Asia equity markets traded with marginally positive following a similar picture in US where S&P 500, DJIA and Nasdaq 100 extended on record levels, in which the DJIA briefly surmounted the 23,000 milestone for the 1st time ever. The mild momentum from the historical feat in US carried over to Asia which saw ASX 200 (+0.1%) briefly above 5,900 and at its highest in almost 6 months, while Nikkei 225 (+0.1%) also eked minor gains. Hang Seng (Unch) and Shanghai Comp. (+0.3%) were kept afloat after a continued substantial liquidity operation by the PBoC, although upside was capped as focus remained on the 19th CPC National Congress which opened today. Finally, 10yr JGBs were flat amid a lack of drivers and with demand restricted by a mildly positive tone in Japan and a tepid BoJ Rinban announcement for JPY 400bln of JGBs.

Chinese President Xi delivered address at the opening of the 19th CPC National Congress in which he said China will continue to reduce overcapacity and that China will deepen interest rate and FX reform. President Xi also commented that China will lower barriers of entry for foreign businesses and that GDP is to increase to CNY 80tln from CNY 54tln over the next half-decade. (Newswires)

PBoC injected CNY 160bln via 7-day reverse repos and CNY 140bln via 14-day reverse repos. (Newswires)

PBoC set CNY mid-point at 6.5991 (Prev. 6.5883)


UK Avg Earnings (Ex-Bonus) (Aug) 2.1% vs. Exp. 2.0% (Prev. 2.1%, Rev. 2.2%)

UK Claimant Count Unem Chng (Sep) 1.7k vs. Exp. 1.0k (Prev. -2.8k, Rev. -0.2k)

UK Avg Wk Earnings 3M YY (Aug) 2.2% vs. Exp. 2.1% (Prev. 2.1%, Rev. 2.2%)

UK ILO Unemployment Rate (Aug) 4.3% vs. Exp. 4.3% (Prev. 4.3%)

Spain is said to be planning to govern Catalonia from Madrid. (Newswires)

ECB's Hansson stated that economic optimism may warrant small monetary alterations. (Newswires)


EU bourses relatively directionless this morning with the EuroStoxx 50 up 0.05%. Focus this morning has been on the latest batch of earnings releases, particularly from the some of the Dutch large caps, with Akzo Nobel announcing a second profit warning this year, while ASML Holding also announced a weak earnings update.


EGBs softer across the board, the belly of the German curve noticeably underperforming with the yield up 2bps. Focus will be on the German auction in the long-end.


USD: The dollar index caught a bid overnight and throughout the morning session, trading back above 93.50. This comes off the back of yesterday’s reports that the US President could be swaying towards, noticeable hawk, John Taylor as Janet Yellen’s successor, with the announcement expected before Trump’s department for Asia on November 3rd.

CAD & MXN: NAFTA reports were a theme of yesterday’s US session, as early source reports indicated that Canada and Mexico were said to reject US NAFTA proposals. However, as the story developed, later comments took focus, stating that ministers had agreed to extend negotiations into 2018.

Following the initial reports, USD/CAD hit 1.2590, however, over the following hours, the move was reversed, as the pair broke through 1.25, hitting lows through 1.2490. USD/MXN saw similar price action, after firstly moving to highs of 19.1500, the pair came back to trade at lows of 18.7300.

GBP: Sterling trades subdued, following the bearish BoE commentary seen yesterday. GBP/USD took a slight move higher following the release of the UK jobs reports, however this was quickly pared given that wages had slowed from the prior month. GBP/USD has consolidated through 1.32, with EUR/GBP running into a slowdown at 0.8930, now behaving as the weekly high.

New Zealand First Party MP Patterson said the party is at the business end of deciding on government coalition partner and that the party is 98% there on policy discussions, while there were later reports that party will make an announcement on negotiation results tomorrow afternoon. (Newswires)


US API weekly dist. stocks (13 Oct, w/e) 1.644M (Prev. 2.029M)

US API weekly gasoline stk (13 Oct, w/e) 1.941M (Prev. -1.575M)

US API Cushing number (13 Oct, w/e) -0.151M (Prev. 1.216M)

US API weekly crude stocks (13 Oct, w/e) -7.130M (Prev. 3.097M)

WTI and Brent crude futures made a break above the high seen in the Asia session,

18 Oct 2017 - 10:41- ForexBank Speaker- Source: RANsquawk

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