- NZ Fonterra GDT price index +9.9% at latest auction, volumes off.
- Germany August industrial output mm decrease to -1.2 % (forecast 0.2 %) vs previous 0.7 %.
- BoJ leaves policy, economic assessment as is, as eyed, vote 8-1, Kiuchi again dissents, for taper but easy rates, business sentiment still favourable.
- Japan's Abe set to keep allies in key posts as attention returns to economy.
- Japan end-Sept foreign reserves $1.249 bln, end-Aug $1.244 bln.
- Quality boost- China Chongqaing Changan Auto eyes Japanese suppliers.
- Renminbi surpasses yen as payment currency, trails only USD, EUR, GBP.
- China September FX reserves fall to $3.514 trln, Aug $3.5573 trln, intervention up in September, Sep gold $61.189 bln, SDRs $10.468 bln, IMF position $4.689 bln.
- SF Fed Williams - Reiterates call for rate hike this year, +147k job growth still labor market progress, bullish on China, inflation on rise, eyes bumpy ride when accommodation removed, Fed shouldn't up rates when no one expects it, digital currencies won't replace dollar.
- (0300 ET/0700 GMT) Switzerland September foreign currency reserves; last CHF540 bln.
- (0300 ET/0700 GMT) Spain August industrial output, +4.6% y/y eyed; last +5.2%.
- (0330 ET/0730 GMT) Spain August household consumption, +0.1% m/m eyed; last -0.2%.
- (0400 ET/0800 GMT) Norway August manufacturing output, +0.4% m/m eyed; last -1.6%.
- (0430 ET/0830 GMT) UK August industrial output, +0.3% m/m, +1.2% y/y eyed; last -0.4%, +0.8%.
- (0430 ET/0830 GMT) UK August manufacturing output, +0.3% m/m, -0.1% y/y eyed; last -0.8%, -0.5%.
- (1500 ET/1900 GMT) US August consumer credit, $19.0 bln eyed; last $19.1 bln.
Key Events Ahead
- China on holiday till tomorrow.
- N/A BoE MPC begins two-day meeting, ECB Governing Council meeting.
- N/A Greece E875 mln 26-week bill, Sweden treasury bill auctions.
- (0305 ET/0705 GMT) RBA Asst Gov Debelle at launch of Australia financial markets report.
- (0600 ET/1000 GMT) Danish Economic Council bi-annual economic report, forecasts.
- (0630 ET/1030 GMT) Germany E4 bln 1.0% 2025 Bund auction.
- N/A IMF/World Bank meeting in Lima, Peru, Global Stability report 14:00.
- (1400 ET/1800 GMT) SF Fed Williams speech at Gonzaga University.
FX Recap
EUR/USD: Industrial production in Germany significantly weakened in August compared to the previous month, official data showed on Wednesday. Industrial output in Germany posted a 1.2% fall in the reported period, seasonally adjusted, after reporting a revised 1.2% growth in the preceding month. Analysts had expected a 0.2% gain. The Greek Parliament confidence vote is scheduled on Prime Minister Alexis Tsipras' new government, following a three-day debate. Looking ahead, the US calendar holds nothing of relevance except the Canadian building permits data and the weekly crude oil inventory report published by EIA. It made intraday high at 1.1283 and low at 1.1256 levels. Initial support is seen around at 1.1015 and resistance at 1.1560 levels.
USD/JPY: The Bank of Japan has kept policy unchanged since October last year when the central bank last expanded its Qualitative and Quantitative Easing (QQE) program, which currently has the monetary base expanding at a rate of around ¥80 trillion per year. However, recession worries will likely keep the BoJ under pressure to continue with the stimulus and easing policies at an upcoming board meeting on October 30, when the BOJ is expected to trim its long-term economic and inflation forecasts. Pair made intraday high at 120.36 and low at 119.76 levels. Initial resistance is seen at 123.20 and support is seen at 118.42 levels.
GBP/USD: The main highlight today is expected to be the UK industrial and manufacturing production data. Despite an expected rebound in production in August, UK manufacturing remains one of the most volatile and fragile sectors of all of the output-side segments of the economy. Apart from weaker factories, both services and retail sectors saw their activity decelerate in the second half of this year. Pair made intraday high at 1.5257 and low at 1.5219 levels. Initial support is seen at 1.5107 and resistance is seen around 1.5725 levels.
NZD/USD: Pair rallied in the afternoon, reaching a new six-week high as the kiwi responded to the Fonterra's favourable dairy auction, while the buck lacked the necessary tools for response. It made intraday high at 0.6605 and low at 0.6513 levels. In addition, risk-on appetite flourished as traders believed in a postponed interest rate hike by the Federal Reserve (Fed), following a mediocre non-farm payrolls update in September. Initial support is seen at 0.6195 and resistance at 0.6605 levels.
AUD/USD: The Australian dollar continued to derive support from an unchanged policy stance taken by the Reserve Bank of Australia's policymakers, who decided to hold the official cash rate steady at its record low of 2%. With regard to the Australian dollar, policymakers said the currency is adjusting to the significant decline in key commodity prices. Pair made intraday low at 0.7196 levels and high around 0.7149 levels. Initial support is seen at 0.6908 and resistance at 0.7245 levels.
Equity Recap
Most Asian markets registered gains on Wednesday, after a rise in oil prices lifted shares of energy companies, amid estimates the Bank of Japan (BoJ) will act in the coming months after holding fire at today's meeting.
Japan's benchmark Nikkei 225 index advanced 0.75% to 18,322.98 at the market close, while Tokyo's broader Topix gauge added 1.17% to end at 1,493.17, with energy companies among the top gainers.
The Australian S&P/ASX 200 index ended 0.59% higher at 5,197.90, with energy companies jumping, while New Zealand's benchmark S&P/NZX 50 index dipped 0.32% to end at 5,650.03.
In South Korea, the benchmark Kospi index gained 0.76% to end the day at 2,005.84.
Seoul shares close up 0.78 pct.
Tokyo's Nikkei average closes up 0.75 pct at 18,322.98.
Australia's S&P/ASX 200 index closes up 0.39 pct at 5,187.30 points.
Treasury Recap
BOJ offers to lend Y96.4 bln of JGBs on spot basis through 10/8 as a secondary source of JGBs.
Australian government bond futures eased, with the three-year bond contract off 1 tick at 98.200. The 10-year contract shed 1.5 ticks to 97.3500.
New Zealand government bonds were softer, sending yields 1.5 basis points higher along the curve.
Commodity Recap
Gold rose towards its highest in nearly two weeks on Wednesday, as more sluggish U.S. economic data supported views that the Federal Reserve would delay a rate hike to next year. Spot gold had risen 0.1 percent to $1,148.16 an ounce by 0331 GMT. The metal climbed to $1,151.20 in the previous session, its highest since Sept. 24. Liquidity was thin in Asian hours with top consumer China out on a holiday.
Crude oil moved higher on Wednesday, hovering near one-month high and extending sharp gains from the previous session, as traders cheered news that stockpiles in the US declined. Futures for WTI rallied 1.65% to trade at $49.33 per barrel, while Brent futures were traded 0.99% higher at $52.97 per barrel.
