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FOREX: Dollar Off Highs Amid Firmer Onshore China Equities

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The USD BBDXY index sits higher in the first part of Monday trade. We were last near 1244.1, off earlier highs near 1245.05 though. Sentiment has largely focused on China stimulus plans following the weekend MOF briefing. There were lots of pledges from the briefing, but the market was arguably looking for more concrete details around fresh stimulus size. That may have to wait for the next China NPC meeting due later this month/early November. 

  • Both China and HK equity sentiment has been volatile, but at the break China onshore bourses are higher (CSI 300 up around 1.5%). HK markets are lower, but away from worst levels.
  • This has helped AUD and NZD push away from session lows. AUD/USD was last 0.6740 (earlier lows were at 0.6722), while NZD/USD was tracking near 0.6090/95 (lows printed at 0.6083).
  • Helping the A$ at the margins has been higher iron ore prices, as China real estate equity has outperformed. Less positive trends have been evident for gold and oil though.
  • Elsewhere, trends are leaning towards USD gains, but shifts are fairly modest at this stage. Japan markets are out today reducing JPY liquidity. USD/JPY was slightly higher in latest dealings, last near 149.30/35.
  • US TSY futures sit weaker but have largely tracked sideways since the open. US equity futures sit modestly in the red.
  • Looking ahead, the Fed’s Kashkari and Waller appear but there are no US data due to a holiday. BoE’s Dhingra also speaks.
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The USD BBDXY index sits higher in the first part of Monday trade. We were last near 1244.1, off earlier highs near 1245.05 though. Sentiment has largely focused on China stimulus plans following the weekend MOF briefing. There were lots of pledges from the briefing, but the market was arguably looking for more concrete details around fresh stimulus size. That may have to wait for the next China NPC meeting due later this month/early November. 

  • Both China and HK equity sentiment has been volatile, but at the break China onshore bourses are higher (CSI 300 up around 1.5%). HK markets are lower, but away from worst levels.
  • This has helped AUD and NZD push away from session lows. AUD/USD was last 0.6740 (earlier lows were at 0.6722), while NZD/USD was tracking near 0.6090/95 (lows printed at 0.6083).
  • Helping the A$ at the margins has been higher iron ore prices, as China real estate equity has outperformed. Less positive trends have been evident for gold and oil though.
  • Elsewhere, trends are leaning towards USD gains, but shifts are fairly modest at this stage. Japan markets are out today reducing JPY liquidity. USD/JPY was slightly higher in latest dealings, last near 149.30/35.
  • US TSY futures sit weaker but have largely tracked sideways since the open. US equity futures sit modestly in the red.
  • Looking ahead, the Fed’s Kashkari and Waller appear but there are no US data due to a holiday. BoE’s Dhingra also speaks.