Geopolitics Remain At The Fore

Taiwan dollar is slightly stronger on the session but holding most of yesterday's loss. The rate last changing hands at 29.9545.

• Data yesterday showed CPI rose 2.63% in September, above estimates of 2.3%; core CPI rose 1.74% against consensus of 1.50%, wholesale prices rose 11.96%. The prints denote the fastest pace of inflation since 2013, the statistics department said the main drivers were fruit and vegetables, transportation and fuel costs.
• On the geopolitical front Taiwan's president Tsai spoke late yesterday and urged China to exercise restraint and avoid accidentally sparking a conflict after China's frequent incursions in the past few days. He added that China's actions have damaged regional stability.
• Looking ahead trade balance figures are due tomorrow. CBC Gov Yang spoke last week and touched on Taiwan's status as a currency manipulator, he noted that Taiwan will remain in enhanced bilateral talks with US Treasury. A soaring trade surplus means Taiwan is likely to stay on the watchlist when the next report is released. The US refrained from labelling Taiwan a manipulator at its most recent report in April, but the current account surplus has continued to rise since then. Central Bank interventions have been reduced though, TWD is Asia's top performer this year as a result.