Halister News

(Bloomberg) -- USD/JPY fluctuates below 105 as month-end dollar demand lifts pair in early trading while BOJ begins 2-day meeting; pair is set for biggest monthly gain since May.

• BOJ policy decision and Governor Kuroda’s press conference are due tomorrow; click here for latest BOJ watchers’ call
• Hard for USD/JPY to breach 105 again amid increased uncertainty surrounding U.S. presidential election due to renewed Clinton probe by FBI, Kyosuke Suzuki, Tokyo-based head of FX and money market sales at Societe Generale says
  • BOJ and FOMC may not be new catalyst to move the pair
  • USD/JPY may swing around 104 level ahead of U.S. election
• USD/JPY trades up 0.1% at 104.83 with 104.27-105.03 range so far in Asian session; stays above pivot S1 at 104.30
  • Pair is up 3.4% on the month, and touched 105.53 on Friday, highest since July 29
  • FX options expiring today include strike at 104.00 for $2.53b: DTCC
• 10-year yield is little changed at -0.050%, 20-year yield falls 1bp to 0.380% and 30-year yield slides 0.5bp to 0.505%
  • JGBs rise in 20-, 30-year sectors as U.S. Treasury yields slip on renewed Clinton probe on Friday, according to Mitsubishi UFJ Trust and Banking; focus on BOJ’s November purchase plan for JGBs due tomorrow
• Sept. industrial production unchanged m/m vs est. +0.9%
  • Barclays expects 4Q q/q industrial production to be roughly the same as Q3, according to note from the bank; maintain forecast for real GDP growth to strengthen from Q3 to Q4, assuming recent fiscal measures start to have an effect

(Bloomberg) -- AUD advancing on crosses ahead of Nov. 1 RBA meeting as investors wait for fresh polls later today on the tightening U.S. election race.

• Clinton holds democrats after FBI e-mail bombshell
• BBDXY +0.06% to 1,209.05
  • 10-year Treasury yield steady at 1.847%
  • Oil, copper both drop; gold rises
• AUD/USD +0.16% to 0.7611 vs 0.7582-0.7614 range
• Aussie climbs on macro positioning linked to kiwi option expiries at 0.7150. Clients see more risk event built around RBA statement than actual central bank decision: trader
• USD/JPY +0.03% to 104.77 vs 104.27-104.94 range
• Leveraged funds raised net JPY long by 3,956 contracts to 28,277 in week ended Oct. 25
• Options expiring today include 104.00 strikes for $2.53b
• NZD/USD -0.08% to 0.7157 vs 0.7138-0.7167 range
  • Kiwi recovering as N.Z. Treasury says economy growing faster than forecast
  • Slid early after ANZ October business activity index dropped to 38.4 from 42.4 in September; confidence index falls to 24.5 from 27.9
• Options expiring today include 0.7150 strikes for NZ$466m
• GBP/USD +0.05% to 1.2191 vs 1.2141-1.2215 range
• BOE’s Carney has told friends he is likely to make statement this week to end speculation, ready to serve full term: FT
• NOTE: Mark Cranfield is an FX strategist who writes for First Word. The observations he makes are his own and are not intended as investment advice.

(Bloomberg) -- Further acceleration in Indonesia’s CPI inflation in October could damp prospects for more rate cuts, dragging USD/IDR lower, Bloomberg strategist Andrew Robinson writes.

• Consumer prices probably rose 3.30% y/y following 3.07% gain in September, median est. in Bloomberg survey shows; ests. range from 3.22% to 3.41%; data due Nov. 1, no time specified
  • Another month of faster inflation may suggest that prices have bottomed out near term after reaching a record low of 2.79% in August
• USD/IDR trades little changed at 13,052 today
  • 50-DMA at 13,093; pair has not traded above it since Sept. 21
• BI last cut 7-day reverse repo rate to 4.75% from 5.00% on Oct. 20; next meeting scheduled for Nov. 16
  • Latest Bloomberg survey shows BI will probably maintain 7-day reverse repo rate steady at 4.75% through 2017
• NOTE: Goldman expects faster headline inflation in October, citing in part, unfavorable base effects, according to a note dated Oct. 28
• NOTE: Andrew Robinson is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice

(Bloomberg) -- Investors should reduce exposure in Chinese investment-grade and high-yield property bonds with spreads at their tightest levels ever, Kenneth Ho and Charles Himmelberg, analysts at Goldman Sachs, wrote in an Oct. 28 note.

• Goldman expects more offshore supply of China property bonds, which could weaken technicals: note
• The regulatory tightening on the property sector is showing initial signs of effectiveness: note
• Past experience suggests spreads on China property bonds widen before actual physical property price declines: note
• NOTE: Shanghai Bourse Said to Tighten Rules on Real Estate Bond Sales

--GEAROID REIDY