SINGAPORE: Industrial Production Jumps in September

RBA-dated OIS pricing is sharply firmer across meetings after today’s CPI data. 

• The headline August CPI print was 3.0%y/y, against a 2.9% market consensus and 2.8% July outcome. The trimmed mean was 2.6% y/y, after printing 2.7% in July.
• Today's data will reinforce some caution for the RBA around further easing. It is likely to firm the no-change stance next week (although market pricing has priced in very little chance of a move).
• The Q3 CPI print is out on Oct 29, with the RBA outcome on Nov 4.
• A 25bp rate cut in September is given a 0% probability, with a cumulative 17bps (22bps pre-data) of easing priced by year-end.

Figure 1: RBA-Dated OIS – Post Vs. Pre-CPI

Source: Bloomberg Finance LP / MNI

• RES 4: 118.090 High Sep 17 and a key short-term resistance       
• RES 3: 117.922 20-day EMA  
• RES 2: 117.850 High Sep 19 
• RES 1: 117.810 High Sep 22   
• PRICE: 117.700 @ 05:47 BST Sep 24
• SUP 1: 117.601 0.764 proj of the Sep 8 - 12 - 17 price swing  
• SUP 2: 117.450 1.000 proj of the Sep 8 - 12 - 17 price swing  
• SUP 3: 117.299 1.236 proj of the Sep 8 - 12 - 17 price swing  
• SUP 4: 117.080 Low Sep 2 (cont.) 

Bobl futures continue to trade closer to their recent lows. The contract has breached support at 117.690 and 117.630, the Sep 2 and Aug 25 lows respectively. Clearance of these levels reinstates a bearish theme. Sights are on 117.450, a Fibonacci projection. On the upside, key short-term resistance has been defined at 118.090, the Sep 18 high. A move above this level would signal a potential reversal.

China's markets rebounded today with the CSI 300 hitting new highs.  With chip related stocks continuing to rally, and Morgan Stanley upgrading the sector view, companies like Huawei, Alibaba and ACM Research Shanghai were up strongly today.  In Japan, after hitting new highs, the NIKKEI tried to fall today before rallying back to where it started the day.  

• In China the Hang Seng is troubled by a T10, yet it up +0.91% whilst CSI 300 rose +0.71%, Shanghai Comp +0.63% and Shenzhen up +0.97%.  
• The NIKKEI opened at 45,484 and traded down to 45,205 before rallying back to where it began the day.  
• The KOSPI had reached new all time highs for yesterday's close and is down -0.70% today as data softened.
• The FTSE Malay KLCI down -0.17% today which takes it back to being flat for the week.
• The Jakarta Comp reached new highs for yesterday's close at 8,125.20 and is down only marginally today.  
• The FTSE Straits Times is lower by -0.23% and the PSEi in the Philippines is up +0.34%
• The NIFTY 50 is down -0.26% despite HSBC recommending an overweight position.