- Japan September trade deficit Y114.5 bln, Y84.4 bln surplus eyed, exports +0.6% y/y, +3.4% eyed, imports -11.1%, -11.7% eyed, exports to US +10.4%, China -3.5%, Asia -0.9%, MoF - export growth slowest since August '14.
- Japan September crude import volume +1.1% y/y, LNG -5.0%, thermal coal +3.2%.
- Australia September Westpac/MI leading index 97.6, -0.35% vs trend, August 97.48.
- NZ migration gains in September, short-term visitors +12.2% y/y.
- NZ Fonterra GDT price index -3.1%, volumes off too, previous sale +9.9%.
- (0430 ET/0830 GMT) UK September PSNB, GBP 9.4 bln eyed; last bln.
- (0430 ET/0830 GMT) UK September ex-banks, GBP10.1 bln eyed; last bln.
- (0430 ET/0830 GMT) UK September PSNCR; last -GBP220 mln.
Key Events Ahead
- Hong Kong holiday.
- N/A Sweden SEK10 bln 89-day treasury bill auction.
- (0530 ET/0930 GMT) Germany E4 bln zero% 2017 Schatz auction.
- (0830 ET/1230 GMT) US TsySec Lew, CommSec Pritzker, others at Washington, DC conference.
- (1000 ET/1400 GMT) BoC policy announcement, no change in 0.5% o/n rate eyed.
- (1115 ET/1515 GMT) BoC Gov Poloz press conference.
- (1300 ET/1700 GMT) BoE Gov Carney lecture in Oxford, to spell out Brexit risks.
- (1330 ET/1730 GMT) Fed Gov Powell in NY Fed conference panel discussion.
- (1845 ET/2245 GMT) RBA Asst Gov Edey speech at ISDA annual Australia conference in Sydney.
FX Recap
EUR/USD: The common currency traded slightly above its lowest level in almost two weeks on Tuesday after surrendering about a third of its daily gains to the greenback, which received support from upbeat construction data. There is nothing much to report in the European session ahead as the data-light EUR calendar extends into a third day on Wednesday. It made intraday high at 1.1367 and low at 1.1342 levels. Initial support is seen around at 1.1015 and resistance at 1.1560 levels.
USD/JPY: Japan's trade accounts were in deficit for the sixth-consecutive month in September after exports rose at the weakest pace in over a year. The trade shortfall contracted from ¥569.7 billion in August to ¥114.5 billion last month, according to the Ministry of Finance, while analysts expected a trade surplus of around ¥87 billion in September. Pair made intraday high at 120.01and low at 119.75 levels. Initial resistance is seen at 123.20 and support is seen at 118.42 levels.
GBP/USD: Sterling trading flat against USD and hovering around 1.5440 levels. Yesterday the BOE policymaker noted that the credit conditions for the business sector in the UK have eased and this calls for a rate-hike sooner rather than later. While BOE Governor Carney's testimony on the Bank of England (BOE) Bill before the Treasury Select Committee turned out to be a non-event, as the central bank chief didn't touch upon the monetary policy. Pair made intraday high at 1.5447 and low at 1.5437 levels. Initial support is seen at 1.5107 and resistance is seen around 1.5725 levels.
NZD/USD: The Global Dairy Trade (GDT) Price index slightly disappointed at Fonterra's latest regular auction on October 20, showing the first drop since August 4. According to the latest release, dairy prices declined by 3.1% as an average price stood at $2,735.00, following a solid 9.9% pace of growth booked on October 6. Pair made intraday high at 0.6758 and low at 0.67217 levels. Initial support is seen at 0.6235 and resistance at 0.6896 levels.
AUD/USD: Aussie traders lacked conviction in the overnight session on Wednesday, with a relatively uneventful session in Asia. Markets remained quiet ahead of the European Central Bank (ECB) policy meeting on Thursday and next week's Federal Open Market Committee (FOMC) meeting. In the previous session the Reserve Bank of Australia (RBA) released its October meeting minutes, which suggest little change for the near term path for monetary policy. While there are clearly concerns over growth prospects in China and East Asia, on the domestic front the tone was quintessentially 'glass half full'. Pair made intraday high at 0.7275 levels and low around 0.7236 levels. Initial support is seen at 0.6908 and resistance at 0.7438 levels.
Equity Recap
Japan's benchmark Nikkei 225 index rallied 0.75% to 18,343.84 points within the first hour of trade, while Tokyo's broader Topix gauge jumped 0.73% to 1,510.21 points.
Korea's benchmark Kospi index jumped 0.49% to 2,049.45 points on Wednesday morning in Seoul, while mainland China's benchmark Shanghai Composite traded little higher at 3,426.51 points at the opening bell.
Hong Kong markets were closed on Wednesday for the Chung Yeung Festival.
The benchmark Australian S&P/ASX 200 index shed 0.36% to trade at 5,216.60 points in Sydney, with the big banks dragging the index lower on Wednesday.
New Zealand's benchmark S&P/NZX 50 index rose 0.27% to 5,911.15 points this afternoon in Wellington.
Australia's S&P/ASX 200 index closes up 0.21 pct at 5,246.50 points.
Tokyo's Nikkei average closes up 1.91 pct at 18,554.28.
Treasury Recap
BOJ offers to lend Y400 bln of JGBs on spot basis through 10/22 as a secondary source of JGBs.
Thailand 20 bln baht, 4.67-year government bond avg accepted yield 2.1477 pct. Thailand 8.4 bln baht, 28.7-year government bond average accepted yield 3.6204 pct.
New Zealand government bonds fell, with yields up to 5.5 ticks higher at the long end the curve.
Australian government bond futures eased, with the three-year bond contract off 4 ticks at 98.170. The 10-year contract shed 4 ticks to 97.3150, while the 20-year contract lost 5 ticks to 96.7550, leading to a bearish steepening of the curve.
Commodity Recap
Prices for oil were traded lower on Wednesday after a fresh report revealed a surge in US crude stockpiles, adding to worries that the global glut is unlikely to ease anytime soon. Futures for WTI dropped 0.54% to trade at $46.04 per barrel, while Brent futures were traded 0.21% lower at $48.61 per barrel.
The precious metal eased in Asia on Wednesday, as the bulls take a breather after reaching the highest level this week above 1180 threshold. Currently, gold trades almost unchanged at 1177.50, having posted session highs at 1179.20.
