Asian session forex traders started the week slow as the major currencies barely moved from their open prices despite a couple of potential catalysts.
- U.K. Rightmove house price index gains by 1.1% vs. 1.2% decline in September
- China’s CPI (y/y) up by 1.6% as expected vs. 1.8% growth in August
- China’s PPI (y/y) rises by 6.9% vs. 6.4% expected, 6.3% previous
- Japan’s industrial production revised down from 2.1% to 2.0% in August
Major Events/Reports:
China’s data releases
Data from the world’s second largest economy saw consumer and producer price growth in September.
Consumer prices rose by 1.6% from a year earlier in September, which is a tad softer than the 1.8% annualized growth seen in August.
A closer look tells us that food costs continued to fall while non-food costs rose further. On a monthly basis, CPI gained 0.5% after rising by 0.4% in August.
Meanwhile, producer prices popped up by a nice 6.9% from a year earlier, which is stronger than August’s 6.3% reading.
This marks the 13th consecutive month of increase and the highest since March. On a monthly basis, producer prices rose by 1.0%, up from August’s 0.9% uptick.
More importantly, higher factory gate prices point to more demand from China’s producers, which is good for China’s major trading partners *cough* Australia *cough*.
EUR dips on Austria’s election results
Just traders think the “Super Election Year” ended in Germany, Austria’s national election results are threatening the euro’s recent gains.
31-year-old Foreign Minister Sebastian Kurz just announced victory for his center-right People’s Party (OVP), which is projected to win first place (31.4%) in the weekend elections. The Social Democratic Party of Austria, which now governs in coalition with People’s Party, had 26.7%, while the Freedom Party had 27.4%.
Thing is, OVP campaigned for tougher immigration controls and a crackdown on radical Islam. The rise of another protectionist leadership in the euro region was not a welcome prospect for euro traders who are already pricing in political uncertainties in Spain.
Overall risk appetite in the markets
The major currencies might not have gotten a lot of action, but commodity prices and Asian bourses caught a bit of optimism from the market players.
- Nikkei is up by 0.67% to 21,296.50;
- Australia’s A SX 200 is up by 0.57% to 5,847.10;
- Hang Seng is up by 0.88% to 28,726.00, and
- China’s A50 is up by 0.62% to 12,353.68.
Meanwhile, fears of new Iran sanctions, geopolitical threats in Iraq’s oil-rich region, and an explosion in a Louisiana rig boosted oil prices higher.
- Brent crude oil is up by 1.19% to $57.85 and
- U.S. crude oil prices is up by 0.86% to $51.89.
Major Market Mover(s):
EUR
The common currency lost pips across the board following reports of a Eurosceptic party possibly leading Austria after last weekend’s elections.
EUR/USD is down by 7 pips (-0.06%) to 1.1806;
EUR/JPY is down by 10 pips (-0.08%) to 132.15;
EUR/GBP is down by 2 pips (-0.01%) to 1.4740.
Watch Out For:
- 6:00 am GMT: Germany’s wholesale price index (0.4% expected, 0.3% previous)
- 9:00 am GMT: Euro Zone’s trade balance (20.3B EUR expected, 18.6B EUR previous)
