Asia Roundup: BoJ keeps policy on hold despite zero inflation, EU CPI in focus – October 30, 2015

Market Roundup

• BoJ leaves policy as is, 8-1 vote, Kiuchi dissent for taper.
   
• Japan government mulling Y3 trln+ supplementary budget.
   
• Japan September nationwide core CPI -0.1% y/y, Tokyo Oct core -0.2%, -0.2% and -0.1% eyed, CPI moving away from BoJ's 2% target.
   
• Japan September household spending -1.3% m/m, -0.4% y/y, +0.3% and +1.2% eyed.
   
• Japan September unemployment 3.4%, jobs applicants ratio 1.24, highest since January '92, both as eyed, jobs applicants ratio 1.23 in August.
   
• Japan September housing starts +2.6% y/y, +6.6% eyed, construction orders +6.7%.
   
• Japan fund managers up stock holdings in October.
   
• Japanese companies remain more keen to invest in ASEAN than China.
   
• China to allow foreign CBs to open CNY settlement accounts.
   
• Fitch - China 2-child policy cannot avert pressure on population next 20-yrs.
   
• China policy change not seen as formula for food maker's growth.
   
• Foreign CB US debt holdings -$9.093 bln to $3.292 trln week-ended Oct 28, Treasuries -$6.574 bln to $2.970 trln, agencies -$2.558 bln to $276.091 bln.
   
• NY Fed - Swaps with foreign central banks $140 mln Oct 28 week, all with ECB.
   
• Lipper - US stock funds post $8.4 bln inflows latest week.
   
• UK October GfK consumer confidence index slips to 4-mo low +1, +4 eyed, Sept +3.
   
• S&P - Britain may face two-notch rating cut if it leaves EU.
   
• Australia Sept private-sector credit +0.8% m/m, +6.7% y/y, housing +0.6%, +7.5%.
   
• Australia Q3 producer price index +0.9% q/q, +1.7% y/y.
   
• NZ Oct ANZ biz confidence index +10.5, own activity +23.7, last -18.9, +16.7.
   
• NZ Sept new dwelling consents -5.7% y/y, Aug -5.3%, July +20%.

Economic Data Ahead

• (0345 ET/0745 GMT) France September consumer spending, +0.2% m/m; last +0.3%.
   
• (0345 ET/0745 GMT) France September producer prices; last -0.9% m/m.
   
• (0400 ET/0800 GMT) Spain Q3 GDP - estimated, +0.8% q/q, +3.4% y/y eyed; last +1.0%, +3.1%.
   
• (0400 ET/0800 GMT) Switzerland October KOF indicator, 100.0 eyed; last 100.4.
   
• (0500 ET/0900 GMT) Italy September unemployment, 11.9% eyed; last 11.9%.
   
• (0500 ET/0900 GMT) Norway October unemployment, 2.9% nsa eyed; last 2.9%, 96.42k sa.
   
• (0500 ET/0900 GMT) Spain August current account balance; last bln surplus.
   
• (0600 ET/1000 GMT) EZ September unemployment, 11.0% eyed; last 11.0%.

• (0600 ET/1000 GMT) EZ Oct inflation flash, unchanged y/y eyed; last -0.1%.
   
• (0600 ET/1000 GMT) EZ Oct - ex-food/energy, +0.9% y/y eyed.
   
• (0600 ET/1000 GMT) Italy Oct CPI flash, +0.1% m/m, +0.2% y/y eyed; last -0.4%, +0.2%.
   
• (0600 ET/1000 GMT) Italy Oct HICP - flash, +0.3% m/m, +0.2% y/y eyed; last +1.6%, +0.2%.
   
• (0700 ET/1100 GMT) Italy Sep PPI; last -0.7% m/m, -2.9% y/y.
   
• (0830 ET/1230 GMT) US Sep pers income/consumption, both +0.2% m/m eyed; last +0.3%, +0.4%.
   
• (0830 ET/1230 GMT) US Sep core PCE price index, +0.2% m/m eyed; last +0.1% m/m, +1.3% y/y.
   
• (0830 ET/1230 GMT) US Q3 employment costs index, +0.6% q/q eyed; last +0.2%.
   
• (0945 ET/1345 GMT) US Oct Chicago PMI, 49.0 eyed; last 48.7.
   
• (1000 ET/1400 GMT) US Oct U.Mich sentiment index - final, 92.5 eyed; prelim 92.1.
   
• (1000 ET/1400 GMT) Belgium Q3 GDP, +0.3% q/q eyed; last +0.4%.
   
• (1300 ET/1700 GMT) US Sep Dallas Fed PCE index; last +1.7%.

Key Events Ahead

• N/A London conference, various speakers incl BoE Brazier (final day).
   
• N/A OECD Paris Global Forum, various speakers (final day).
   
• N/A UK GBP2.5 and 1.5 bln 3 and 6-month treasury bill auctions.
   
• (0230 ET/0630 GMT) BoJ Gov Kuroda press conference.
   
• (0500 ET/0900 GMT) Norway November currency operations, October NOK700 mln sales/day.
   
• (1050 ET/1450 GMT) SF Fed Williams in Washington, DC Brookings Institution panel discussion.
   
• (1125 ET/1525 GMT) KC Fed George speech in Kansas City.
   
• (1430 ET/1830 GMT) Fed open meeting on banks, swap margins, capital requirements.

FX Recap

EUR/USD: The dollar loses some luster after strong gains post-FOMC statement, but is still trading close to two-and-a-half month highs against the euro. Germany will report the results of retail sales in September, with a 0.4% gain forecast on a monthly basis, following the 0.4% drop in August, and a 3.4% hike annually after advancing 2.5% y/y a month ago. The euro zone will publish its October inflation data estimate, with inflation expected to register a flat 0.0% result year-on-year. In September, consumer price growth in the euro zone reached a negative 0.1% annual level. It made intraday high at 1.0997 and low at 1.0965 levels. Initial support is seen around at 1.0854 and resistance at 1.1560 levels.

USD/JPY: The Bank of Japan made no changes to monetary policy on Friday as it still sees inflation gradually reaching the 2% target, albeit at a slower pace that previously forecast. The move to keep policy on hold came just hours after figures showed headline inflation slowing to the weakest pace in over two years last month. The consumer price index (CPI) was flat in September, while the national core CPI fell 0.1% year-on-year. Pair made intraday high at 121.48 and low at 120.29 levels. Initial resistance is seen at 123.20 and support is seen at 118.42 levels.

GBP/USD: British sterling slightly advanced on Friday, taking advantage of the mostly unimpressive US data, namely pending home sales in September along with the first estimate of GDP.  Market will focus on series of Euro an well as US data for the further directions. Pair made intraday high at 1.5335 and low at 1.5306 levels. Initial support is seen at 1.5107 and resistance is seen around 1.5725 levels.

NZD/USD: Businesses' confidence levels improved sharply this month in New Zealand, adding to signs that monetary policy is doing its job. The ANZ Business Confidence Index went from -18.9 in September to 10.5 in October, where a reading above zero signals optimism and a reading below zero indicates pessimism. It made intraday high at 0.6757 and low at 0.6685 levels. Initial support is seen at 0.6235 and resistance at 0.6896 levels.

AUD/USD: The Australian dollar pushed higher against the greenback on Friday, moving in lockstep with its New Zealand cousin after a business confidence index sprung higher in October. Australia's currency also likely gained support after the September-quarter Producer Price Index (PPI) came in well above estimates, rising 0.9% instead of the 0.3% increase forecast by markets. Pair made intraday high at 0.7117 levels and low around 0.7066 levels. Initial support is seen at 0.6908 and resistance at 0.7438 levels.

Equity Recap

Japan's Nikkei share average falls 0.6 pct after BOJ keeps monetary policy steady.

Tokyo's broader Topix gauge down 0.03% at 1,546.69 points.

Hong Kong's benchmark Hang Seng index shed 0.39% to trade at 22,731.42 points not long after the opening bell, and mainland China's benchmark Shanghai Composite eased 0.22% to 3,379.89 points at the same time.

Korea's benchmark Kospi index slipped 0.20% to 2,030.06 points this morning in Seoul.

The benchmark Australian S&P/ASX 200 index traded 0.85% lower at 5,221.90 points in Sydney, with Australia's heavily-weighted banks dragging the index lower.

New Zealand's benchmark S&P/NZX 50 index fell 0.51% to 5,972.32 points this afternoon in Wellington.

Australia's S&P/Asx 200 Index Closes Down 0.51 Pct At 5,239.90 Points.

Tokyo's Nikkei average closes up 0.78 pct at 19,083.10.

Treasury Recap

Thailand 35 bln baht, 14-day central bank bond average accepted yield 1.43707 pct.

BOJ offers to lend Y100 bln of JGBs on spot basis through 11/2 as a secondary source of JGBs.

New Zealand government bonds eased, with yields 4 basis points higher.

Australian government bond futures eased in line with U.S. Treasuries. The three-year bond contract lost 2 ticks to 98.210, while the 10-year contract dropped 4 ticks to 97.3500. The 20-year contract eased 3 ticks to 96.7950.

Commodity Recap

Gold held near its lowest in three weeks on Friday and looked set to post its worst week in two months on expectations that the Federal Reserve would raise U.S. rates this year. Spot gold was steady at $1,146.26 an ounce by 0032 GMT, not far from a three-week low of $1,144.20 in the previous session.

Oil was down on Friday after having a roller-coaster session on Thursday, with investor enthusiasm limited by global growth worries and a bearish outlook for the commodity. Futures for WTI dropped 0.54% to trade at $45.81 per barrel, while Brent futures lost 0.37% to $48.62 per barrel.