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FOREX: Firmer China Equities Help NZD & A$, Yen Back near Early Aug Lows

FOREX
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The USD BBDXY index sits off its recent highs, albeit marginally. The index last near 1243.75. Intra-session highs from Wednesday trade came close to 1244.5, which was fresh highs back to mid August and a test above the 200-day EMA. 

  • A slight USD pull back today has been aided by the better China/HK equity tone. The PBoC announced it has opened applications for a swap facility that is aimed at supporting local equity markets. The scheme was originally announced on Sep 24. However, it could be expanded beyond the initial size of CNY 500bn and broadened in terms of acceptable collateral as well (per onshore media).
  • The CSI 300 is up 2.85%, while the HSI in HK is up over 4% at this stage.
  • NZD/USD is outperforming in the G10 space, up around 0.40%, putting the pair last near 0.6085/90. We are still sub pre RBNZ levels from yesterday of 0.6135.
  • AUD/USD is also higher, but lagging NZD at the margins, the pair last near 0.6735. Inflation expectations fell to a multi year low of 4.0%y/y earlier.
  • Yen has faltered modestly. USD/JPY unable to breach 149.00 on the downside, the pair is tracking just under session highs (149.55), last near 149.45.Upside targets will now rest above 150.00 (150.76 50.0% retracement of the Jul 3 - Sep 16 bear leg).
  • Earlier data showed firmer than expected PPI for Sep in Japan but this did not give a lasting boost to JPY sentiment.
  • Coming up we will hear from a BoJ official in Tokyo at a BBG function. Also the RBA's Assistant Governor Hunter will appear on a panel session. Later on we have the US CPI print and more Fed speak in focus. 
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The USD BBDXY index sits off its recent highs, albeit marginally. The index last near 1243.75. Intra-session highs from Wednesday trade came close to 1244.5, which was fresh highs back to mid August and a test above the 200-day EMA. 

  • A slight USD pull back today has been aided by the better China/HK equity tone. The PBoC announced it has opened applications for a swap facility that is aimed at supporting local equity markets. The scheme was originally announced on Sep 24. However, it could be expanded beyond the initial size of CNY 500bn and broadened in terms of acceptable collateral as well (per onshore media).
  • The CSI 300 is up 2.85%, while the HSI in HK is up over 4% at this stage.
  • NZD/USD is outperforming in the G10 space, up around 0.40%, putting the pair last near 0.6085/90. We are still sub pre RBNZ levels from yesterday of 0.6135.
  • AUD/USD is also higher, but lagging NZD at the margins, the pair last near 0.6735. Inflation expectations fell to a multi year low of 4.0%y/y earlier.
  • Yen has faltered modestly. USD/JPY unable to breach 149.00 on the downside, the pair is tracking just under session highs (149.55), last near 149.45.Upside targets will now rest above 150.00 (150.76 50.0% retracement of the Jul 3 - Sep 16 bear leg).
  • Earlier data showed firmer than expected PPI for Sep in Japan but this did not give a lasting boost to JPY sentiment.
  • Coming up we will hear from a BoJ official in Tokyo at a BBG function. Also the RBA's Assistant Governor Hunter will appear on a panel session. Later on we have the US CPI print and more Fed speak in focus.