Newsquawk

Blog

Original insights into market moving news

RANsquawk EU Open Rundown 29.09.17

Asian equities head into the weekend on a mostly positive note as the region digested a slew of data

USD/JPY nursed some of the prior day’s declines, which was slightly aided by the release of the BoJ’s Summary of Opinions

Looking ahead, highlights include UK GDP, Eurozone CPI, US PCE, Personal Spending, Chicago PMI and a slew of central bank speakers

ASIA

Asia equity markets were positive on what was a range-bound day heading into quarter-end and after a similar close on Wall St, where the S&P 500 eked another fresh record. ASX 200 (+0.3%) and Nikkei 225 (Unch.) were both initially subdued as energy weighed on Australia after crude prices fell over 1%, while Japanese sentiment was dampened from the prior day’s currency strength and as participants digested a deluge of mixed data releases. However, markets then recovered alongside a jubilant China where Hang Seng (+0.2%) and Shanghai Comp. (+0.3%) were underpinned on retailer optimism ahead of the National Day holiday and as financials benefitted after the banking regulator confirmed it is studying plans to further open up the industry. 10yr JGBs were modestly higher on mild short covering and with the BoJ present in the market for JPY 710bln of JGBs ranging from the belly to the super-long end.

BoJ Summary of Opinions for September 20th-21st meeting stated Japan's economy is expanding moderately and the best way to achieve the price goal is to patiently maintain current easy policy. There was also an opinion that the BoJ needs to ease policy further to support demand due to expected impact from scheduled sales tax hike. (Newswires)

Japanese National CPI (Aug) Y/Y 0.7% vs. Exp. 0.6% (Prev. 0.4%); Core CPI Y/Y 0.7% vs. Exp. 0.7% (Prev. 0.5%). (Newswires)

Japanese Industrial Production (Aug P) M/M 2.1% vs. Exp. 1.8% (Prev. -0.8%); Y/Y 5.4% vs. Exp. 5.2% (Prev. 4.7%)

Japanese Retail Sales (Aug) M/M -1.7% vs. Exp. -0.5% (Prev. 1.1%); Y/Y 1.7% vs. Exp. 2.5% (Prev. 1.8%)

PBoC refrained from open markets operations today. PBoC set CNY mid-point at 6.6369 (Prev. 6.6285)

EUROPE

ECB's Praet said banking union and creation of European Monetary Fund are priorities for the euro area, while he added that the economic recovery is not yet feeding into inflation. (Newswires)

ECB's Stournaras said further rise in EUR could negatively affect exports and tourism which would dampen the growth outlook. (Newswires)

German FDP and Green Party are said to have agreed on ministry posts they want in new coalition government. FDP are said to want the Finance, Education and Justice ministries. Greens are said to want Foreign, Development and Environment ministries. (Rheinische Post)

UK

UK GfK Consumer Confidence (Sep) -9 vs. Exp. -11 (Prev. -10). (Newswires)

UK Lloyds Business Barometer (Sep) 23 (Prev. 17)

FX

USD/JPY nursed some of the prior day’s declines, which was slightly aided by the release of the BoJ’s Summary of Opinions from the September meeting which suggested to patiently maintain current easy policy and that further policy easing may be needed to support demand on the impact from the scheduled sales tax hike. However, price action was contained as participants also digested a slew of mixed Japanese data in which Core CPI printed its firmest YTD of 0.7% but was in-line with estimates and still a distance from the 2% target, while Industrial Production surged and Retail Sales disappointed. Elsewhere, the remainder of FX was quiet in which the DXY index held just above the 93.00 level, while CNH was pressured on another consecutive weaker fix.

Mexican Central Bank kept interest rates at 7.00%, as expected. Decision was unanimous. (Newswires)

COMMODITIES

Commodity prices consolidated with WTI virtually unchanged during Asia trade to provide some respite from yesterday’s near-1.5% slip to below the USD 52/bbl. Elsewhere, gold was subdued as USD somewhat firmed, and amid a mostly positive risk tone which also helped copper maintain recent gains.

US

US treasuries closed relatively flat with the slight outperformance in the belly after a strong 7y auction which saw the yield stop tspanough the WI by 1bps and the auction covered 2.7x, the highest since April. Dec’17 10y T-note futures settled at 125.17+, up 3+ ticks.

White House Economic Advisor Cohn said he hopes to get tax reform done in the House by October and Senate by November. (Newswires)

White House is reported to launch an internal investigation into senior aides' personal email usage. (Politico)

Categories: