Risk markets staged further rebound overnight as DJIA gained 215.14pts, or 1.31% to close at 16614.81. S&P 500 also rose 37.27 pts or 1.96% to close at 1941.28. Asian equities followed with Nikkei up over 250 pts and reclaimed 15000 handle again at the time of writing. Meanwhile, treasury yields registered some gains, 30 year yield is still held below 3% level. The dollar indexis mildly higher and is trading above 85 level for the moment. In the currency markets, major pairs are generally stuck in tight range. The greenback regained some grounds against European majors but is mildly softer against commodity currencies.
In Australia, RBA deputy governor Philip Lowe warned that the longer global low interest rates runs on "without a pickup in the appetite for real investment, the greater is the potential for new risks to develop". He urged governments to promote "real risk-taking" and increase "spending in infrastructure" to lift global GDP growth by additional 2% by 2018. Released from Australia, headline CPI slowed sharply to 2.3% yoy in Q3 as expected. The RBA trimmed mean CPI dropped to 2.5% yoy below expectation of 2.7% yoy. RBA weighted median CPI was unchanged at 2.6% yoy, inline with consensus. Conference board leading indicator dropped -0.2% in August. Westpac leading indicator dropped -0.1% mom in September. Released from Japan, trade deficit widened to JPY -1.0T in September.
In Swiss, governing board member Fritz Zurbruegg said that the central bank will "with utmost determination make sure that the minimum exchange rate is not questioned, either with unlimited purchases of foreign currency, and if necessary we will take further measures immediately.” Meanwhile, the "current interest rates are appropriate from a price stability perspective."
BoE minutes and BoC rate decision are the major focus today. BoE left policies unchanged in October with rates kept at 0.50% and asset purchase target held at GBP 375b. The minutes would possibly show that policy makers remained uncertain on the timing of rate hike. The focus is whether there will be more than 2 members voted for rate hike back in the meeting. BoC is expected to keep the benchmark interest rates unchanged at 1.00% and maintain a neutral bias. Also to be watched include Canada retail sales and US CPI.
GBP/CAD's choppy decline from 1.8666 ended at 1.7535 and recovered from there. However, the momentum of such rebound was rather unconvincing. And, the structure looks corrective. Thus, it's believed that GBP/CAD is still in consolidative mode and the pattern from 1.8666 would extend further. So, in case of further rebound, strong resistance should be seen below 1.8666 to limit upside and bring near term reversal. Meanwhile, break of 1.7866 minor support will turn bias to the downside for 38.2% retracement of 1.5242 to 1.8666 at 1.7358.
