Originally published by AxiTrader
Markets Overview:
- Equities: Nikkei 225 (+1.61 %), Hang Seng (+0.89 %), CSI 300 300 (-0.05 %), KOSPI (+0.79 %), S&P/ASX 200 (+1.35 %)
- Commodities: Crude Oil $44.70 (+1.43%), Brent Oil $46.20 (+1.36 %), Natural Gas $2.84 (+2.64 %), Gold $1289.48 (-1.19 %), Copper $229.80 (+1.46 %)
What traders are talking about:
Risk-on after FBI announcement
The market reacted positively to the announcement by the FBI that they found "no reason to change their July finding that Clinton was not guilty of criminal wrongdoing" after another review of her emails. Almost all major Asian stock indices rallied overnight, with the Nikkei and ASX up more than 1 % on the day.
In FX, the Dollar strengthened against most other major currencies, especially against the two safe havens - the Swiss Franc and Japanese Yen. USD/JPY started the new trading week at 104.10, up 100 pips from Friday's close, and rallied to a high of 104.58 later in the session.
New Zealand CPI revised higher
Statistics NZ has revised the Q3 CPI figures higher. It stands now at 0.3 % (vs. 0.2 % previously) quarter-on-quarter and at 0.4 % year-on-year (vs. previously 0.2 %). StatsNZ said that the previous numbers were false due to a manual processing error. There was not much of a reaction in the Kiwi dollar though. It opened around 0.7345 in Asia, but eventually tumbled back to 0.73 later in the session.
Blackrock (NYSE:BLK) expects Australian credit rating to be downgraded
The US investment company warned that Australia could lose its triple A rating soon. Blackrock noted that Australian governments have been serial under-deliverer. If it persists with that, it might see the patience of the rating agencies tested to a breaking point.
Yuan weakens
The PBoC reacted to the Dollar strengthening and set today's USD/CNY mid-point rate at 6.7725, up from 6.7514 on Friday.
MoF official warns on Yen
Ministry of Finance official Asakawa spoke overnight, and said that the MoF is concerned about disorderly FX movements and that it will act if it sees speculative movements. However, with USD/JPY back above 104, the MoF shouldn't be too unhappy.
EUR short positioning increases
CFTC released their latest FX futures positioning report on Friday (the data itself was gathered on last Tuesday). It showed that speculators added to Euro shorts ahead of the US election. EUR net short positioning increased from 124k to 137k. Meanwhile, speculators slightly trimmed GBP shorts, from 84k to 83k. They also cut the amount of JPY long positions, which declined from 45k to 43k. AUD long position rose, from 32k to 41k, while CAD net positioning stood at 16k short vs. 13k short previously.
This week's events
The focus this week will be on the US election. While the market is clearly pricing in a Clinton victory, it remains a close call, and the Brexit vote, where the market was expecting a clear victory of the Remain camp, certainly taught us something.
Aside from the elections, there are also several notable data releases this week. Tomorrow, we will get the latest Australian NAB business confidence numbers, followed by Chinese trade figures. In the EU session, UK will publish manufacturing and industrial production numbers, while in the US session, the focus will be on UK NIESR GDP data and US JOLTs figures.
The following day, we will get Chinese inflation and UK trade figures.
On Thursday, in the very early Asian session, the RBNZ will decide on interest rates, and the market is expecting a 25-bps cut. A bit later in the session, we will get Australian MI inflation expectations and home loans data.
Finally, on Friday, the main events will be the release of German CPI data, and speeches by Fed Vice President Fischer and Bank of Canada Governor Poloz.
Economic Calendar:
- 08:30 GMT - UK Halifax House Price Index
- 09:30 GMT - Euro Zone Sentix Investor Confidence
- 10:00 GMT - Euro Zone Retail Sales