The last Asian session was extremely hot with the Japanese Nikkei 225 advancing by more than 7%. This was a result of PM Abe announcing a planned CIT cut and Shirai (BoJ) indicating that the BoJ will keep the monetary policy expansive for a long time. There are market rumours that the Bank may downgrade outlook during the meeting next week, although we think more easing is unlikely at this stage. The yen is the weakest G10 currency today though.
European equities picked up Asian strength but during the US session moods flattered and even the big event from Apple, where a new iPad pro was presented, was not enough to reverse this trend. As a result, US indices, starting the day on the green side, are more than 1% in a negative territory.
Oil is also declining today as the EIA cut price forecasts and output from Saudi Arabia proved to be resilient. Because of those declines, the CAD was unable to capitalize on a relatively hawkish statement from the BoC.
The US dollar did not react to a very strong JOLTS report while the GBP suffered only moderately to a very weak manufacturing data.
Thursday’s Asian trade looks very intensive. First, we are going to get the API report on the US oil inventories (9.30pm BST), followed by the RBNZ decision on rates (10pm) where a cut is expected. Later on data on inflation from China and payrolls in Australia (both 2.30am) will be released.