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Japan Aug CPI 0.0% Y/Y; Accommodation Surge


Tight Start


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Selling In White IRs As Bond Futures Nudge Lower


AUCTION‌ ‌PREVIEW:‌ ACGB Jun '31 Supply Due

Asia-Pacific Week Ahead

     The highlight of the week will be Japanese gross domestic product for the
July-September quarter, due Wednesday. GDP is expected by economists to post a
modest 0.4% rise on quarter, or an annualized 1.6%, as a rebound in net exports
offset a slump in consumer spending caused by bad weather.
     Looking ahead, economists expect the moderate economic recovery to continue
in the October-December quarter, led by a possible rebound in private
consumption and solid business investment.
     Bank of Japan
     Monday, 6:45 pm in Zurich (1745 GMT, 2:45 am JST Tuesday): BOJ Governor
Haruhiko Kuroda speaks at the Swiss Institute for International Studies,
University of Zurich.
     Monday, 8:50 am JST (2350 GMT): The BOJ releases the October corporate
goods price index (CGPI), the key indicator of producer prices. The MNI median
forecasts: +3.1% on year for the 10th straight y/y rise vs. +3.0% in September;
+0.1% on month for the second straight m/m rise vs. +0.2% in September.
     Wednesday, 8:50 am JST (2350 GMT): The Cabinet Office releases preliminary
July-September GDP. The MNI median forecast: +0.4% on quarter, or an annualized
1.6% (forecast range: +0.2% to +0.4%, or an annualized +0.6% to +1.7%), the
seventh straight quarter of growth after +0.6%, or an annualized 2.5% in
     Japanese Government Bonds
     Japanese government bond yields may rise temporarily on profit-taking
following the recent yield declines, but a sharp rise in JGB yields is unlikely
due to investors' bargain-hunting. The 10-year yield fell to 0.020% last week
for the lowest level since September and the 40-year yield dropped to 0.985%,
the lowest since June 27.
     The 10-year JGB yield is expected to move between 0.015% and 0.050% this
week against the bank's target of around zero. It rose to 0.080% on Oct. 3 for
the highest level since July 26 after falling to -0.010% on Sept. 8, the lowest
since Nov. 15, 2016.
     Monday: BOJ outright purchase operations for JGBs with remaining life of
1-3 and 3-5 years expected.
     Tuesday: The Ministry of Finance to auction 2.2 trillion of 5-year bonds.
     Wednesday: The MOF to auction Y2.3 trillion of 1-year Treasury discount
bills. BOJ outright purchase operations for JGBs with remaining life 1-3, 3-5
and 5-10 years expected.
     Thursday: The MOF to auction Y1.0 trillion of 20-year bonds and Y4.4
trillion of three-month Treasury discount bills.
     Friday: BOJ outright purchase operations for JGBs with remaining life of
1-3, 3-5, 10-25 and more than 25 years expected.
     The key to the week will be the release of economic data for October to
determine whether strong third quarter growth continued into the first month of
the fourth quarter. Analysts will be looking in particular to see how big an
impact the government's new anti-pollution campaign is having on production and
     Any day from Monday to Wednesday, time uncertain: People's Bank of China is
due to release new loan, M2 money supply and total social financing data for
October. Bank loans are expected to have increased CNY733 billion, down from
CNY1.27 trillion in September, according to the median of an MNI survey. Total
social financing is predicted to increase CNY1.1 trillion, down from the CNY1.82
trillion gain the previous month. M2 money supply is expected to have risen 9.2%
year-on-year, the same rate as in September.
     Tuesday at 10:00 CST (02:00 GMT): Retail sales and industrial production
data for October and fixed-asset investment data for January-October is due to
be released by the National Bureau of Statistics (NBS). Retail sales growth rate
is expected to have risen 10.4% year-on-year, up from the 10.3% increase in
September, according to the median of an MNI survey. Industrial production is
estimated to have grown 6.3%, down from the rise of 6.6% the month before.
Fixed-asset investment is predicted to have growth 7.4% in the first 10 month of
the year, slowing from a gain of 7.5% in the first nine months.
     The highlight of the week will be October labor market data to be released
Thursday. Ythe RBA's quarterly Statement on Monetary Policy released last Friday
showed its prime concern is the subdued pace of wage growth.
     Tuesday 9:30 am AEDT (2230 GMT): ANZ-Roy Morgan consumer sentiment data for
the week ended Nov. 12, which will be watched a bit closely after the fall below
long-run average last week. 
     Tuesday 11:30 am AEDT (0030 GMT): National Australia Bank's business survey
for October to be released. Apart from conditions and confidence, data on the
retail sector and employment will be important.
     Wednesday 10:30 am AEDT (2330 GMT): Westpac-Melbourne Institute to release
consumer sentiment index for November. The risk is that sentiment will fall
below 100 again given reports of more slowing in the housing market and the
RBA's worries about wage growth, which would likely offset the positive from the
rising share market.
     Wednesday 11:30 am AEDT (0030 GMT): Wage data for the third quarter to be
released by the Australian Bureau of Statistics. The MNI median forecast is for
a slightly acceleration to +0.6% q/q and +2.2% y/y from +0.5% and +1.9% in the
second quarter, due mainly to the effect of rise in the minimum wage.
     Thursday 11:00 am AEDT (0000 GMT): Melbourne Institute to release inflation
expectations indices for November.
     Thursday 11:30 am AEDT (0030 GMT): Labor market data for October to be
released by the Australian Bureau of Statistics, with the expectation of another
month of jobs growth. The MNI median forecast is for a 21,000 increase in
employment, but the unemployment rate to remain stable at 5.5% and participation
rate at 65.2%.
     Monday, 9 am AEDT (2200 GMT): RBA Deputy Governor Guy Debelle to speak on
"Business Investment in Australia" at the 2017 UBS Australasia Conference in
     Wednesday, 6 pm AEDT (0700 GMT): RBA Assistant Governor (Economic) , to
give the Stan Kelly Lecture 2017 in Melbourne.
     It's a light week with no major data releases due. 
     No major data or event are due from the RBNZ. 
--MNI BEIJING Bureau; +1 202-371-2121; email:
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