Trade The News | Nov 09, 2012 06:23AM ET
Economic Data
Asian equity markets are trading mixed with most indices tracking another day of heavy selling on Wall St while China stocks are gaining slightly. Shanghai Composite did initially open lower, however softer than anticipated inflation data lifted expectations for continued accommodative policy stance by the PBoC. October CPI came in at a 33-month low of 1.7%, helping AUD/USD back above the $1.04 handle and S&P futures back above 1,380. Other economic datapoints out of Beijing also tracked firmer relative to consensus and prior months, with multi-month high rates of growth in industrial production and retail sales. Trade and new yuan lending data should be released late on Friday/over the weekend.
Reserve Bank of Australia took a predictably more cautious tone in its quarterly policy statement, walking a tight balance after its surprise rate hold earlier this week. Specifically, RBA lowered its 2013 GDP midpoint target to 2.75% from 3.00% prior and also affirmed 2014 GDP midpoint at 3.00%. In addition, RBA lowered its mining investment projections to a peak of 8% rise vs 9% prior and also forecasted terms of trade to fall by 15% - a bigger decline than 13% estimated in the last policy statement. Dovish stance from the RBA statement posted early in the day helped sink AUD/USD below that $1.04 level prior to post China CPI bounce.
Bank of Korea left interest rates unchanged at 2.75%, in line with unanimous expectations by economists. In contrast to last month's rate cut, today's decision was unanimous, as BOK pointed to risk of inflation from unstable grain prices. Out of the US, the White House scheduled its Presidential address for 1pmET on Friday. President Obama is expected to discuss the economy, deficit, and the fiscal cliff.
Fixed Income/Currencies/Commodities
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