Asian equities were mostly lower overnight, after a large decline in US indices during the local session yesterday. Nikkei was the only strong mover overnight, recovering from a gap down open and pushing into positive territory. Most likely this was on the back of future policy easing speculation, as Chinese CPI disappointed. Tough battle for UsdJpy, with risk sentiment dampened but also with a strong dove (Rosengren) changing tack and saying that a rate hike is appropriate in December.
Looking ahead, we have a dull calendar but several ECB speakers amongst which Coeure will be of most interest. He is seen as having relatively dovish views on policy. In the UK, BoE’s Cunliffe will speak about macro-prudential policy measures. Of key interest will be the potential impact of these on housing, particularly following last week’s Inflation Report, which suggested interest rates could stay lower for longer than previously expected.
Charts for today:
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