- China “stimulus” briefing: Support for business and consumers, reduced financing costs
- Fed speakers on Tuesday included Kashkari, Waller and Kashkari for the second time
- NZD: Reserve Bank of New Zealand Deputy Governor Christian Hawksby will speak about financial stability on Tuesday
- Bank of England Monetary Policy Committee member Swati Dhingra speaks on Monday
- The People’s Bank of China sets the reference rate for the US dollar against the Chinese yuan today at 7.0723 (vs. estimate of 7.0722)
- Bright spots at the Chinese Ministry of Finance conference over the weekend
- China has surrounded Taiwan with its army
- The central bank in Singapore leaves monetary policy unchanged
- Goldman Sachs raised its GDP forecast for China to just below the government target
- AUD: RBA Maintains Base Case for 25bp Rate Cut for December – Seeing Stronger Pulse of Disinflation
- Deutsche Bank warns that incoming US data will be “complex” (storms and strikes)
- US police say they “most likely” prevented a third assassination attempt on Trump.
- Goldman Sachs says PCE inflation data will show Fed has already reached its 2% target
- UBS says Fed still on track to cut interest rates (ignoring rising CPI data)
- China is intensifying its military exercises in the Taiwan Strait and throughout the island
- New Zealand Services PMI September 2024: 45.7 (previously 45.5)
- Retail sales in New Zealand fell further in September
- Chinese stocks saw the largest inflow ever
- ICYMI: China is cracking down on illegal and irregular activities in the futures market
- NSFW Alert: “China Deflationary Pressures Mount as Investors Hope for More Stimulus”
- Trade Ideas Topic – Monday, October 14, Insightful Charts, Technical Analysis, Ideas
- Monday morning open levels – indicative forex rates for October 14, 2024
- Weekly Market Forecast (October 14-18)
- Next week’s news: US retail sales, ECB and inflation in Japan, New Zealand, UK and Canada
- Japanese Prime Minister Ishiba says he will not interfere in the Bank of Japan’s monetary policy
- China’s September CPI fell below August and below expectations. The producer price index fell further.
- Four of China’s largest state-owned banks have confirmed mortgage interest rate cuts, effective October 25
- China provides few details about the stimulus at a press conference on Saturday
- 45th record close for the S&P. The Dow Jones also closed at a record high.
- Forexlive Americas FX News Cover: Canadian Jobs Win but loonie falls for 8th day
Much of the first trading day of the week was all about China! It all started on Saturday, with another disappointing stimulus briefing, this time from the country’s finance ministry. It was short on details, leaving investors reeling once again. On the positive side, Finance Minister Lan Fuan said the government will significantly increase the debt ceiling to swap hidden debts of local governments, to reduce their fiscal burdens and allow them to allocate more resources to economic development. Local governments are under pressure to reduce their debt. This would allow them to leverage debt and investment. Another thing to keep in mind is that some proposals will likely need approval by the National People’s Congress (NPC). This meeting is expected to take place at the end of October.
Having offered those caveats about being too pessimistic, it didn’t really matter. The immediate market response in the early hours was to depreciate the Australian and New Zealand dollars. As the session progressed, the Euro, British Pound and Canadian Dollar came under some pressure as well. The ranges were not great. As I prepare to publish this cover, the coins I mentioned are bouncing back. Same for Chinese stock indices, which fell early in the session but are now higher. These improvements come with another “motivational” briefing.
The yen fell slightly during the session, with USD/JPY rising to around the 139.48 level. It’s about 149.27 as I write this.
Also affected by China over the weekend were inflation data for September. The CPI came in at a slower rate than in August and also below expectations. The producer price index continued to suffer a deeper contraction.
From China, the Eastern Theater Command of the Chinese People’s Liberation Army, on Monday, launched joint naval and air exercises around the main and remote islands of Taiwan. The Army, Navy, Air Force and Missile Forces all participate. The entire island of Taiwan has been surrounded in what is seen as a simulated blockade of the democratic state.
At the central bank level, the Monetary Authority of Singapore (the Central Bank of Singapore) left its monetary policy unchanged, saying that its current settings are consistent with price stability in the medium term. If you are not familiar with how MAS manages monetary policy, see the link in the menu above; The bank uses SGD policies, not interest rates.
Gold bounced well:
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