RBA left cash rate unchanged at record low of 1.50% as widely expected. The accompanying statement sounded balanced with little change in growth and inflation outlook comparing to three months ago. RBA expected, over the next year, economy to grow at "close to its potential rate, before gradually strengthening". Inflation is also expected to "pick up gradually over the next two years." Meanwhile, RBA noted that "economic conditions in China have steadied recently, supported by growth in infrastructure and property construction".
BoJ left monetary policies unchanged at widely expected. Interest rate was held at -0.1%. The target of 10 year yield was maintained at around zero and thus, under the "yield curve control" framework, the annual pace of monetary expansion was kept at JPY 80T. However, the central cut its inflation forecasts and now projects inflation to hit 1.5% in the fiscal year ending in March 2018. That's downwardly revised from July's projection of 1.7%. As a result, BoJ now projects inflation to hit the 2% target around fiscal 2018, delayed from current target of fiscal 2017.
The official China PMI manufacturing rose to 51.2 in October, up from 50.4 and above expectation of 50.4. That's also the highest reading two years. Official PMI non-manufacturing rose to 54.0, up from 53.7. The Caixin China PMI manufacturing rose to 51.2, up from 50.1 and beat expectation of 50.0. The set of data suggests that the economy in China is recovering well in the second half of the year. The details also suggested that strength was pass through to medium sized companies. And the momentum would likely carry forward to first half of 2017. The China SSE (LON:SSE) composite index is trading up around 0.3% at the time of writing while Hong Kong HSI is up 1.2%.
Looking ahead, PMI data will be the main focuses for the rest of the day. Swiss will release SVME PMI and retail sales in European session. UK will also release PMI manufacturing. In US session, Canada GDP, US ISM manufacturing and construction spending will be featured.