General trend

- Another quiet day on the news front did not stop significant moves in bonds (down) and USD (up) over the past 24 hours. Bank of America’s MOVE index for bond volatility has risen strongly from 90 to 123 in recent weeks and is not far off surpassing Sept 2023 highs; after that are the levels of the April 2023 US regional banking crisis.

- Equities in Australia, Japan and Korea also negative from the open, with all three main indices down ~1.5% in the first hour of trading. [AU financials -1.4%, Resources -1.2, Consumer Discretionary -1.8%] Conversely Hang Seng and Shanghai Composite up modestly amid talk from China officials (but no further clarification on stimulus).

- Oil ticked higher yesterday since dipping down into the high 60’s late last week.

- Japanese 10yr JGB yield +2bps to 0.98%, last time over 1.0% was back on Aug 1st, just before the Aug 5th meltdown. USD/JPY continued its recent strength.

- BOJ Exec Dir Kato: Wants to extremely thoroughly gauge the US economy, US elections and Fed policy – Jiji; Affirms not targeting FX levels, looking at upside risks from rising import prices; carefully looking at those risks.

- New Zealand Sept trade deficit came in with an almost identical total and exports/import numbers as prior month.

- Australia ANZ Roy Morgan Weekly Consumer Confidence rose to a 90 week high (early 2023).

- Famed US investment analyst Ed Yardeni in an interview said that US stocks will do best if US election results in a (political) gridlock. Also said China needs 'helicopter money' in order to lift consumption.

- US equity FUTs flat to slightly down during the Asia session.

Looking ahead (Asian time zone)

- Wed Oct 23rd (Wed night ECB Pres Lagarde speech, Bank of Canada Rate Decision, EU Oct Advance Consumer Conf).

- Thu Oct 24th AU + JP Oct prelim Mnfg PMI, KR Q3 Advance GDP, (Thu eve EU Oct prelim PMIs, US Oct prelim PMIs.

- Fri Oct 25th JP Oct Tokyo CPI, (Fri eve DE Oct Biz Climate, Fri night US Sept prelim Durable Goods, Univ of Michigan Confidence).

Holidays in Asia this week

- Wed Oct 23rd Thailand.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.1% at 8,336.

- Australia saw record 3,631 insolvencies in Sept quarter, +10% q/q, +46% y/y - Australian press, citing ASIC data.

- New Zealand Sept Trade Balance (NZD): -2.1B v -2.2B prior.

- RBNZ Assistant Gov Silk: RBNZ to adopt a hybrid approach to cash system liquidity - speaking on financial markets at Commonwealth Bank Global Markets conference.

- NZ DMO [debt agency] launches syndicated tap of the 4.50% coupon 15 May 2030 nominal bonds; Sells NZ$5.0B (top-of-range 3-5B).

China/Hong Kong

- Hang Seng opens -0.2% at 20,433; Shanghai Composite opens -0.1% at 3,263.

- China Sept Client FX Net Settlement (CNY): 321.1B v 6.5B prior.

- China PBOC: Overseas investors hold CNY4.36T of China Yuan bonds at end-Sept.

- China FX Regulator SAFE: China Commercial Banks purchased net $48.2B of FX in Sept v net sales of $1.2B prior.

- Majority of China-listed companies report ‘positive’ Q3 profits – China press.

- Economist and govt adviser Zhang Bin [Chinese Academy of Social Sciences] says China could tap CNY12.0T in new debt for stimulus in 2025 – SCMP [update].

- (DE) German Chancellor Scholz: Reiterates opposition to EU tariffs on Chinese EVs [weekend update].

- China PBOC sets Yuan reference rate: 7.1223 v 7.0982 prior.

- China PBOC Open Market Operation (OMO): Injects CNY158B in 7-day revershe repos; Net injects CNY90B v net injects CNY166B prior.

Japan

- Nikkei 225 opens -0.1% at 38,933.

- Japan Deputy Chief Cabinet Sec Aoki: Declines comment on current exchange rate; reiterates there are positive and negative effects.

- Bank of Japan (BOJ) Gov Ueda to visit G20 Fin Min and IMF meetings on Oct 22-27th - press.

Korea

- Kospi opens -0.2% at 2,600.

- South Korea Sept PPI Y/Y: 1.0% v 1.6% prior.

- South Korea Trade Ministry: Export growth to slow in Q4.

Other Asia

- India Central Bank (RBI) Oct Bulletin: CPI surge due to base effect and food prices.

- Taiwan Sept export orders Y/Y: 4.6% V 5.6%E; China orders drag; Sees Oct orders +1.2-5.0% y/y [overnight update].

North America

- (US) Ed Yardeni: US stocks will do best if US election results in a (political) gridlock – US financial press interview.

- (US) Moody's: On US banking system: Outlook changes to Stable on steady asset quality, improving profitability prospects.

- (US) Fed’s Daly (voter): Fed will continue to adjust policy to fit the economy; I came down strongly in favor of 50bp cut.

- (US) Fed's Schmid (non-voter for 2024; voter for 2025; hawk): Cautious approach will minimize market volatility; Calls for gradual approach to rate cuts; Prefers to avoid outsize rate cuts.

- (US) Fed's Logan (non-voter): Downside risk to job market and ongoing risks to inflation goal: Sees gradual rate cuts if economy meets forecasts - speech text.

- (US) Sept leading index: -0.5% V -0.3%E.

- (MX) Mexico govt said to consider tax incentives to lure foreign companies – press.

Europe

- (EU) ECB's Kazimir (Slovakia, hawk): Dec meeting is wide-open; We will have a lot more information by Dec.

- (UK) BOE’s Greene: A cautious, gradual approach to monetary easing is appropriate.

- BOE Chief Economist Pill criticizes stats agency over ‘poor’ jobs data - FT.

Levels as of 01:20 ET

- Nikkei 225, -1.3%, ASX 200 -1.7% , Hang Seng +0.1%; Shanghai Composite +0.2% ; Kospi -1.1%.

- Equity S&P500 Futures: -0.2%; Nasdaq100 -0.3%, Dax flat; FTSE100 -0.4%.

- EUR 1.0821-1.0814 ; JPY 151.10-150.49 ; AUD 0.6689-0.6650 ;NZD 0.6060-0.6021.

- Gold +0.3% at $2,747/oz; Crude Oil -0.4% at $69.75/brl; Copper +0.8 at $4.3933/lb.

All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

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