Market movers today
There are very few potential market movers on the global front today. The Reserve Bank of New Zealand is widely expected to keep the official cash target rate unchanged at 1.75% at today’s meeting.
Oil prices are on the rise on supply concerns and this afternoon we will get oil inventory data from the EIA, which may get more at tention than usual due to the recent price increase.
US President Trump’s 12-day tour of Asia continues wi th Beijing/China next on the list. This visit should see both trade tensions and geopolitical issues on top of the agenda. In the US, Republican work on sketching a tax reform continues here on the one -year anniversary of Trump’s election.
In the Scandi sphere, focus will be on Swedish releases for Prospera inflation expectations and household consumption (see next page).
Selected market news
Markets consolidated after a decent run in risk appetite in recent days with little data releases to rock the boat. US equity markets were mixed whereas Asia looks set to end the session slightly higher after the Hang Seng Index was lifted by the IPO of e-book maker China Literature. Momentum in oil prices eased a bit with Brent now trading a tad off the USD64/bbl mark. Recent USD gains eased a bit with EUR/USD just off 1.16 this morning. The US Treasury curve continued to flat ten yesterday with the 30Y down close to 3bp and the 10Y yield closing at 2.32%.
During his visit in South Korea, US President Trump has kept a reasonably nonconfrontational tone, taking the opportunity to encourage the rest of the Asian region to join the US in distancing itself from the North Korean regime. While warning the Kim Jong-un regime it may be making a ‘fat al miscalculation’ with its stance, Trump also stressed that he is ready to offer North Korea ‘a much better future’ provided it ends it s nuclear scheme. Trump is set to continue his trip of Asia, heading for China today.
Chinese trade data released overnight showed both exports and imports falling on an annual basis in the month of October. This suggests that Chinese growth momentum has worn off recently as the latest manufacturing PMI readings have been pointing to. CNY appreciation earlier in the year may be starting to act as a drag on exports.
Yesterday in a media interview, the Riksbank’s Cecilia Skingsley noted that the decent Swedish growth environment al lows the Swedish central bank to deviate from the ECB as Riksbank policy should not continue to be ‘a caravan’ to ECB policy. This sent EUR/SEK lower and SEK markets will most likely remain very sensitive to such comments given that the Riksbank has largely proved a shadow of the ECB in recent years,with a view to not least keeping the krona in check.
