- Japan September domestic corporate goods prices -0.5% m/m, -3.9% y/y, largest drop in nearly 6 yrs, -0.3% and -3.9% eyed, domestic final goods prices -1.1% y/y.
- Japan Sept money supply M2 +3.8% y/y, M3 +3.1%, broadest liquidity +4.2%.
- Japan Post's IPO said to be fully subscribed after two days.
- China September CPI +0.1% m/m, +1.6% y/y, +0.5% and +1.8% eyed, food CPI +2.7% y/y, non-food +1.0%; Sept PPI -0.4% m/m, -5.9% y/y, as eyed.
- Odds narrow on Australia rate cut after Westpac up mortgage rates.
- Australia Oct Westpac/MI consumer confidence index +4.2% to 97.8, recently more volatile, job prospects up.
- Australia AOFM sells A$4 bln 3.25% 2039 bonds via CBA, Deutsche, UBS, Westpac.
- RBNZ Gov Wheeler - Further OCR cuts likely, China growth greatest concern, substantial CNY depreciation would have serious implications for world economy, US bright spot; little monetary policy can do to lower exchange rate.
- S&P ratings agency upwardly revised New Zealand's dairy giant Fonterra's outlook to 'stable' from credit watch 'negative'.
- New Zealand govt posts 1st operating surplus in 7 yrs in '14/15, to continue to focus on debt reduction, non-residents held 64.1% of NZ govt securities in September.
- (0300 ET/0700 GMT) Spain September CPI, -0.3% m/m, -0.9% y/y eyed; last -0.3%, -0.4%.
- (0300 ET/0700 GMT) Spain September HICP, +0.4% m/m, -1.2% y/y eyed; last -0.4%, flash -1.2%.
- (0400 ET/0800 GMT) Italy September CPI, -0.3% m/m, +0.3% y/y eyed; flash -0.3%, +0.3%.
- (0400 ET/0800 GMT) Italy September HICP, +1.6% m/m, +0.2% y/y eyed; flash +1.6%, +0.2%.
- (0430 ET/0830 GMT) UK September claimant count, -2.1k eyed; last +1.2k.
- (0430 ET/0830 GMT) UK August average weekly earnings - 3-mo average, +3.1% y/y eyed; last +2.9%.
- (0430 ET/0830 GMT) UK August ILO unemployment, 5.5% eyed; last 5.5%.
- (0500 ET/0900 GMT) Switzerland October ZEW investor sentiment index; last 9.7.
- (0500 ET/0900 GMT) Euro Zone August industrial output, -0.5% m/m, +1.8% y/y eyed; last +0.6%, +1.9%.
- (0830 ET/1230 GMT) US September PPI, -0.2% m/m, -0.7% y/y eyed; last unchanged, -0.8%.
- (0830 ET/1230 GMT) US September retail sales, +0.2% m/m eyed; last +0.2%.
- (0830 ET/1230 GMT) US September ex-autos, -0.1% m/m eyed; last +0.1%.
- (1000 ET/1400 GMT) US August business inventories, +0.1% m/m eyed; last +0.1%.
Key Events Ahead
- N/A Norway NOK2 bln 1.75% 2025, Sweden SEK4 bln 2.5% 2025 bond auctions.
- N/A Greece E625 mln 13-week bill auction.
- (0400 ET/0800 GMT) Austria Fin Min Schelling presents budget to parliament.
- (0530 ET/0930 GMT) Portugal E1 bln total 2.875% and 4.1% 2025 and 2037 OT auctions.
- (0700 ET/1100 GMT) Norges Bank Gov Olsen speech in Oslo.
- (1300 ET/1700 GMT) BoE Chief Econ Haldane lecture in Guildford, England.
- (1400 ET/1800 GMT) Fed Beige Book release.
FX Recap
EUR/USD: The pair pushed toward the $1.14 handle during the Asian session on Wednesday on the global risk-off approach, which now benefits the euro. Yesterday ZEW Surveys failed to spur any reaction, with the economic sentiment gauge printing 1.9, down from 12.1 in September, while the sub Current Situation Index dropped from 67.5 to 55.2. Today is data thin calendar for European ahead. It made intraday high at 1.1401 and low at 1.1377 levels. Initial support is seen around at 1.1015 and resistance at 1.1560 levels.
USD/JPY: The broader market sentiment continues to worsen for the second straight session, with the underlying reason being the same - poor economic news from China. The Japanese yen continues to garner support on global risk-off approach. Pair made intraday high at 119.80 and low at 119.48 levels. Initial resistance is seen at 123.20 and support is seen at 118.42 levels.
GBP/USD: Wednesday's labour market data from the ONS is expected to show that a tightening labour market and skills shortages continue to generate upward pressure on earnings in some sectors of the UK economy. Yesterday annual rate of CPI slipped back into deflationary territory by 0.1% in September from the previous 0.0% growth. Pair made intraday high at 1.5290 and low at 1.5246 levels. Initial support is seen at 1.5107 and resistance is seen around 1.5725 levels.
NZD/USD: The kiwi dollar bounced back from its three-day low on Wednesday, reversing its course after comments from Reserve Bank of New Zealand (RBNZ) Governor Graeme Wheeler had sent the currency lower. Wheeler spoke extensively about the limits of what monetary policy can achieve. Wheeler said it is "important also to consider whether borrowing costs are constraining investment" and spoke of the need to "save ammunition". This suggests that the RBNZ will take a cautious approach to further rate cuts. The rebound came after S&P ratings agency upwardly revised New Zealand's dairy giant Fonterra's outlook to 'stable' from credit watch 'negative'. Pair made intraday high at 0.6680 and low at 0.6618 levels. Initial support is seen at 0.6235 and resistance at 0.6721 levels.
AUD/USD: The Australian dollar shifted down a gear on Wednesday morning in Sydney after Westpac Bank hiked mortgage rates in an effort to meet new regulatory capital requirements, prompting fresh calls for the RBA to lower rates in November. A 0.20% hike across all Westpac mortgage rates on Wednesday immediately raised suspicion that the Reserve Bank of Australia (RBA) would need to counter Westpac's effective tightening by loosening monetary policy, possibly as soon as next month. The AUD/USD pair was down 0.43% at $0.7198 on Wednesday morning in Sydney from $0.7246 where the pair closed in New York on Tuesday just hours earlier. Pair made intraday high at 0.7246 levels and low around 0.7198 levels. Initial support is seen at 0.6908 and resistance at 0.7438 levels.
Equity Recap
Japan's benchmark Nikkei 225 index plunged 1.79% to 17,907.68 points within the first hour of trade, while Tokyo's broader Topix gauge tumbled 1.79% to 1,473.77 points.
Hong Kong's benchmark Hang Seng index fell 0.52% to 22,489.17 points shortly after the opening bell, and mainland China's benchmark Shanghai Composite dipped 0.21% to 3,286.34 points at the same time.
Korea's benchmark Kospi index was down 0.45% at 2,008.10 points on Wednesday morning in Seoul.
The benchmark Australian S&P/ASX 200 index fell 0.68% to 5,167.50 points in Sydney, with oil stocks crumbling and other miners coming under pressure after commodities fell overnight.
New Zealand's benchmark S&P/NZX 50 index rose 0.39% to 5,725.28 points this afternoon in Wellington.
Australia's S&P/ASX 200 index closes down 0.17 pct at 5,194.10 points.
Tokyo's Nikkei average closes down 1.89 pct at 17,891.00.
Treasury Recap
China finance ministry auctions 10-year bonds at 2.99 pct yield, market expected 3.10 pct.
Japan 5-year JGB auction lowest price 100.2200, average price 100.2300, bids accepted at lowest price 72.6847 pct.
US 10-year treasuries yield at 2.040 percent vs US close of 2.055 percent on Tuesday.
New Zealand government bonds had a firm tone on the short end of the curve with yields between 1 and 2 tick lower.
Australian government bond futures rose, with the three-year bond contract up 5 ticks at 98.210. The 10-year contract added 5 ticks to 97.3600, while the 20-year contract, was up 9 ticks to 96.8450.
Commodity Recap
Gold extended gains to a fourth straight session on Wednesday, hitting a fresh three-month high, bolstered by a weaker dollar and comments from Federal Reserve officials cautioning against a rate hike this year. Spot gold rose 0.3 percent to $1,171.60 an ounce by 0347 GMT, after earlier climbing to $1,174.31; it's highest since July 6. Other precious metals were all tracking gold higher.
Oil edged up slightly on Wednesday, but gains were limited due to the ongoing worries about the oversupplied market as well as China's economic slowdown. Futures for WTI rose 0.34% to trade at $46.82 per barrel, while Brent futures were traded 0.26% higher at $49.82 per barrel.
