Currency markets have traded mixed on Wednesday, with the Yen and Sterling being the main focus. The Yen was underpinned because US bond yields remain heavy and also because of growing doubts as to whether the US tax plan will be passed, while Sterling is weak, weighed down by the political tensions in the UK and by the growing doubts over PM Theresa May’s ability to deliver a decent Brexit deal. Other currencies are generally steady and rangebound against the dollar although note that the Kiwi is higher after the RBNZ left rates unchanged just now – as expected. In other markets, the metals are a little higher; while stocks are steady and WTI settled lower after data showed crude supplies rose while US production jumped to a record all-time high last week, offsetting a larger-than-expected draw in refineries.
The RBNZ just kicked things off with Interest Rate Decision and the focus will now turn to the Japan Trade and Current Account balance for September, the Australian Home Loans data and the China CPI/PPI for October (exp; CPI 0.2%mm 1.8%yy, PPI 6.6%yy). Europe and the US will be fairly quiet, with the German Trade Balance and Current Account being the main feature in Europe, and with just the weekly Jobless Claims (exp +231K) and the Wholesale Inventories (Oct – +0.3%) to come from the US ahead of tomorrow’s US Veterans Day holiday. With Donald Trump being in China, expect to see ongoing headlines coming from there.
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