y) (3.2% expected, 3.1% previous)
  • 12:00 am GMT: Germany’s GfK consumer climate (10.5 expected, 10.6 previous)