• China ‘stimulus’ briefing: support for business and consumers, financing costs lowered
• Federal Reserve speakers Tuesday include Kashkari, Waller, and Kashkari a second time
• NZD: RBNZ Deputy Governor Christian Hawkesby will speak about financial stability Tuesday
• Bank of England Monetary Policy Committee member Swati Dhingra is speaking Monday
• PBOC sets USD/ CNY reference rate for today at 7.0723 (vs. estimate at 7.0722)
• Bright spots in China’s Ministry of Finance weekend briefing
• China has surrounded Taiwan with its military
• Singapore’s central bank leaves monetary policy unchanged
• Goldman Sachs has boosted its China GDP forecast to just below the government target
• AUD: CBA maintains base case December RBA 25bp rate cut – see firmer disinflationary pulse
• Deutsche Bank warns the incoming US data will be ‘complicated’ (storms & strikes)
• US police say they ‘probably’ prevented third assassination attempt on Trump.
• Goldman Sachs says the PCE inflation data will show the Fed is at its 2% target already
• UBS says the Federal Reserve remains on track to cut rates (shrugs off higher CPI data)
• China ramping up military drills in the Taiwan Strait, and all around the island
• New Zealand services PMI for September 2024: 45.7 (prior 45.5)
• New Zealand retail sales slumped further in September
• Chinese equites saw the biggest inflow on record
• ICYMI: China to crack down on illegal & irregular activities in the futures market
• NSFW alert: “China’s deflationary pressures mount as investors hope for more stimulus”
• Trade ideas thread – Monday, 14 October, insightful charts, technical analysis, ideas
• Monday morning open levels – indicative forex prices for 14 October 2024
• Weekly Market Outlook (14-18 October)
• Newsquawk Week Ahead: US Retail Sales, ECB, inflation from Japan, NZ, UK and Canada
• Japanese Prime Minister Ishiba says will not intervene in BOJ monetary policy
• China September CPI rate fell below August and below expectations. PPI slumped further.
• Four of China’s biggest state-owned banks confirm mortgage rate cuts, beginning October 25
• China offers few details on stimulus in Saturday’s press conference
• The 45th record close for the S&P index. Dow also closing at a record level.
• Forexlive Americas FX news wrap: Canadian jobs beat but CAD down for eighth day

Much
of the first trading day of the week was all about China! It all started on Saturday, with
another disappointing briefing on stimulus, this time from the
country’s Ministry of Finance. It was short on detail, once again
leaving investors deflated. On the positive side, finance minister
Lan Fo’an did say that the government will significantly increase the
debt ceiling to swap local governments hidden debt, to reduce their
financial burden and allow them to allocate more resources towards
economic development. Local governments have been under pressure to
reduce their debt. This should allow them to boost debt and
investment. Another thing to bear in mind is that its likely that
some proposals will need approval from the National People’s
Congress (NPC). This meeting is expected toward the end of October.

Having
offered up those caveats on being too downbeat, these didn’t really
matter. The immediate market response in the early hours was to mark
down AUD and NZD. As the session progressed EUR, GBP and CAD came
under some pressure also. Ranges were not large. As I prepare to post
this Wrap the currencies I have mentioned are bouncing back. Same for
Chinese equity indexes, which declined early in the session but are
now higher. These improvements are coming as another ‘stimulus’ briefing takes place.

The
yen has fallen a little on the session, with USD/JPY as high circa
139.48. Its around 149.27 as I write this.

Also
impacting from China over the weekend were inflation data for
September. The CPI came in at a slower rate than in August and also
below expectations. The PPI remained in, even deeper, deflation.

From
China on Monday, China’s People’s Liberation Army Eastern Theatre
Command launched joint sea and air drills around Taiwan’s main and
outlying islands. Army, Navy, Air Force and Rocket Force are all
participating. The island of Taiwan has been completely surrounded in
what is seen as a simulated blockade of the democratic state.

On
the central bank front, the Monetary Authority of Singapore
(Singapore’s central bank) left its monetary policy unchanged,
saying its current settings are consistent with medium-term price
stability. If you are not familiar with how the MAS conducts monetary
policy, check out the link in the list above; the Bank uses SGD
policies, not interest rates.

Gold bounced nicely: