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With no major economic report on the docket, Asian session forex traders focused on the overall risk-friendly vibe from the previous trading session.

The dollar tried to get back some of its pips before seeing retracements, while commodity-related currencies just plain shot higher.

  • Japan’s key machinery orders drops by 8.1% vs. 1.8% decline expected, 3.4% gain in August
  • Japan’s current account 1.84T JPY vs. 2.27T JPY surplus in August
  • Japan’s bank lending (y/y) up by 2.8% vs. 3.0% expected, 2.9% previous
  • Japanese Economy Watchers’ Sentiment index rises from 51.3 to 52.2 in October
  • BOJ’s summary of opinions shows several stressing the sufficiency of current stimulus
  • Australia’s home loans slips by 2.3% vs. 2.5% increase expected, 1.5% growth in August
  • U.K.’s RICS house price balance down to 1% vs. 4% expected, 6% previous
  • China’s CPI (y/y) up by 1.9% vs. 1.7% gain expected, 1.6% growth previous
  • China’s PPI (y/y) retains 6.9% growth against 6.6% growth expectations

Major Events/Reports:

China’s CPI and PPI reports

Data from the world’s second-largest economy showed consumer prices rising by 1.9% from a year earlier in October, which is slightly higher than September’s 1.6% uptick and the expected 1.7% growth. Not only that, but it also marks the fastest price increase since January!

Apparently, the cost of non-food such as transport and communication and household goods and services grew at a faster pace than the previous month, while the cost of food items such as fresh vegetables, eggs, and milk fell at a slower pace compared to last month.

Meanwhile, a separate producer price report printed a 6.9% increase from a year earlier in October. Not only does this match September’s rate, but it’s also higher than the expected 6.6% uptick.

October’s PPI also represented the 14th consecutive month of gain for the report, and marks the highest reading since March.

Traders had mixed reactions to the report. While a less-than-spectacular CPI report held some of the bulls off, the better-than-expected PPI report reassured investors that output remains healthy despite government efforts to crack down on production during winter months to limit pollution.

Overall risk appetite

With not a lot of data on the docket, Asian session traders focused on catching up to their U.S. counterparts. If you recall, U.S. bourses made new record highs yesterday.

  • Nikkei is up by 1.73% to 23,311.00;
  • Australia’s A SX 200 is up by 0.53% to 6,048.20;
  • Hang Seng is up by 0.87% 29,160.00, and
  • China’s A50 0.14% is up by 12,929.71.

Commodity prices were a little bit more mixed with

  • Gold falling by 0.15% to $1,281.81;
  • Silver falling by 0.46% to $17.059;
  • Brent crude oil inching 0.14% higher to $56.89, and
  • U.S. oil prices popping up by 0.22% to $62.63.

Major Market Mover(s):

JPY

The overall risk-friendly vibe and the BOJ’s decision to stick to plan (not that we didn’t already know about it) one-two-punched the low-yielding yen across the board today.

AUD/JPY shot up to 87.66 before ending at 87.55;
CAD/JPY rose to 89.63 before levelling off to 89.51;
GBP/JPY jumped to 149.70 before settling down to 149.65, and
NZD/JPY rose to 79.46 before slipping back to 79.31.

USD

The low-yielding Greenback tried to recover some of its losses against its major counterparts, but fell short when risk appetite reigned supreme during the session.

GBP/USD is up by 16 pips (+0.12%) to 1.3127;
USD/CHF slipped by another pip to parity;
AUD/USD inched 2 pips higher (+0.03%) to .7680.

Watch Out For:

  • 6:45 am GMT: Switzerland’s unemployment rate to remain at 3.1%?
  • 7:00 am GMT: Germany’s trade balance (22.3B EUR expected, 20.0B EUR previous)
  • 7:00 am GMT: Germany’s current account balance (23.5B EUR expected, 17.8B previous)
  • 9:00 am GMT: ECB’s economic bulletin
  • 10:00 am GMT: EU’s economic forecasts