• China property developer Country Garden likely to formally default on $15mn coupon payment
• FOMC minutes due Wednesday. Fed speakers too, including Bowman, Waller, Bostic, Collins.
• London’s Luton Airport suspended all flights due to fire that partially collapsed car park
• ECB’s Knot speaking Wednesday on financial stability
• GM, Canadian union reach tentative agreement, ending strike
• More from RBA’s Kent: If we were to sell bonds, we’d do it in a way not to disturb markets
• China will hold 3rd Belt and Road Forum on October 17th-18th, CCP Chair Xi keynote speech
• PBOC sets USD/ CNY mid-point today at 7.1779 (vs. estimate at 7.2842)
• RBA’s Kent pays lip service to ‘further tightening may be required’ to slow inflation
• ICYMI:WSJ Fed insider says higher bond yields are likely to result in extended FOMC pause
• PBOC is expected to set the USD/CNY reference rate at 7.2842 – Reuters estimate
• A big Wednesday coming up in the US – Inflation data (September PPI) and FOMC minutes
• Deutsche Bank’s 4 reasons to be concerned about resurgent inflation
• Reuters Tankan for September shows tiny improvement
• J.P. Morgan Private Bank says conditions in place for a new high for equities in 2024
• Fed’s Daly says we have more work to do, inflation is still high
• Japan media ICYMI – Bank of Japan considering raising its inflation outlook to nearly 3%
• ICYMI: China reportedly weighs new stimulus, higher deficit to meet growth target
• EU gives Musk 24 hours to respond about Israel-Hamas war misinformation and violence on X
• JP Morgan are wary of a disruption to oil supply and thus higher prices
• Paul Tudor Jones says it’s hard to like US stocks – “vicious circle”
• ICYMI: Deutsche Bank recommends overweight equities into 2024, risk turning to opportunity
• US Secretary of State Antony Blinken will travel to Israel this week
• MUFG says high yields have led to signalling from Fed officials of a pause
• Waiting on the private survey of oil inventory? It’ll be tomorrow due to Monday’s holiday.
• US stocks close higher for the 2nd day this week.
• Forexlive Americas FX news wrap: US dollar sags as Treasury yields fall
• Trade ideas thread – Wednesday, 11 October 2023

There
was some movement for major FX rates during the session here but as I
update the net changes are not large.

USD/JPY
dipped to a low under 148.50 but has since popped back above 148.70.

AUD
and NZD traded a little higher initially and have since given gains
back. GBP is similar but has not dropped back so much. GBP and NZD
hit multi-week highs.

Fresh
news flow was sparse. Data was lower-tier only.

From
China was the news (from
the China Passenger Car Association)
that September retail passenger vehicle sales rose 5% y/y, retail NEV
sales rose 22.1% y/y. China’s economy, barring the property sector,
is continuing to show signs of recovery. Once again the People’s
Bank of China set the USD/CNY reference rate on the 7.17 big figure
despite the market trading it circa 1000 points higher.

While
on central banks, Reserve Bank of Australia, Assistant Governor
(Financial Markets) Christopher Kent spoke on monetary policy
transmission. His comments on the current impact on inflation seemed
very much to indicate he is not expecting a rate hike any time soon,
but he did caveat with the usual would do more if needed. Note that
On
October 25 we get official quarterly CPI data from
Australia which may influence the November 7 meeting decision.More in the
points above.

Regional
stocks are firmer, following a good lead from Wall Street and also
with sentiment supported by dovish FOMC indications and continuing
hopes for more stimulus from China.

In
South Korea Samsung Electronics jumped 3.7%, spurring the Kosdaq and
Kospi on.

Brent
held above US$87 with Israel continuing its action in Gaza to root
out Hamas terrorists. A ground invasion move seems imminent.

Bitcoin
lost some ground.

Asian
equity markets:

• Japan’s Nikkei 225 +0.5%

• China’s Shanghai Composite +0.2%

• Hong Kong’s Hang Seng +1.4%

• South Korea’s KOSPI +2.3%

• Australia’s S&P/ASX 200 +0.5% (up 4 days in a row)

Bitcoin:

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