Oct 26, 2022
VOT Research Desk
Market Insights, Considerations & Analytics
Salient Components
Australia’s CPI comes in hotter than expected – in NZ inflation pressure remains ‘intense’
Australian headline CPI 1.8% q/q (expected 1.6%)
Australia: Inflation powers through 7%
Australian Treasurer Chalmers says expects inflation to peak at the end of the year
Reports that Universal Studios in Beijing has closed due to COVID restrictions
Offshore yuan (CNH) higher after PBOC set onshore yuan (CNY) stronger than estimate
BOJ bids to buy 150bn yen of 25+ year JGBs vs. 100bn planned
PBOC sets USD/ CNY reference rate for today at 7.1638 (vs. estimate at 7.1983)
Australia’s CPI comes in hotter than expected – in NZ inflation pressure remains ‘intense’
Australian headline CPI 1.8% q/q (expected 1.6%)
New Zealand ANZ business survey for October: Confidence: -42.7% & Activity: -2.5%
Japan data – September services PPI 2.1% y/y (expected 1.8%)
70% of Japan’s life insurers plan to cut holdings of foreign debt, mainly USTs
Japan MoF Kanda – watching for excessive, disorderly (yen) FX moves
Japanese authorities will welcome the weak US data overnight, less yen selling pressure
Morgan Stanley bullish on S&P500 despite expecting a “likely … sloppy earnings season”
UK PM Sunak to meet with fin min Hunt – to discuss tax hikes, spending cuts
South Korea Manufacturing outlook improves, services sector takes a hit though
NZD traders – note for your diary – RBNZ Governor Orr to speak in 24 hours
Goldman Sachs:
The Bank of Canada meeting is a close call, important implications for CAD
Trade ideas thread – Wednesday, 26 October 2022
Oil – private survey of inventory shows larger than expected headline build
The Bank of Japan is meeting later this week, the statement is due on Friday. Today the Bank bought more JGBs than they planned across the maturities curve. There is persistent chatter that the BOJ will abandon its YCC control policy. The policy is directed at 10 year JGBs, and the bank has been successful at keeping yields below their desired cap at this maturity. Meanwhile, though, higher yields have leaked across to other maturities, and have been doing so for months. Today’s action from the BOJ goes some way to addressing this inconsistency. It’ll be unlikely to resolve the higher yield issue for an extended period of time, but it does signal the Bank will not be dropping YCC this week.
USD/JPY has moved higher on the session.
