Asian news flow dominates markets

It's still all about Asia. Yesterday saw a nervous tone with commodity currencies not really getting a lift all day, while G3 remained locked in their ranges and sterling came under some pressure. 

Asian news-flow still dominates overall, however. Producer prices fell 3.9% in the year to September in Japan, and 5.9% in the year to September in China. China CPI inflation meanwhile, dropped to 1.6% from 2%. 

"How you interpret the Chinese data depends on how sunny your mood is, either the continued weakness is going to spark a policy reaction to boost growth, or the disinflationary funk is deepening", says Societe Generale. 

Given the role of the CNY's strength in inflation data however, the pressure to 'get on with it' and move towards a freer-floating (or freer-sinking) currency regime must be increasing within the administration, even if there's not much sign of pressure externally. 

Still, the hope of a policy response means that AUD is only marginally weaker and the Kiwi is stronger overnight.