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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FOREX: NZD Hits Multi Month Lows, Before Stabilizing with HK/China Stocks

FOREX
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The USD sits away from earlier highs, particularly against higher beta plays. Some rebound in HK/China equities ahead of a Housing Ministry/PBoC meeting tomorrow has aided sentiment. The USD BBDXY index was last 1248.8, after getting close to 1250 in early trade. 

  • NZD/USD weakness was an early focus point, after a slight downside miss for Q3 headline CPI in NZ. Implied rate cuts by the Feb meeting next year got close to 100bps post the print. RBNZ Assistant Governor Silk stated that the central bank has a lot of information to absorb before the Nov policy meeting. The headline inflation and core/non-tradable figures will be eyed closely.
  • For NZD we got  to lows of 0.6040 (levels last seen in mid August). We sit higher now last near 0.6060, but still off 0.35% for the session. Early equity sentiment was weighed down by tech concerns, but as HK and China rebounded broader sentiment stabilized somewhat.
  • AUD/USD sits back at 0.6695, after getting to lows of 0.6668. RBA Assistant Governor Hunter stated that inflation expectations have not become de-anchored. Metal commodities are higher, but gains are less than 1% at this stage/   
  • USD/JPY got to lows of 148.88 as BoJ board member Adachi spoke. He noted conditions are there for policy normalizations, but rate hikes must gradual and that financial conditions need to remain easy until inflation sustainably hits the 2% target. USD/JPY is back to 149.15/20, little changed for the session.
  • Equity trends outside of HK/China moves have mostly been negative. US futures do sit higher, but only up 0.10-0.20% at this stage. US yields sit close to unchanged.
  • Looking ahead we have UK inflation out, along with US trade prices. 
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The USD sits away from earlier highs, particularly against higher beta plays. Some rebound in HK/China equities ahead of a Housing Ministry/PBoC meeting tomorrow has aided sentiment. The USD BBDXY index was last 1248.8, after getting close to 1250 in early trade. 

  • NZD/USD weakness was an early focus point, after a slight downside miss for Q3 headline CPI in NZ. Implied rate cuts by the Feb meeting next year got close to 100bps post the print. RBNZ Assistant Governor Silk stated that the central bank has a lot of information to absorb before the Nov policy meeting. The headline inflation and core/non-tradable figures will be eyed closely.
  • For NZD we got  to lows of 0.6040 (levels last seen in mid August). We sit higher now last near 0.6060, but still off 0.35% for the session. Early equity sentiment was weighed down by tech concerns, but as HK and China rebounded broader sentiment stabilized somewhat.
  • AUD/USD sits back at 0.6695, after getting to lows of 0.6668. RBA Assistant Governor Hunter stated that inflation expectations have not become de-anchored. Metal commodities are higher, but gains are less than 1% at this stage/   
  • USD/JPY got to lows of 148.88 as BoJ board member Adachi spoke. He noted conditions are there for policy normalizations, but rate hikes must gradual and that financial conditions need to remain easy until inflation sustainably hits the 2% target. USD/JPY is back to 149.15/20, little changed for the session.
  • Equity trends outside of HK/China moves have mostly been negative. US futures do sit higher, but only up 0.10-0.20% at this stage. US yields sit close to unchanged.
  • Looking ahead we have UK inflation out, along with US trade prices.