Risk-taking was the name of the game during the Asian session, as forex traders priced in a slightly less hawkish FOMC minutes, a bit of stability for the Spanish region, and higher equity prices from the previous session.
- U.K. RICS house price balance retains 6% growth in September
- Japan’s PPI (y/y) rises by 3.0% in September vs. 3.0% expected, 2.9% previous
- Japan’s bank lending (y/y) up by 3.0% in September vs. 2.6% expected, 3.2% previous
- AU MI inflation expectations up by 4.3% vs. 3.8% growth in September
- Japan’s tertiary industry activity slips by 0.2% vs. 0.1% uptick expected and previous
Overall risk appetite
The biggest story of the hour is the Asian bourses visiting their decade-high levels following rallies in their U.S. counterparts.
As mentioned in my U.S. session recap, optimism over the earnings season as well as the release of a slightly less hawkish FOMC meeting minutes contributed to more gains for the U.S. equities.
Spanish PM Rajoy’s tough stance on Catalonia’s bid for independence didn’t hurt risk sentiment either, since it meant stability in the euro region.
MSCI’s broadest index of Asia-Pacific shares was a hair’s breadth from its decade highs earlier today, while
- Nikkei gained 0.50% to hit 21-year highs near 20,985.50;
- Australia’s A SX 200 rose by 0.21% to 5,784.00;
- Hang Seng gained 0.26% to 28,464.00, and
- China’s A50 popped 0.19% higher to 12,236.18.
Mixed commodity price action
The Fed’s slightly more cautious meeting minutes dragged the Greenback lower across the board, which then provided support for gold prices. Meanwhile, oil prices continued to take hits after API printed a slightly bearish crude inventory report.
- Gold is up by 0.65% to $1,297.26;
- Silver is up by 0.58% to $17.233;
- Brent crude oil is down by 0.51% to $56.65, and
- U.S. crude oil prices is down by 0.53% to $51.03.
NoKor: Trump “lit the fuse of war”
Late yesterday North Korea’s Foreign Minister Ri Yong Ho was quoted by Russian journalists, saying that the Donald has lit the “fuse of war” when he called Kim Jong Un as “Rocket Man” in a speech in the United Nations.
While the threat of North Korea using its “sword of justice” (read: NoKor’s ballistic program) boosted gold prices some, it has yet to significantly affect the price action of major currencies.
Major Market Mover(s):
The low-yielding Greenback took hits against its higher-yielding counterparts on the back of overall risk appetite.
EUR/USD is up by 8 pips (+0.07%) to 1.1875;
GBP/USD is up by 28 pips (+0.21%) to 1.3257;
USD/JPY is to 112.33 after hitting a high of 112.52, and
USD/CHF dipped by 7 pips (-0.07%) to 0.9722.
Risk appetite also lit a fire under commodity prices and took the comdolls along for the ride. The Loonie only caught a short ride, however, thanks to oil prices extending its losses from the previous session.
AUD/USD is up by 25 pips (+0.32%) to .7819;
AUD/JPY is up by 24 pips (+0.27%) to 87.83;
NZD/USD is up by 16 pips (+0.23%) to .7107;
NZD/JPY is up by 16 pips (+0.20%) to 79.83;
USD/CAD slipped by 15 pips (-0.12%) to 1.2444, and
CAD/JPY inched 7 pips higher (+0.08%) to 90.28.
Watch Out For:
- 6:45 am GMT: France’s final CPI to remain at -0.1%?
- 8:30 am GMT: BOE’s credit conditions survey
- 9:00 am GMT: Euro Zone’s industrial production (0.6% expected, 0.1% previous)