Outside of the Aussie dollar onslaught
China
With China celebrating its 70th anniversary of Communist Party rule today trading activities have been relatively muted in Asia, its been all Aussie one-way flow post-RBA.
The Aussie will likely remain in focus.
The RBA juxtaposing employment and inflation in today's decision is even more dovish than the first 2 reads. Dear oh dear there are lots of surprises in this statement. Indeed, the Aussie bears are warming up to this and it will be interesting to see how far London takes it with the King US dollar broadly bid across G-10
Japan
Japan's GPIF has confirmed that they will classify FX hedged foreign bond holdings as domestic bonds in their investment portfolios. This would effectively expand the amount in which the Fund can invest in international bond markets.
This re-categorisation unshackles around JPY1.3-1.4 for the Fund to buy more foreign bonds. Presumably, these will be unhedged so on a pure flow basis its negative for JPY.
Today’s JGB auction was dreadful cover ration and futures got pummeled on the result
Trimming Rinbans, steepening the curve, BoJ Kuroda means business !!
Korea
USD/KRW is trading with an offered tone on the back of positive equities as South Korea September exports -11.7% y/y vs -10.3% consensus via Yonhap survey, but back to a more 'normal' range after the significant fall in the 20-day exports driven by the Chuseok holiday.
Probably a lot of dismal retail traders today who took the advice of some of the who's who in Financial world to go all-in on gold. They were likely looking for that ultimate homerun trade of the year. But in one fell swoop below 1480, it felt like a whole pile of leveraged gold paper evaporated in a wave of margin calls.
As any seasoned Gold veteran trader will tell you, trying to predict gold prices movements over the short term is challenging – especially given the number of paper leverage contracts that fast money traders can use to trigger takedowns that may scare weak hands out of their positions. I'm not suggesting this is what happened but, in a market, where leverage can get ratcheted up on a moments notice anything can happen in gold markets.