- Asian equities traded mostly higher amid yet another strong close on Wall St. with markets now eyeing today’s NFP release
- In FX markets, the greenback extended on yesterday’s gains and the DXY posted its highest level in 7-weeks
- Looking ahead, highlights include US and Canadian jobs reports, BoE’s Haldane, Fed’s Bostic, Dudley and Kaplan
Asia stocks took the impetus from another record day on Wall St where all major indices hit new all-time highs, with the S&P 500 posting its longest win streak in around 4 years and Nasdaq outperformed on tech strength. This underpinned sentiment in the region with ASX 200 (+0.9%) led higher by commodity names after gains in copper and crude oil. Nikkei 225 (+0.4%) printed its highest in 2 years but with gains somewhat capped as participants were tentative ahead of today’s Non-Farm Payrolls report and the extended weekend, while Hang Seng (+0.4%) also conformed to the global upbeat sentiment as Hong Kong participants picked up from where they left off on return from yesterday’s market closure. 10yr JGBs were subdued with a lack of demand seen amid gains in riskier assets and as the BoJ’s presence in the market for JPY 710bln of 5yr to super-long JGBs failed to support.
The speaker of the Catalan parliament said that the constitutional court’s ruling regarding blocking Catalan parliament from convening harms the freedom of expression and no decision has been made on whether Monday’s session will go ahead. (Newswires)
BoE’s McCafferty said markets previously misread BOE as having its hands tied until the UK leaves the EU and that a shift in market expectations for BOE rate hike to late 2017 has reduced risks of an “unpleasant surprise”. (Newswires)
Former UK Conservative Party Chairman Shapps said PM May should quit and that he has a list of Conservative party MPs who want a new leader. However, there were also comments from UK Home Secretary Rudd that Theresa May should stay on as PM, while PM May’s deputy Damien Green said the PM will carry on in her position. (Newswires)
Britain will refuse to tell Europe how much it is prepared to pay to settle the so-called “Brexit bill” when Brexit negotiations re-open in Brussels next week. (Telegraph)
A severe revision to UK growth forecasts will drastically cut Phillip Hammond’s wiggle-room in the upcoming Budget, according to a Treasury document. (Telegraph)
In FX markets, the greenback extended on yesterday’s gains and the DXY posted its highest level in 7-weeks after yesterday’s comments from Fed’s Williams (2018 voter) that further hikes are appropriate. This saw its major counterparts dampened, in which EUR/USD slipped below the 1.1700 level and GBP/USD tripped stops through 1.3100 to the downside. Elsewhere, AUD was also influenced by central bank rhetoric, with the currency pressured after comments from RBA’s Harper who did not rule out a rate cut.
RBA’s Harper said he is not ruling out a rate cut and that a rate response could be warranted should a wider stalling of consumption occur. (Newswires)
Commodities were range-bound overnight with WTI crude futures consolidating after yesterday’s advance and brief reclaim of the USD 51/bbl level. Gold languished near the prior session’s lows as the greenback firmed and with demand for the precious metal subdued ahead of the key-risk US jobs data, while copper took a breather and held onto most of its near 3% rally.
US President Trump said should have taken care of challenges related to Iran and North Korea a long time ago and that goal in North Korea is denuclearization. US President Trump also commented that Iran is not living up to spirit of nuclear agreement and that you will be hearing about Iran very shortly, while Trump also commented that it may be the calm before storm, but didn’t elaborate what the storm is and answered ‘you’ll find out’ when questioned about it. (Newswires/Twitter)
Treasuries took a hit on the back of William’s comments and ground lower through the afternoon, negating a notable buying programme across US fixed income contracts, with a notable 10-year put buyer adding to the pressure in the space. US Dec’17 10y T-note futures settled at 125.05, down 5+ ticks.
Fed’s George (non-voter, hawk) said delaying hikes poses risks to growth and stability, while she added that gradual rate hikes and adjustments are needed. (Newswires)
GOP-led Senate Budget Committee approved FY2018 budget resolution and gets sent to Senate floor for vote. Reports added that the vote is expected after October 16th and resolution allows for USD 1.5tln tax cut. (Newswires)