The PBoC
The PBoC appears very reluctant to have the markets very flush cash. Suggesting Beijing is being extremely careful to avoid signalling its open season on re-leveraging and subsequently reheating of the property sector.
The PBoC unambiguously stated this morning that Interest rate levels are appropriate; has ample monetary policy tools and relatively big policy room; risk from shadow banking and critical institutions have been steadily resolved; financial risks are generally under control.
Moreover, perhaps a tad disappointing for investors who are hoping for a bit more on the policy front. However, investors should take comfort as just like the Fed, the PBoC are assuredly hanging in the wings ready to act on a moments notice and should be viewed supportive for investor sentiment.
The Malaysian Ringgit
Sentiment on the ground remains very much subdued as the ringgit traders appear content to ride the coattail of yuan sentiment this morning doing little more than biding time ahead of Malaysia's critical inflation report on Wednesday.
Aussie
I'll soon have a chance to test out my theory that central banks race to zero will be a stroll in the park rather than a full out sprint when RBA Governor Lowe speaks later today. The RBA is about 80% priced for an October cut while the RBNZ is about 80% priced for a November cut. So given the considerable tail risk, if Governor Lowe disappoints on the dovish market expectation, we may see some moves on the contrarian side of the field (long AUD) as the day progresses.
In the wake of the dreary EU PMI data and the apocalyptic resonating Korea export data, although that export print more about bad optics as the 20-day export data was grossly skewed by Korean holidays. None the less the point I'm trying to make is the markets may have had their fill of short Aussie for a while
As for the rest of the G-10, everything else seems content to be back "home on the range."
Oil Markets
Traders are left splitting repair assessment headline hairs today. Not much in the markets so far today, but we think there's enough geopolitical risk in the mix amidst some subtle trade calming goodwill gestures to keep a floor under price action for the time being. However, the markets have absorbed another middle east oil shock with barely bruise. But the Greta Thunberg speech may have possibly triggered a moratorium day in Asian oil markets