Ahead Today
G3: US Initial Jobless Claims
Asia: China CPI and PPI, Philippines 3Q GDP
Market Highlights
The Dollar traded mixed overnight, but the big market movers came in two-fold. First, US 10-year yields fell below 4.5%, even as the US government sold US$40 billion of 10-year notes in smaller than expected auction sizes. Second, Brent Oil prices fell below US$80/bbl at its lowest in more than 3 months with concerns around oil demand outweighing Middle East tensions. Reuters reported that US crude oil inventories could have risen by almost 12 million barrels, citing American Petroleum Institute figures. There was some Fedspeak yesterday, but comments were not focused on the Fed’s monetary policy. Chair Powell said that the central bank must think beyond complex models used to forecast the economy, while NY Fed President Williams said economic models should not be blamed for missing the inflation surge.
Markets will focus on US initial jobless claims and China’s CPI and PPI data up later today.
Regional FX
Asian currencies were mixed against the Dollar. The focus for markets later today will be China’s inflation print, where markets is expecting a weak print at -0.1%yoy and -2.7%yoy respectively. There are some growing market expectations for further rate cuts by the Chinese central bank given soft inflation prints and still narrow economic recovery. The Philippines will release its 3Q GDP estimates, where the consensus is expecting some improvements in economic activity but for growth to remain below trend at 4.7%yoy. We see BSP on an extended rate pause from here and expect the 1st rate cut only from 2H2024.
