The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0248 GMT – Singapore’s central bank is likely to keep policy settings unchanged at its meeting Monday, according to all nine economists and analysts surveyed by The Wall Street Journal. That would mark the sixth consecutive time that the Monetary Authority of Singapore has left settings on hold. The move would defy the global wave of central bank easing, but arguably still leave MAS in a “policy sweet spot,” Vishnu Varathan, chief economist for Asia ex-Japan at Mizuho Bank, says in a report. Singapore’s inflation hasn’t been fully contained and MAS is unlikely to concede a distinct shift to an unambiguously dovish hold, he adds. It’s more likely to opt for a neutral hold, focused on balancing two-way upside and downside risks, Varathan says. (kimberley.kao@wsj.com)
0230 GMT – China’s factory-gate prices likely fell at a faster pace in September due to persistent deflationary pressure and weakening demand, according to a poll of economists by The Wall Street Journal. The producer-price index is expected to have dropped by 2.5% on year in September, deepening from a 1.8% decline in August. Meanwhile, China’s consumer inflation likely remained subdued, with the consumer-price index expected to rise 0.6%, the same as in August, according to the poll. The National Bureau of Statistics is scheduled to release the data on Sunday. (singaporeeditors@dowjones.com)
0146 GMT – Most Asian currencies consolidate against the dollar in the morning session, but may strengthen amid lower Treasury yields that reduce the appeal of U.S. fixed-income assets and demand for the greenback. However, the devastation from Hurricane Milton in the U.S., though unlikely to be as severe as feared, could still weigh on sentiment, Westpac Strategy Group says in commentary. Also, with the U.S. presidential election approaching, the swing in polls toward Trump should support the dollar, Westpac adds. USD/KRW is little changed at 1,350.45; USD/SGD is steady at 1.3062; AUD/USD is flat at 0.6737. (ronnie.harui@wsj.com)
0038 GMT – Minutes of the Reserve Bank of Australia’s September board meeting earlier this week were more balanced with a clear step down in hawkishness, says Adam Boyton, head of Australian economics at ANZ. As Gov. Michele Bullock noted in her post-meeting press conference, the board didn’t consider a rate hike at its September meeting. Rather, the discussion around monetary policy focused on upside and downside risks to the outlook and inflation, he adds. The door is open to a shift to neutral bias by the end of this year and then easing in early 2025, Boyton says. ANZ continues to expect the first RBA cash rate cut in February. (james.glynn@wsj.com; @JamesGlynnWSJ)
0036 GMT – JGBs rise, tracking price gains in U.S. Treasurys during the Asian morning session. JGBs and Treasurys tend to move in tandem. Looking ahead, the JGB market is expected to stay in its current range ahead of Japan’s Lower House election on Oct. 27, says Tomohisa Fujiki, rates strategist at Citi Research, in a research report. Market focus will also be on whether there’s a BOJ rate increase and influence from overseas markets, Fujiki adds. The JGB 5-year yield is down 1.5 bps at 0.570%; the 10-year yield sheds 1.5 bps to 0.940%; the 20-year yield loses 2 bps to 1.730%. (ronnie.harui@wsj.com)
0014 GMT – South Korea’s benchmark Kospi rises 0.9% to 2621.87 in early trade ahead of the Bank of Korea’s rate decision. Semiconductor and defense stocks advance, as the central bank is widely expected to cut rates. Retail and institutional investors are net buyers. Index heavyweight Samsung Electronics is 0.9% higher, regaining ground after a two-session losing streak on downbeat 3Q preliminary earnings. Memory-chip maker SK Hynix rises 1.6%. Defense companies Hanwha Aerospace and LIG Nex1 gain 2.4% and 3.3%, respectively. USD/KRW is 0.4% lower at 1,349.85. The benchmark 10-year government bond yield is up 1.1 bps at 3.088%. (kwanwoo.jun@wsj.com)
0011 GMT – Japan’s Nikkei Stock Average rises 0.3% to 39497.97 in likely position adjustments. Market participants will probably be “keen to position portfolios for another weekend of potential gapping risk,” with them seeking to adequately price expectations for China’s Ministry of Finance press briefing on Saturday, says Chris Weston, head of research at Pepperstone, in commentary. Among best performers on the benchmark index, Chugai Pharmaceutical rises 2.7%, MonotaRO adds 3.5% and Fujikura is up 2.8%. USD/JPY is at 148.73, down from 149.24 at Thursday’s Tokyo stock market close.(ronnie.harui@wsj.com)
2400 GMT – The champagne corks are popping at the Reserve Bank of New Zealand, with 3Q CPI data next week expected to show inflation back in the middle of the 1%-3% target band, but the celebrations should be tempered somewhat. ANZ New Zealand Chief Economist Sharon Zollner says that while she doesn’t want to spoil the party, it remains a fact that nontradables inflation remains way too high. If the sound of corks popping does resonate through the RBNZ building next week, they’ll be celebrating global disinflation progress just as much as their own. Domestic disinflation does appear poised to continue, but there’s still a way to go, she adds. (james.glynn@wsj.com; @JamesGlynnWSJ)
2339 GMT – Japanese shares may rise on possible position adjustment as investors parse U.S. economic data released overnight. While weekly jobless claims surged to the highest level in more than a year, U.S. CPI inflation came in a touch hot. Also, gains in local stock markets may be capped by yen strength, which typically hurts the overseas earnings of Japanese exporters when repatriated to Japan. Nikkei futures are 125 points higher at 39450 on the SGX. USD/JPY is at 148.59, down from 149.24 at Thursday’s Tokyo stock market close. The Nikkei Stock Average closed 0.3% higher at 39380.89 on Thursday. (ronnie.harui@wsj.com)
2035 GMT – The Bank of Mexico minutes show at least two of the five board members are willing to consider rate cuts of more than 25 basis points at some point. “The minutes answered some questions we had on the new hawk/dove balance, but more importantly, showed us that while the board is now open to accelerate the pace of cuts, it is not ready to do so,” Gabriel Casillas and Erick Martínez of Barclays say in a note. “We could see some FX pressure stemming from the U.S. electoral process, as well as some noise from AMLO’s [former President Andrés Manuel López Obrador] reform agenda, that could preclude Banxico from increasing the pace of cuts, but not from easing,” they add. The peso is little changed at 19.47 to the U.S. dollar versus 19.50 yesterday. (anthony.harrup@wsj.com)
2012 GMT – Treasury yields have a mixed performance as fresh inflation and labor data pointed to different directions. September CPI was broadly mild, but a tad above expectations, giving fodder to pundits forecasting a moderate pace of interest rate cuts by the Fed. Weekly jobless claims, in turn, pointed to rising layoffs, which could justify faster monetary easing. But considering the impact of hurricanes and other factors, investors seemed to settle around the notion that the Fed remains poised to cut by 25 basis points next month. The 10-year yield gains 0.028 percentage point to 4.093% and the two-year declines by 0.018 p.p. to 3.997%. (paulo.trevisani@wsj.com; @ptrevisani)
1806 GMT – Mexico’s industrial production likely advanced at a modest pace in August. Output is expected to have increased 0.4% from the year-earlier month, compared with a 2.1% year-on-year growth in July, according to a Wall Street Journal survey of analysts. In seasonally adjusted terms, output is seen edging up 0.2% from July in a fourth consecutive month of growth. Statistics institute Inegi is scheduled to report August industrial production on Friday.(anthony.harrup@wsj.com)
