Morning Call Script - 18 Oct 2023
Overnight asset drivers & the impending data calendar
What’s Moved Overnight
China's GDP data was better than expected 4.9% vs 4.4%. Retail sales (5.5% vs exp 4.9%) and industrial output (4.5% vs exp 4.3%) also beat the economist forecasts. AUD and NZD have had a 50bp bounce as a result to 0.6380 and 0.5915 respectively.
G3 was once again drifting directionless through the APAC session... EUR 1.0580, USDJPY 149.65 and GBPUSD 1.2180
Very interesting to see the USD ignore the sell-off in US2s (5.195%), 10s (4.83%) and 30s (4.92%) after the bumper retail sales data... (Read on the Trading Floor). There is now a 40-50% chance of a hike by January in the curve and the market continues to pare back 2024 expectations with just over 2 cuts left in the curve.
In response to the duration sell off, BoJ returned to the market... BBG: BANK OF JAPAN TO CONDUCT UNSCHEDULED BOND BUYING OPERATION ..
Biden's Jordan summit has been cancelled following the hospital blast/tragedy. He will only see Netanyahu as protests erupt across the middle east.
Have a great day, and keep smiling!
Podcast for the Commute
The Day Ahead
GBP (07:00) : Inflation
EUR (10:00): EU final CPI for Sept
USD (13:30): Building Permits and Housing Starts
USD (18:00): 20year Bond Auction
USD (19:00): Fed Biege book.
Fed Speak: Waller (17:00), Williams (17:30), Bowman (18:00), Harker (20:15) and Cook (23:55)
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