New Zealand Dollar Gains as China Scraps One Child Policy

2015-10-30 06:44:00

Talking Points:

Kiwi Dollar Outperforms Against Aussie as China Scraps One-Child Policy
US Price Growth Data Boosts Fed Rate Hike Outlook, Boosting US Dollar
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The Australian and New Zealand Dollars outperformed in overnight trade. The two sentiment-linked currencies advanced alongside S&P 500 futures, hinting the move reflected firming risk appetite. The Kiwi pulled ahead of its Aussie counterpart asChina announced a decision to scrap its one-child policy. The move may fuel greater milk powder demand, amounting to a windfall for New Zealand dairy exporters.

Risk appetite was surprisingly durable despite a Bank of Japandecision to withhold additional stimulus. Options markets were heavily skewed in favor of Yen weakness ahead of today’s policy announcement, with the premium paid for the right to sell the currency compared with the right to buy rising to a five-year high. That suggested investors were betting on a dovish result. BOJ Governor Haruhiko Kuroda and company saw things otherwise, voting 8-1in favor of the status quo.

Looking ahead, stock index futures hint the risk-on mood may continue. US news-flow is in focus on the data front, with September’s PCE inflation and third-quarter Employment Cost Index figures on the docket. Improvements are expected on both fronts, which may amplify the probability of a December Fed rate hike in the minds of investors and push the US Dollar higher.

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Asia Session

GMT	CCY	EVENT	ACT	EXP	PREV
21:45	NZD	Building Permits (MoM) (SEP)	-5.7%	-	-5.3%
23:30	JPY	Jobless Rate (SEP)	3.4%	3.4%	3.4%
23:30	JPY	Job-To-Applicant Ratio (SEP)	1.24	1.24	1.23
23:30	JPY	Overall Household Spending (YoY) (SEP)	-0.4%	1.1%	2.9%
23:30	JPY	Natl CPI (YoY) (SEP)	0.0%	0.0%	0.2%
23:30	JPY	Natl CPI Ex Fresh Food (YoY) (SEP)	-0.1%	-0.2%	-0.1%
23:30	JPY	Natl CPI Ex Food, Energy (YoY) (SEP)	0.9%	0.9%	0.8%
23:30	JPY	Tokyo CPI (YoY) (OCT)	0.1%	0.0%	-0.1%
23:30	JPY	Tokyo CPI Ex-Fresh Food (YoY) (OCT)	-0.2%	-0.2%	-0.2%
23:30	JPY	Tokyo CPI Ex Food, Energy (YoY) (OCT)	0.4%	0.5%	0.6%
00:00	NZD	ANZ Activity Outlook (OCT)	23.7	-	16.7
00:00	NZD	ANZ Business Confidence (OCT)	10.5	-	-18.9
00:05	GBP	GfK Consumer Confidence (OCT)	2	4	3
00:24	AUD	CBA/HIA House Affordability (3Q)	78.3	-	81.6
00:30	AUD	Private Sector Credit (MoM) (SEP)	0.8%	0.5%	0.6%
00:30	AUD	Private Sector Credit (YoY) (SEP)	6.7%	6.3%	6.4%
00:30	AUD	PPI QoQ (3Q)	0.9%	-	0.3%
00:30	AUD	PPI (YoY) (3Q)	1.7%	-	1.1%
02:00	NZD	M3 Money Supply (YoY) (SEP)	8.5%	-	9.0%
03:22	JPY	BOJ Annual Rise in Monetary Base	¥80T	¥80T	¥80T
04:00	JPY	Vehicle Production (YoY) (SEP)	-2.6%	-	-4.7%
05:00	JPY	Housing Starts (YoY) (SEP)	2.6%	5.8%	8.8%
05:00	JPY	Annualized Housing Starts (SEP)	0.900M	0.936M	0.931M
05:00	JPY	Construction Orders (YoY) (SEP)	6.7%	-	-15.6%

European Session

GMT	CCY	EVENT	EXP	PREV	IMPACT
07:00	EUR	German Retail Sales (MoM) (SEP)	0.4%	-0.6%	Medium
07:00	EUR	German Retail Sales (YoY) (SEP)	4.1%	2.5%	Medium
08:00	CHF	KOF Leading Indicator (OCT)	100.1	100.4	Low
09:00	EUR	Italian Unemployment Rate (SEP P)	11.9%	11.9%	Low
09:30	GBP	Lloyds Business Barometer (OCT)	-	42	Low
10:00	EUR	Eurozone Unemployment Rate (SEP)	11.0%	11.0%	Low
10:00	EUR	Eurozone CPI Estimate (YoY) (OCT)	0.0%	-0.1%	Medium
10:00	EUR	Eurozone CPI Core (YoY) (OCT A)	0.9%	0.9%	Medium