Currency Updates:
AUD/USD Did little in the NYC time slot after a higher open, and continues to flop to either side of the 200 hma at .8763. US short rates collapsed on the back of dovish statements from various Fed officials at the weekend’s IMF meeting, most notably Vice Chair Stanley Fischer who sees no inflation on the horizon, and set the USD back across the board (except for GBP). Still plenty of willing sellers around in AUD as many fear the bigger move in risk assets is down, not up. The next 50 pips in AUDUSD is a coin toss but with Nikkei set to open down hard (futures -2.1% at 14,975)
EUR/USD opened NYC 1.2686, +56 pips vs Friday night’s close, O/N range 1.2621/98. NY session range 1.2665/99. Canada was closed and the US also was celebrating a national holiday, however stock markets & commodities were open giving FX markets something to trade off. US Treasuries traded higher as stocks slumped in early trade and the dollar got clocked early, the DXY having opened -0.54% but managed to claw back some 0.11% on the day. The Nasdaq whipped from -1.0% to +0.3% back to -0.8% and risk on / risk off tended to dominate FX. Comments from Weidmann Polish C/B chief Belka and earlier Greek political reports left NY traders edgy and reserve manager offers at 1.2700 rumored to be Russian intervention proceeds capped rallies.
USD/JPY Despite a feeble mid-day attempt to rally (along with stocks) USDJPY remained heavy under the weight of sharply lower US short rates and a weak Nikkei. Fed Vice Chair Stanley Fischer joined the chorus of worriers at the weekend’s IMF meeting, suggesting that rate hikes are further off than currently expected. Yen was quiet in NYC despite the fact that Nikkei futures are being hammered below 15k (-2.6%). Bulls are trying to hold 107.00, which was roughly where the pair was on Sep 17 when the Fed ratcheted up the Dot Plot and sent the USD on a run higher. Technical support in major equity indices is falling and will create a demand for yen as carry gets unwound.
Looking Ahead – Economic Data (GMT)
• 23:30 AU Consumer Sentiment Oct -4.6%-prev
• 23:50 JP Corp Goods Price MM* Sep f/c -0.1%, -0.2%-prev
• 23:50 JP Corp Goods Price YY* Sep f/c 3.6%, 3.9%-prev
• 00:30 AU NAB Business Conditions Sep 4-prev
• 00:30 AU NAB Business Confidence Sep 8-prev
• : CN FDI (YTD) Sep -1.8%-prev
Looking Ahead – Events, Other Releases (GMT)
• 22:30 AU RBA’s Debelle Speech at Investment Conference
• 23:15 NZ RBNZ Deputy Governor Spencer Speaks
