ASIA WRAP: Bets Strengthen For RBA Nov. Hold


*Aussie jobs read positive driven by strong FTE
*US retail sales missed overnight -0.3% vs 0.3% expected
*Focus up ahead on EU summit



FX:

  • FX markets were mixed with risk sentiment soft, USD marginally higher and traders awaiting Brexit and US/China trade developments.
  • AUDUSD +0.41% gapped up to test 0.6787 on a positive jobs report where FTE saw strong gains (+27k).
  • NZDUSD -0.02% failed to move higher with AUD.
  • GBPUSD -0.50% has dropped on headlines coming out at EU open saying N.Ireland's DUP cannot support Brexit deal as it stands.
  • USDJPY -0.02 chopped around but lacked conviction to either side.
  • USDCAD +0.05. 
  • USDCNH +0.06% edged higher. We should see more vol. going into tomorrow's China Q3 GDP and September activity print.

Equities:

  • Gains in Asia equities have been capped with risk sentiment tempered after last night's soft US retail sales.
  • ASX cash fell -0.8% with rate cuts all but off the table in November. Afterpay (APT.AX) has slumped to another -5.8% finish after UBS said yesterday the share price would halve by the end of the year - mirroring our bearish views.
  • Nikkei Futures -0.04%. 
  • CSI Futures +0.3%. 
  • HSI Futures +0.8%.

Fixed Income:

  • US 10y yields have ticked lower -4bps since last night's retail sales miss as traders increased expectations for an Oct. rate cut, now at 85% implied probability. 
  • AUS 10y yields rallied +4bps following a solid jobs report.

Commodities:

  • Brent Crude Futures are -0.9% off on specific headlines though yesterday's reduction in the IMF forecast could be impacting forecast demand dynamics.
  • Gold Spot +0.06% did little in today's calmer vol. session.  



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