A quiet Asian affair today, with the only Japanese retail sales data released, which helped support the Yen against its American counterpart. Meanwhile, the US dollar remained largely subdued in tandem with Treasury yields, with the speculation rife that Jerome Powell will be appointed the next Fed Chair by Trump.
The Kiwi emerged the weakest and dropped sharply to test 5-month lows at 0.6818, following weekend’s comments by the new NZ FinMin Robertson, stating that RBNZ reforms could potentially lower rates. Its OZ counterpart, the Aussie, on the other hand, defended minor bids amid a lack of fresh catalysts.
Among other related markets, gold and oil prices traded with modest gains, while the Asian equities traded mixed, with the Nikkei consolidating last week’s rally.
Main topics in Asia
Japan retail sales rise for 11th straight month
Japanese retail sales rose for 11th straight month in September, contradicting the Bank of Japan's (BOJ) last policy statement, which said that the growth in domestic demand would "likely remain moderate."
New NZ FinMin Robertson: RBNZ reform could potentially lower rates
Reuters reports the comments from Grant Robertson, New Zealand’s new finance minister speaking in an interview TV on Sunday.
UK-German 2-year bond yield spread hits 10-year high
The two-year UK-German bond yield spread rose to 122.7 basis points on Friday; its highest level since August 31, 2007.
Trump likely to pick Powell as the next Fed President - WSJ
A report from the Wall Street Journal (WSJ) says President Trump is likely to announce Jerome Powell as a Yellen's successor at the Fed.
South Korea and China nuclear envoys to hold meeting tomorrow – Yonhap
South Korea’s media agency, Yonhap, reports the latest headlines citing that the South Korean and Chinese ambassadors for nuclear affairs are likely to hold a meeting tomorrow.
Bitcoin refreshes record high above $ 6300, up 500% on the year
Bitcoin, the world largest cryptocurrency rallied hard over the weekend to hit a new all-time high above $ 6000 mark, after having reached the previous record high at $ 6183 earlier this month.
Key Focus ahead
Stepping into a new week, the markets remain poised for a plenty of risk events from across the globe, with the FOMC and BOE interest rates decision highly anticipated ones. Also, the Eurozone CPI figures, Chinese manufacturing and services PMI reports, trade and retail sales data from Australia. Meanwhile, Trump’s decision on the next Fed Chair and the US NFP report will hold the key for the next direction on the buck.
For today, the EUR calendar remains full, with the German retail sales and CPI figures, as also with the Eurozone consumer confidence and economic sentiment figures. Meanwhile, the UK docket offers the only net lending to individuals data. Also, of note will be the ECB-speaks, as Hanson and Costa are due to speak later on the day.
Moving on, the NA session has macro news only out of the US, with the Fed’s preferred inflation gauge, personal spending, and income data to keep the US traders busy.
EUR/USD: Eyes on inflation differential ahead of a Big week
The EUR/USD pair kept its recovery mode intact in Asia, although failed to regain the key support-turned-resistance located near 1.1620 levels, as markets remain cautious stepping into a Big week ahead.
GBP/USD - 2Y US-UK spread remains elevated ahead of the BOE, focus on EUR/GBP
GBP/USD trimmed losses on Friday, largely on the back of the Catalan-led sell-off in the EUR/GBP. Cable strengthened moderately to 1.3140 levels in the Asian session today.
The Week Ahead: Key Central Banks and US Jobs Data in Focus
The week ahead will be an exceptionally busy one in terms of key macroeconomic events and data releases.
BOJ likely to remain on-hold tomorrow – BBG Survey
Bloomberg published its latest survey of economists on Monday, predicting that the Bank of Japan (BOJ) will keep its monetary policy settings unadjusted when it concludes its two-day policy meeting tomorrow.
China factory growth seen easing slightly in October - RTRS poll
Results of the latest Reuters poll showed on Monday that a majority of the economists surveyed see the Chinese manufacturing activity slowing down this month, in response to the Govt’s crackdown on air pollution.
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