• China – A Country Garden offshore bondholder says has not received interest payment
• A packed agenda of six Federal Reserve speakers coming up Wednesday, along with Beige Book
• China’s Xi says will remove foreign investment access restrictions in manufacturing sector
• AUD and NZD jump after the better than expected data from China
• China Sep. Industrial Production 4.5% y/y (exp 4.3%) & Retail sales 5.5% y/y (exp 4.9%)
• China Q2 GDP +1.3% q/q (expected 1.0%)
• UN Sanctions on Iran’s ballistic missile and drone program have just expired
• Bank of Japan to conduct an unscheduled bond buying operation
• PBOC sets USD/ CNY mid-point today at 7.1795 (vs. estimate at 7.3079)
• IMF slash their China growth forecasts for 2023 (5% from 5.2%) and 2024 (4.2% from 4.5%)
• US nuclear-capable B-52 bomber lands in South Korea for the first time
• New Zealand will begin publishing additional monthly price indexes
• Biden to ask tough questions in Israel, meet families of victims, hostages of Hamas attack
• X (Twitter) will begin charging new users $1 a year to access key features
• Australia data: Westpac Sep. Leading Index “improves but still pointing to sub-par growth”
• China’s sustained, sophisticated, scaled theft of intellectual property is the worst ever
• More from RBA Gov Bullock – if inflation remains higher than expected will respond
• RBA Gov Bullock says is a bit more worried about the inflation impact from supply shocks
• US Congress has heightened security posture, increased police presence
• ICYMI – ECB’s Holzmann says may require additional ECB rate hikes
• Who is buying US stocks? BoA says “wide participation”, institutional, retail, hedge funds
• Coinbase shares to surge – the Bitcoin ETF false news was a dress rehearsal for real thing
• Jordan has cancelled the summit meeting in Amman with Biden, Egypt and Palestinian leaders
• US Congressman Jordan says the House will vote for speaker at 11am Wednesday, 18 October
• Fed’s Kashkari says inflation is still too high
• Oil – private survey of inventory shows much larger draw than was expected
• Forexlive Americas FX news wrap: Yields jump as retail sales beat, dollar volatile
• Mixed close for the major indices today
• Trade ideas thread – Wednesday, 18 October 2023

There
were plenty of moving parts during the Asian session on Wednesday.
The political and market reverberations of the explosions that killed 500 people at a Gaza
hospital continued. Despite it becoming clear that Hamas was behind
the dreadful atrocity, the rhetoric barely died down. Hamas fires its
missiles at Israel from populated areas of Gaza, using the
Palestinian people as human shields, and in this case the evidence
points to one of the missiles causing the death and destruction at
the Palestinian hospital. The charitable interpretation is that it
was a misfired Hamas rocket. The alternative, a deliberate attack on
civilians, is horrible to contemplate.

Markets
fear that escalation like this in the Middle East will hit energy
exports. This was a factor in the oil price surge during the
timezone.

Another
factor for oil was the data from China today, which showed better
than expected GDP growth for Q3, and better than expected Industrial
Output and Retail Sales growth in September data. This paints a
picture of an expected continuing demand improvement in China, adding
to the oil bid.

Also
playing a part was the release of privately surveyed oil inventory
data at the end of Tuesday in the US that registered a much larger
crude oil headline drawdown than was expected.

Adding
further fuel to the fire was Chinese Communist Party Chairman Xi
speaking at the Belt and Road Forum in Beijing. Of particular note
was Xi promising that China
will remove all restrictions on foreign investment access in the
manufacturing sector.

Gold
headed higher during the session. Rising oil prices threaten to tip
economies into recession, which is likely to see central banks not
being so quite ‘higher for longer’ (for interest rates) as was
expected prior to the Hamas attacks on Israel and the subsequent war.

The
USD fell on the session against major FX. AUD and NZD were notably
bid after the Chinese data. CAD, too, is stronger. EUR and GBP did
little more than return to earlier highs while the hapless yen
managed a gain on the session.

Reserve Bank of Australia Governor Bullock spoke today, with a hawkish tile to her comments.

Asian
equity markets:

• Japan’s Nikkei 225 -0.2%

• China’s Shanghai Composite -0.6%

• Hong Kong’s Hang Seng -0.1%

• South Korea’s KOSPI +0.1%

• Australia’s S&P/ASX 200 +0.1%

Oil:

MoneyMaker FX EA Trading Robot