Morning Call Script - 19 Oct 2023
Overnight asset drivers & the impending data calendar
What’s Moved Overnight
Despite a strong US20s auction (Barron's), fixed income remained the focus overnight with the Japanese 10year bond rising above 80bps for the first time in over a decade. This follows on from US10s at 4.95% and it's highest level since mid-2007.
Data overnight... AU UER dropped 0.1% to 3.6% however the underlying mix was far from positive... -39.9k full time jobs vs +46.5k part time jobs.
Asian equities a sea of red, tracking Wall Street lower ... geo political tensions, chip legislation, higher rates, bumpy road ahead for Chinese economy (GS piece), Chinese property prices continuing their decline... Nikkei -1.8%, CSI 300 down 1.67%,
Oil eased a few usd as OPEC showed no signs of supporting Iran's call for a trade embargo on Israel, the US also issued a 6month license authorizing transactions in Venezuela's oil sector.
FX - a risk averse session, AUD dipping 50bps to 0.6300, NZDUSD near 11-month low 0.5825, USDCNH back above 7.30 and its highest level in 5weeks (7.3280).
How will Powell react to the strength of the recent data? His speech at the NY Economic Club is key for the day ahead ...
Have a great day, and keep smiling!
Podcast for the Commute
The Day Ahead
USD (13:30): Initial Claims, Philly fed Manufacturing Index
Fed Speak: Powell (17:00), Goolsbee (18:20), Barr (18:30), Bostic (21:00), Harker (22:30)
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