MNI China Daily Summary: Wednesday, October 16

MNI: ITALY FINAL HICP +1.2% M/M, +0.7%Y/Y

MNI BRIEF: BOJ's Adachi Sees Conditions For Normalisation

MNI: PBOC Net Injects CNY581.4 Bln via OMO Wednesday

CHINA PBOC CONDUCTS CNY642.4 BLN VIA 7-DAY REVERSE REPOS WEDS

MNI: PBOC Sets Yuan Parity Higher At 7.1191 Weds; +2.66% Y/Y

MNI: UK SEP OUTPUT PPI -0.5% M/M, -0.7% Y/Y

MNI: UK SEP CPI +0% M/M, +1.7% Y/Y

Japan Aug Machine Orders -1.9% M/M

CANADA: Politics Week: Trudeau Faces More Pressure To Resign

CANADA: Politics Week: Parliament Opens With Early Election Threats

AUSTRALIA: Albanese Lines Up Budget for May Election

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ASIA FX: Most SEA Currencies Higher, PHP Lags, BI, BoT & BSP Still To Come

ASIA FX
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South East Asian currencies are mostly firmer against the USD in the first part of Wednesday trade. MYR and IDR lead the gains, while PHP has been a laggard. 

  • USD/IDR opened up noticeably softer, touching lows of 1510 before gradually recovering (we last track near 15545), still 0.20% firmer in IDR terms for the session. Sentiment has been buoyed around possible fiscal policy continuity, while some easing in Fed expectations has helped curbed US real yields, another rupiah positive. BI meets later and is expected to remain on hold.
  • USD/MYR is back sub the 4.3000 level, aided by a firmer yuan backdrop. Earlier highs were at 4.3162.
  • USD/THB has drifted lower but couldn't sustain break of the 20-day EMA near 33.25. We were last at 33.33. Onshore rhetoric from the government and business groups around the need for easier policy settings from the BoT continues. The Commerce Minister wants to see 50bps worth of cuts this year. An industry group also wants to see USD/THB stabilize in the 34-35 region. BoT meets later, the consensus is for no change, but our sense is the central bank may paint a more dovish outlook.
  • USD/PHP has remained supported, the pair last near 57.85/90. The BSP also meets later and is expected to cut rates by 25bps. Upside focus in the pair is likely to rest on the 58.00 level. 
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South East Asian currencies are mostly firmer against the USD in the first part of Wednesday trade. MYR and IDR lead the gains, while PHP has been a laggard. 

  • USD/IDR opened up noticeably softer, touching lows of 1510 before gradually recovering (we last track near 15545), still 0.20% firmer in IDR terms for the session. Sentiment has been buoyed around possible fiscal policy continuity, while some easing in Fed expectations has helped curbed US real yields, another rupiah positive. BI meets later and is expected to remain on hold.
  • USD/MYR is back sub the 4.3000 level, aided by a firmer yuan backdrop. Earlier highs were at 4.3162.
  • USD/THB has drifted lower but couldn't sustain break of the 20-day EMA near 33.25. We were last at 33.33. Onshore rhetoric from the government and business groups around the need for easier policy settings from the BoT continues. The Commerce Minister wants to see 50bps worth of cuts this year. An industry group also wants to see USD/THB stabilize in the 34-35 region. BoT meets later, the consensus is for no change, but our sense is the central bank may paint a more dovish outlook.
  • USD/PHP has remained supported, the pair last near 57.85/90. The BSP also meets later and is expected to cut rates by 25bps. Upside focus in the pair is likely to rest on the 58.00 level.