- US Short-end tsys yields are edging higher and now trade at session highs, with investors cautious ahead of Jerome Powell's speech on the economic outlook later.
- The dollar juggernaut has rolled on, with the BBDXY making fresh cycle highs today. USD/JPY breached 156.00, with no sign of fresh verbal jawboning at this stage from the authorities.
- Australian jobs growth slowed, but the unemployment rate was steady, suggesting a still tight labour market.
- Looking ahead, the Fed’s Powell, Kugler, Barkin and Williams speak and US October PPI and jobless claims print. The ECB’s Lagarde, de Guindos and Schnabel appear and the October meeting account is published. Preliminary Q3 euro area GDP & employment and September IP are released.
MARKETS
- Short-end tsys yields are edging higher and now trade at session highs, with investors cautious ahead of Jerome Powell's speech on the economic outlook later. The curve has bear-flattened with the 2yr is +3.4bps at 4.32% still within the weekly highs made overnight of 4.367%, the 10yr is +2.4bps at 4.475% and now trading at May 31 highs.
- Tsys futures are lower although the short-end still trades with yesterday's ranges with TU -02½ at 102-20⅛, while TY is -06+ at 109-07, and has broken below yesterday's lows.
- The 10yr yield has now climbed 88bps since the September lows of 3.60%
- The 2s10s curve has flattened at touch to 15.355bps after reaching a high of 17.6bps overnight, while the 2s30s is last -1.3bps at 33.2bps although trades 18bps off Nov 12 lows.
- Short end rates outperformed as projected rate cuts into early 2025 gained vs. early Wednesday levels (*) : Dec'24 cumulative -20.8bp (-15.5bp), Jan'25 -27.7bp (-23.0bp), Mar'25 -41bp (-35.1bp), May'25 -57.6bp (-41.3bp).
- Investors will be watching a host of speeches from Fed officials later including Jerome Powell, Alberto Musalem, Thomas Barkin and Adriana Kugler.
- Focus turns to PPI & Jobless claims later today
JGBS: Futures Near Session Lows, US PPI & Claims Data Due, Q3 GDP Tomorrow
JGB futures are holding weaker and near Tokyo session lows, -12 compared to settlement levels.
- Outside of the previously outlined weekly international investment flows, there hasn't been much by way of domestic drivers to flag.
- BOJ Deputy Governor Shinichi Uchida said the nation’s financial system has been maintaining stability with banks having sufficient capital bases and stable funding.
- Cash US tsys are 2-3bps cheaper in today’s Asia-Pac session after yesterday’s twist-steepening. The US calendar sees PPI and jobless claims data later today.
- Cash JGBs have bear—steepened across benchmarks beyond the 1-year (+3.1bps), with yields flat to 3bps higher. The benchmark 10-year yield is 1.1bps higher at 1.061% versus the cycle high of 1.108%.
- The yield on the 30-year JGB rose as high 2.312% today, its highest level since March 2010. This came despite yesterday’s supply being comfortably absorbed. The 30-year auction saw the low price beat dealer expectations and the cover ratio edge up to 3.4353x from 3.3438x. However, the auction tail did lengthen.
- Swap rates are flat to 5bps higher, with a steeper curve. Swap spreads are mixed.
- Tomorrow, the local calendar will see Q3 GDP, Industrial Production, Capacity Utilization and Tertiary Industry Index data alongside 5-year supply.
JAPAN DATA: Offshore Investors Continue To Buy Local Stocks
Japan's weekly investment flow update saw offshore buying continue of local stocks. This marked the seventh straight week of net buying in this space. Still since early August, cumulative flows remain negative to the tune of nearly -¥4trln. Price action in Japan equities has been range bound, with the Nikkei largely stuck in a 38000-40000 range in recent weeks.
- In terms of bonds, offshore investors sold local bonds for the second straight week, but aggregate amounts have been fairly modest in the past month for this segment.
- After last week's record net selling of offshore bonds by local investors, we saw some net buying flows return. This only modestly offsets the prior week's outflows though. Since late Oct we have seen a net selling trend persist most weeks.
- Local investors also sold offshore equities for the fifth straight week, bringing cumulative net selling to -¥3trln over this period.
Table 1: Japan Offshore Weekly Investment Flows
| Billion Yen | Week ending Nov 8 | Prior Week |
| Foreign Buying Japan Stocks | 513.9 | 153.2 |
| Foreign Buying Japan Bonds | -308.6 | -43.6 |
| Japan Buying Foreign Bonds | 1724.6 | -4457.9 |
| Japan Buying Foreign Stocks | -922.1 | -1173.6 |
Source: MNI - Market News/Bloomberg
AUSSIE BONDS: Twist-Steeper After Jobs Data, Focus On US PPI & Claims Data
ACGBs (YM flat & XM -3.0) are holding a bear-steepening after today’s employment report for October.
- It is not surprising that after five consecutive months of more than 30k new jobs, there would be payback at some point, especially in a month that includes school holidays. Employment in October printed below expectations at +15.9k with September revised down to 61.3k but the unemployment rate was steady at 4.1%. A tight labour market is consistent with the RBA on hold.
- MI consumer inflation expectations are heading in the right direction with the November reading moderating 0.2pp to 3.8%, the lowest since the pandemic-impacted February 2021.
- Cash US tsys are 2-3bps cheaper in today’s Asia-Pac session after yesterday’s twist-steepening. The US calendar sees PPI and jobless claims data later today.
- Cash ACGBs are 1bp lower to 3bps cheaper with the AU-US 10-year yield differential at +22bps.
- Swap rates are flat to 3bps lower, with the 3s10s curve steeper.
- The bills strip is mostly richer, with pricing -1 to +2.
- RBA-dated OIS pricing is 1-3bps softer across 2025 meeting. A 25bps rate cut is not fully priced until August.
- Tomorrow, the local calendar is empty apart from the AOFM’s planned sale of A$700mn of the 4.75% 21 April 2027 bond.
AUSTRALIA DATA: Trends Show Labour Market Remains Tight
It is not surprising that after five consecutive months of more than 30k new jobs, that there would be payback as some point, especially in a month that includes school holidays. Employment in October printed below expectations at +15.9k with September revised down to 61.3k but the unemployment rate was steady at 4.1%. The details continue to show a tight labour market with some indicators stabilising, consistent with the RBA on hold.
Australia employment vs hours worked y/y%
- The unemployment rate printed at 4.1% for the third straight month and remains below the RBA’s 4.3% forecast for Q4 2024.
- The stable unemployment, including for under 25s, and underemployment rates plus record high employment/population, solid 3-month momentum in both full-time (FT) and part-time (PT) employment & hours worked point to continued labour market tightness. In the year to October, 388.9k new jobs were created up from 379.6k YTD 2023.
- Again employment didn’t keep up with the rise in the labour force at 15.9k vs 24.2k. This trend has driven the number of unemployed higher which is now up 66.5k on a year ago but down from September’s 90.6k.
- Employment growth slowed to 2.7% y/y from 3.1% but there were unfavourable base effects around September/October 2023.
- FT jobs rose 9.7k after 48.8k to be up 2.4% y/y and PT +6.2k after 12.5k to be +3.4% y/y. PT employment appears to be slowing but momentum remains robust.
- Working-age population growth appears to have stabilised around 2.5% y/y after 3% in Q3 2023, while the labour force rose 3.1% y/y in October.
Australia employment full-time vs part-time y/y%
AUSTRALIA: Stabilisation Of Labour Indicators Continued In October
In its November statement, the RBA said “labour market conditions remain tight” and that while it is “easing gradually”, “some indicators have recently stabilised”. In this list, it included youth unemployment, underemployment and hours worked. The October data confirmed this viewpoint and adds to the case to leave policy on hold for now. With the unemployment rate starting Q4 at 4.1%, there is also the chance that the RBA’s 4.3% forecast will be revised down.
- The underemployment rate fell 0.1pp to 6.2% in October to be down 0.2pp on a year ago and the lowest since April 2023. The 3-month average has been trending down over 2024.
- The RBA sees the youth unemployment rate as a lead indicator of the labour market and while it is still 2.1pp higher than its July 2022 trough, it also appears to have stabilised at around 9.1% after 9.9% in August.
Australia unemployment rate 15-24yrs %
- Hours worked rose 0.1% m/m, the slowest since May, but through the volatility they grew by 2.5% y/y after 2.4% in September and 3-month annualised momentum picked up to 4.2% from 3.4% with both full-time and part-time seeing a rise.
- Vacancies have been normalising but remain elevated with internet vacancies/unemployment picking up again in August/September and SEEK applicants/job stabilising. But Q3 ABS vacancies fell 5.2% q/q with the ratio to unemployed falling almost 5pp.
- RBA Governor Bullock said today that skilled labour shortages are still a problem in some sectors. The NAB business survey measure has also stabilised.
Australia hours worked %
AUSTRALIA DATA: Inflation Expectations Below 4%
Australian Melbourne Institute consumer inflation expectations are heading in the right direction with the November reading moderating 0.2pp to 3.8%, the lowest since the pandemic-impacted February 2021 and they were trending higher at that point. After struggling to break below 4%, expectations now appear to be trending lower. They peaked at 6.7% in June 2022, the month after the first hike this cycle, and started 2024 at 4.5%. Headline inflation at 2.8% in Q3, despite its temporary nature, and lower petrol prices plus the RBA’s resoluteness have likely helped to bring inflation expectations down below 4%.
Australia CPI y/y% vs MI consumer inflation expectations y/y%
AUSTRALIA: Housing Market Very Tight But Tentative Signs Of Easing
Housing affordability remained close to a series low in Q3 despite unchanged mortgage rates as home prices continued to rise. The impact of this can be seen in slower growth in the value of new loans for first time home buyers. The lack of available supply is also affecting these variables with new homes sold declining. Supply, affordability and rents are likely to be major election issues in 2025.
- Our housing affordability index remained around 44% below trend in Q3, which is very low but appears to be stabilising, consistent with the HIA’s index, with slower rises in house price inflation, steady mortgage rates and rising disposable incomes.
- CoreLogic capital city home values rose 1.3% q/q in Q3 to be up 7.4% y/y down from 9.7% in Q2. October rose 0.3% m/m to be up 6.2% y/y after 6.9% y/y but still 24% above trend. The moderation is being driven by Melbourne with home values down 1.9% y/y, while Sydney has eased to 3.7% y/y from 12.3% in January.
- Rental growth remained elevated at 6.7% y/y in Q3 but has been gradually trending lower since the 7.8% y/y peak in Q1 2024. Housing remains overvalued in terms of the ratio of prices-to-rents but that is moderating too.
- September capital city new home sales fell 3.2% y/y 3-month moving average after +4.9% in August. They rose 0.1% m/m but had fallen the previous four months.
- Building approvals for houses are recovering and are 12.4% above December 2019 but dwellings ex houses are lagging and are still 35.6% below. 3-month momentum for both is in double digits though, so hopefully the outlook is improving for a supply pickup.
- On the demand side, working age population growth has slowed to 2.5% y/y from a 3% peak.
- Overall home loan value growth has been robust for both owner-occupiers and investors, but slowing for first time home buyers.
Australia housing affordability vs valuation % deterioration from trend
Source: MNI - Market News/Refinitiv
Australia CPI rents vs CoreLogic home values y/y%
Source: MNI - Market News/Refinitiv
NZGBS: Closed With A Twist-Steepening As US Tsys Weigh
NZGBs closed with a twist-steepening of the 2/10 curve. Benchmark yields finished 4bps lower to 4bps higher, with the NZ-US and NZ-AU 10-year yield differentials little changed.
- Cash US tsys are 2-3bps cheaper in today’s Asia-Pac session after yesterday’s twist-steepening. The US calendar sees PPI and jobless claims data later today.
- Today’s weekly supply saw mixed results, with cover ratios ranging from 2.28x (May-35) to 4.12x (Apr-37).
- NZ released a number of monthly CPI series for October which account for around 40% of the total CPI index. Most major components posted a monthly rise but food prices posted their first drop since May, leaving the annual rate at 1.2%.
- With rental growth down on a year ago, food steady and petrol negative, the RBNZ is likely to be reassured that inflation should stay in the band in Q4. It will have updated forecasts at its November 27 meeting.
- Swap rates closed 2bps lower to 2bps higher, with the 2s10s curve steeper.
- RBNZ dated OIS pricing is 1-7bps softer across 2025 meetings. A cumulative 87bps of easing is priced by February, with 51bps by year-end.
- Tomorrow, the local calendar will see the BusinessNZ Manufacturing PMI.
NEW ZEALAND: Food Inflation Steady, Rents Easing, Petrol Still Negative
NZ released a number of monthly CPI series for October which account for around 40% of the total CPI index. Most major components posted a monthly rise but food prices posted their first drop since May, leaving the annual rate at 1.2%. With rental growth down on a year ago, food steady and petrol negative, the RBNZ is likely to be reassured that inflation should stay in the band in Q4. It will have updated forecasts at its November 27 meeting.
- Food prices fell 0.9% m/m in October driven by a 7.2% decline in vegetables while fruit rose 0.6%. Excluding fresh fruit & veg they fell 0.5% m/m to be up 2.7% y/y after 2.8% in September, with restaurants and groceries driving the positive annual result.
- The moderation in rental growth remains concentrated in new contracts, which fell to +0.7% y/y from 1.2%, but there is some relief for existing tenants too with rents up 4.2% y/y in October down from the 4.6% peak in May. They both rose slightly on the month in October.
- Alcohol & tobacco prices increased 0.6% m/m to be up 5.4% y/y moderating from 6.1% in September driven by tobacco.
- Petrol prices were flat last month and down 13.9% y/y after -14.9% y/y.
- Domestic air travel rose 2.6% m/m to be up 2.4% y/y following -9.6% y/y. while international stayed soft falling 0.4% m/m and -2.8% y/y but up from -9.7% y/y.
- Accommodation services posted their third large straight monthly rise in prices, which is likely seasonal, but the annual rate was steady at 5.2% y/y.
NZ monthly inflation y/y%
FOREX: USD Juggernaut Rolls On, US PPI Up Later
The USD juggernaut rolls on, with the BBDXY index trending towards 1287 at the time of writing. This is fresh highs in the index back to Nov 2022.
- Firmer yields continue to underpin dollar strength. US benchmark Tsy yields are 2-3bps higher, led marginally by the front end. The 10yr yield is near 4.48%, fresh highs back to early July.
- This has weighed on the yen, with USD/JPY breaching the 156.00 handle. We are down around 0.40% in yen terms. SO far today, we haven't seen any fresh rhetoric from the Japan authorities around FX weakness. As we noted earlier, the continued rise in US yields and less short positioning in yen (compared to earlier in the yen) may blunt any intervention effectiveness in the near term.
- Focus could rest on 156.67, a projection level, while 157.86 was the July 19 high.
- AUD/USD is down close to 0.25%, last near 0.6465/70. This is fresh lows back to the intra-session sell off on Aug 5. Employment figures showed a slowdown in jobs growth but a steady unemployment rate.
- NZD/USD is closer to intra-session Aug 5 lows (0.5850), last near 0.5860. Earlier data showed mixed Oct inflation trends, but the RBNZ is still likely to be confident of the 1-3% inflation target being maintained in Q4.
- EUR/USD is back under 1.0550, fresh lows back to Nov last year.
- In the equity space, US equity futures are down a touch. In the regional Asia Pac space, trends are mixed. China and Hong Kong markets are lower, but losses are less than 1% at this stage. Japan and Australian markets are higher.
- Looking ahead, the Fed’s Powell, Kugler, Barkin and Williams speak and US October PPI and jobless claims print. The ECB’s Lagarde, de Guindos and Schnabel appear and the October meeting account is published. Preliminary Q3 euro area GDP & employment and September IP are released.
JPY: Yen Weakens 7% Last 3 months, Other Factors Question Intervention Merits
USD/JPY sits off session highs albeit modestly. The pair last near 155.85/90, against earlier highs of 156.06, levels last seen in late July. So far we haven't heard any fresh verbal jawboning from the authorities around FX. With the pair at fresh multi month highs we wouldn't be surprised to see fresh rhetoric pick up, although language used last week was already an upgrade: adding the word "extremely" to the phrasing "We are watching developments [...] with an extremely high sense of urgency".
- Current spot levels are close to April intervention levels in USD/JPY, although sub the +160 intervention levels from early July. We are clearly above 2022 intervention levels from a spot standpoint.
- In terms of rate of change, the first chart below plots the rolling 1 month and 3 month rates of change for USD/JPY, along with vertical bars to represent intervention episodes. The 3 month rate of change is above 7%, which is levels we got to in April of this year. We also got close to this threshold in July. In 2022 levels were more elevated but obviously spot was lower. The 1 month rate of change sits close to earlier intervention level thresholds for 2024.
- Still, there may be some considerations for the authorities around intervention success at the current juncture.
- The rapid move higher in US yields amid the Trump related reflation trade is pushing US-JP yield differentials higher. USD/JPY may have run too high relative to such trends, but the directional correlation remains strong.
- The other factor is market positioning. At least per CFTC data, yen leveraged shorts and aggregate ones (including asset managers) are above recent lows, particularly for 2024, see the second chart below.
Fig 1: USD/JPY Rates Of Change & Intervention Episodes
Source: MNI - Market News/Bloomberg
Fig 2: Yen Shorts Not As Extreme As Earlier In 2024
Source: MNI - Market News/Bloomberg
ASIA STOCKS: Asian Equities Edge Lower, Semiconductor Stocks Struggle
Asian equities are mixed today, the MSCI Asia Pacific is 0.40i% lower although it has been a quiet session with ranges tight. Japan, South Korea & Australian equities have edged up slightly higher driven by expectations that the Fed may lower interest rates in December after US inflation data aligned with forecasts. China, Hong Kong & Taiwan equities continue to struggle following announcement from Trump he will be appointing people critical of China to key government positions. On the data front, the focus was on Australian employment data which came in below expectations ending 5 consecutive months of more than 30k new jobs.
- Hong Kong shares slid amid thin volumes as the market stayed open despite signs of severe weather. Shares of Tencent Holdings rose as much as 2.8% after the Chinese tech giant posted better-than-expected earnings. Hong Kong & China Property stocks initially rose after the government announced measures including tax cut for homebuyers and developers, however pared gains with major benchmarks now lower, Mainland Property Index -2.25%, CSI 300 Real Estate Index -0.50%, BBG China Property Developer Gauge is -1.80%.
- Asia semiconductor shares continues to sell-off as investors concern grow on the sector’s outlook after Trump’s win. TSMC -0.50%, SK Hynix -5%, Hon Hai -0.50%, Tokyo Electron is 3.50% lower after Wednesday jump higher following strong earnings, while Samsung is 1.20% higher after hitting four-year lows on Wednesday.
- Foreign investors continue to sell South Korean equities, in particular Samsung which has seen -$520m of outflows. There has however been buying across Services, Transport & Machinery stocks, the KOSPI has seen net outflows of -$178m so far today.
- Japan's TOPIX +0.40%, Nikkei +0.10%. Hong Kong's HSI -0.9%, China's CSI 300 -0.30%. South Korea's KOSPI +0.50%. Taiwan's Taiex -0.35%. Australia's ASX200 +0.50%.
ASIA STOCKS: Foreign Investors Continue Selling Asia Tech Stocks
Taiwan saw another large outflow on Wednesday, while Foreign investors were large sellers of Samsung with the stock hitting four year lows.
- South Korea: Recorded outflows of -$451m yesterday, with a 5-day total of -$911m. YTD flows remain positive at +$6.156b. The 5-day average is -$182m, worse than the 20-day average of -$164m and the 100-day average of -$97m.
- Taiwan: Posted outflows of -$1.350b yesterday, totaling -$2.448b over the past 5 days. YTD flows remain negative at -$14.122b. The 5-day average is -$490m, worse than the 20-day average of -$133m and the 100-day average of -$182m.
- India: Experienced inflows of +$337m Tuesday, with a 5-day outflow of -$1.236b. YTD flows are negative at -$2.413b. The 5-day average is -$247m, better than the 20-day average of -$307m but worse than the 100-day average of +$4m.
- Indonesia: Posted outflows of -$44m yesterday, bringing the 5-day total to -$456m. YTD flows remain positive at +$2.025b. The 5-day average is -$91m, worse than the 20-day average of -$40m but better than the 100-day average of +$20m.
- Thailand: Recorded inflows of +$5m yesterday, with a total outflow of -$100m over the past 5 days. YTD flows are negative at -$3.606b. The 5-day average is -$20m, slightly better than the 20-day average of -$22m but worse than the 100-day average of -$7m.
- Malaysia: Experienced outflows of -$11m yesterday, contributing to a 5-day outflow of -$147m. YTD flows are positive at +$250m. The 5-day average is -$29m, worse than the 20-day average of -$16m but better than the 100-day average of +$3m.
- Philippines: Saw outflows of -$20m yesterday, with net outflows of -$151m over the past 5 days. YTD flows remain negative at -$141m. The 5-day average is -$30m, worse than the 20-day average of -$11m but better than the 100-day average of +$4m.
Table 1: EM Asia Equity Flows
OIL: Crude Lower But In A Narrow Range Ahead Of US EIA Data & IEA Report
Oil prices have been range trading during today’s APAC session but are slightly lower as the US dollar continues to strengthen (USD BBDXY +0.1%) and the market is edgy ahead of Friday’s China October data dump. Brent is down 0.4% to $72.01/bbl, close to the intraday low, while WTI is 0.5% lower at $68.11/bbl.
- The market has worried about China’s demand for some time, as it has been the world’s largest crude importer, but the US EIA said in its report this week that India is now the largest consumer in Asia. A soft economy and increased EV use has reduced China’s demand.
- Bloomberg reported that US crude inventories fell 800k barrels last week, according to people familiar with the API data. Cushing saw a 1.9mn drawdown, while gasoline rose 300k and distillate 1.1k. The official EIA data is out later today.
- The IEA’s monthly report is also published today. It has been more pessimistic on the market outlook than OPEC and has been expecting a surplus in 2025 for some time.
- Later the Fed’s Powell, Kugler, Barkin and Williams speak and US October PPI and jobless claims print. The ECB’s Lagarde, de Guindos and Schnabel appear and the October meeting account is published. Preliminary Q3 euro area GDP & employment and September IP are released.
Gold is 0.5% lower in today’s Asia-Pac session, after closing 1.0% lower at $2572.98 on Wednesday. This came as the US dollar posted further gains, despite the softer-than-expected US supercore CPI inflation data.
- US Treasuries reversed course following in-line October CPI inflation data. The probability of a 25bp cut next month leapt to more than 80% from shy of 60% the previous session.
- US curves twisted steeper, with the 2-year yield finishing down 6bps versus a 2bp rise for the 10-year.
- Core CPI was exactly as expected at 0.35%, and basically unchanged from September (0.35%). However, supercore (core services ex housing) came in on the soft side at 0.31% vs 0.39% expected and 0.40% prior.
- Fed Musalem said he supports further interest rate cuts if inflation keeps falling, but added the risks that it doesn't have risen as the labour market stays healthy.
- Lower rates are typically positive for gold, which doesn’t pay interest.
- According to MNI’s technicals team, the latest pullback in gold appears to be corrective, but the recent weakness has brought the yellow metal below the 50-day EMA, at $2,642.0, signalling scope for a deeper retracement towards $2,547.0 the Sep 18 low.
CHINA: Data Preview: Forecasts Point to Pick up in Activity.
- Tomorrow sees the release of two key activity data in Industrial Production and Retail Sales.
- Since September the authorities have released a variety of measures aimed at stabilizing the economy and early indications are that tomorrow’s data will show signs that it is working.
- Forecasters are predicting that October’s Industrial Production will rise by +5.6% YoY, the biggest increase since May.
- The China Official Manufacturing PMI expanded in October for the first time since April with the output component the main contributor and steel output turning positive.
- Additionally, October’s Retail Sales are forecast to rise by +3.8% from 3.2% in September.
- China Official PMI Services crept into expansion for October and various high frequency indicators have turned positive also. The stimulus measures are aimed at stabilizing the economy and hence will take time to show up in the date.
- Should the forecasts be correct, authorities will be satisfied that the early signs are that confidence is returning.
CHINA: Housing Price Data Preview: Looking for Stability.
- Tomorrow sees the release of two key data points for the housing market, the month on month change in New and Used Home Prices
- Prices for both have declined consistently since early 2023, with the trend beginning in 2018.
- The housing market decline in recent years has brought the broader economy with it, resulting in the various stimulus measures announced since September.
- During and following the national holidays in October, China’s residential home sales jumped 73% for October compared to the previous month, with the value of new home sales rising 7.1%.
- It may be less likely that tomorrow's data will see a return to positive, however authorities will be looking for signs that the various stimulus measures are halting the price declines.
ASIA FX: CNH & KRW Lower, But Outperform Broader USD Gains
USD/CNH has hit fresh multi month highs, despite another much stronger than expected CNY fixing outcome. We got close to 7.2600 but sit slightly lower now. CNH is off around 0.15% at this stage, so outperforming broader USD trends against the majors, with the yen off close to 0.35%.
- Late July highs in the pair were near 7.2760, which may be an upside target. It's clear though with the fixing bias that the authorities are trying to slow the pace of yuan depreciation. Next week we will also see yuan bills issues in Hong Kong, which may weigh on liquidity and make short CNH less appealing.
- Spot USD/KRW has largely been range bound, albeit with slight upside bias. The pair was last near 1406. Onshore equities are higher away from best levels. The FinMin was on the wires stating that the authorities will take steps to stabilize FX markets if needed. Recent highs in USD/KRW at 1410.65 remain intact.
- USD/TWD spot has pushed higher, rising nearly 0.40% to 32.55/60, fresh highs in the pair back to the first half of August. The CBC stated TWD has been rather stable though. Hence there doesn't appear to be a great deal of concern around recent weakness. Since the US election the TWD has lost close to 1.9%, around mid range from a EM Asia FX standpoint.
ASIA FX: THB & MYR Down Nearly 1%, IDR Weaker, But BI Prepared To Intervene
In South East Asia (SEA) FX, we have USD outperformance, as markets play catch up with continued USD gains. Compared to North East Asia, we have seen slightly largely USD losses for some currencies in the past weak. Less central bank push back or rhetoric may be in play.
- USD/THB crested above 35.00 earlier and is holding above this level currently. This is around 0.95% weaker in baht terms for the session and levels last seen in mid August. We suspect some parts of the Thailand government will be happy, given onshore calls for a weaker FX. BoT may not be too concerned either given the low inflation/growth backdrop. A short while ago, data on consumer confidence edged up for Oct. The headline measure rose to 56.0, the first gain since Feb this year.
- USD/MYR is up by close to the same amount as USD/THB in percentage terms, the pair closing in on 4.4900. Like USD/THB we are also in overbought conditions. The RSI (14) is at +75.
- Spot USD/IDR has broken above earlier Nov highs, last near 15880/85, also back to mid August levels. A BI official has been on the wires (RTRS), stating that the CB would take measures to stabilize the FX, including intervention. They did note the relative recent outperformance from the IDR though.
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 14/11/2024 | 0700/0800 | *** |  SE | Inflation Report |
| 14/11/2024 | 0800/0900 | *** |  ES | HICP (f) |
| 14/11/2024 | 0830/0930 |  EU | ECB's De Guindos remarks at event organised by ABC and Deloitte | |
| 14/11/2024 | 1000/1100 | *** |  EU | GDP (p) |
| 14/11/2024 | 1000/1100 | ** |  EU | Industrial Production |
| 14/11/2024 | 1200/0700 |  US | Fed Governor Adriana Kugler | |
| 14/11/2024 | 1230/1330 |  EU | Publication of the ECB MonPol meeting account | |
| 14/11/2024 | - |  GB | Rachel Reeves’ debut Mansion House dinner speech as chancellor | |
| 14/11/2024 | 1300/1300 |  GB | BOE's Mann at Revitalising the global economy event | |
| 14/11/2024 | 1330/0830 | *** |  US | Jobless Claims |
| 14/11/2024 | 1330/0830 | *** |  US | PPI |
| 14/11/2024 | 1415/0915 |  US | Richmond Fed's Tom Barkin | |
| 14/11/2024 | 1530/1030 | ** |  US | Natural Gas Stocks |
| 14/11/2024 | 1600/1100 | ** |  US | DOE Weekly Crude Oil Stocks |
| 14/11/2024 | 1630/1130 | * |  US | US Bill 08 Week Treasury Auction Result |
| 14/11/2024 | 1630/1130 | ** |  US | US Bill 04 Week Treasury Auction Result |
| 14/11/2024 | 1830/1930 |  EU | ECB's Schnabel in panel on "Reassessing policy tools" | |
| 14/11/2024 | 1900/1400 | *** |  MX | Mexico Interest Rate |
| 14/11/2024 | 2000/1500 |  US | Fed Chair Jerome Powell | |
| 14/11/2024 | 2100/2100 |  GB | BOE's Bailey speech at Mansion House | |
| 14/11/2024 | 2115/1615 |  US | New York Fed's John Williams | |
| 15/11/2024 | 2350/0850 | *** |  JP | Japan GDP 1st Estimate |
| 15/11/2024 | 0200/1000 | *** |  CN | Fixed-Asset Investment |
| 15/11/2024 | 0200/1000 | *** |  CN | Retail Sales |
| 15/11/2024 | 0200/1000 | *** |  CN | Industrial Output |
| 15/11/2024 | 0200/1000 | ** |  CN | Surveyed Unemployment Rate M/M |
| 15/11/2024 | 0430/1330 | ** |  JP | Industrial Production |
| 15/11/2024 | 0700/0800 | ** |  SE | Unemployment |
| 15/11/2024 | 0700/0700 | ** |  GB | UK Monthly GDP |
| 15/11/2024 | 0700/0700 | *** |  GB | GDP First Estimate |
| 15/11/2024 | 0700/0700 | ** |  GB | Index of Services |
| 15/11/2024 | 0700/0700 | *** |  GB | Index of Production |
| 15/11/2024 | 0700/0700 | ** |  GB | Output in the Construction Industry |
| 15/11/2024 | 0700/0700 | ** |  GB | Trade Balance |
| 15/11/2024 | 0730/0730 |  GB | DMO to publish FQ4 (Jan-Mar) gilt operations calendar | |
| 15/11/2024 | 0745/0845 | *** |  FR | HICP (f) |
| 15/11/2024 | 0800/0900 | * |  CH | CH Flash GDP |
| 15/11/2024 | 0900/1000 | ** |  IT | Italy Final HICP |
| 15/11/2024 | 1330/0830 | ** |  US | Import/Export Price Index |
| 15/11/2024 | 1330/0830 | ** |  CA | Monthly Survey of Manufacturing |
| 15/11/2024 | 1330/0830 | ** |  CA | Wholesale Trade |
| 15/11/2024 | 1330/0830 | ** |  US | WASDE Weekly Import/Export |
| 15/11/2024 | 1330/0830 | *** |  US | Retail Sales |
| 15/11/2024 | 1330/0830 | ** |  US | Empire State Manufacturing Survey |