As Treasury yields softened throughout the Asian session, the US Dollar gets weaker against all developed market currencies today. The moves unwound the previous day’s gains. The benchmark 10-year note is holding above 4% for now.
Some positive risk sentiment also arose after solid Japanese and Chinese PMI numbers. The Jibun Bank Japanese manufacturing PMI was 50.7, and the Caixin Chinese manufacturing PMI was 49.2, above estimates of 48.5.
The Chinese Yuan is one of the few currencies to fade against the ‘big dollar.’ It is at its lowest since early 2008, with USD/CNY trading as high as 7.3270. That’s a long way from the March low of 6.3035.
More PMI data is due today from Switzerland, the UK, Canada, and the US. The latter will also publish analogous ISM figures. The market remains anxious ahead of the Fed rate decision on Wednesday.
Japan’s Ministry of Finance (MoF) revealed that they had spent 6.3 trillion Yen (42.5 billion USD) in October on currency intervention.
The Kiwi Dollar has been the best-performing major currency since building approvals data showed an increase of 3.8% month-on-month in September.
AUD/USD had a run up toward 0.6450 but backed away after the RBA hiked their cash rate target by 25 basis points (bps) to 2.85%. It appears to be a case of “buy the rumor, sell the fact.”
APAC equities are all in the green, with Hong Kong’s Hang Seng Index (HSI) leading the way, up over 4% at one stage. US futures are pointing to a positive start to their cash session after yesterday’s declines.
US President Joe Biden said that record profits of oil companies are a war windfall and those producers who don’t reinvest their gains to increase output could face an extra tax.
Crude oil edged higher, with the WTI futures contract above US$ 87 bbl, while the Brent contract has surpassed US$ 93.50 bbl.