MNI EUROPEAN OPEN: BoJ Holds- But No Hawkish Surprises

EXECUTIVE SUMMARY

• "AMAZING MEETING" BETWEEN TRUMP AND XI - BBG
• POWELL LEANS AGAINST DECEMBER CUT EXPECTATIONS - MNI FED WATCH
• BOJ KEEPS RATE AT 0.50%, STICKS TO GRADUAL HIKE - MNI BRIEF
• CHINA ECONOMIST ON BEIJING'S GROWTH STRATEGY - MNI
• RBA’S FORMER RESEARCH CHIEF ON THE CASH RATE OUTLOOK - MNI 

Fig 1:  S&P vs Nasdaq futures indices

Source: MNI - Market News/Bloomberg Finance L.P. 

UK 

BOE (MNI INTERVIEW): Markets are significantly overestimating the chance of a December cut, former Bank of England Monetary Policy Committee member Michael Saunders told MNI, noting that the effect of any fiscal tightening in the Nov 26 budget is likely to be deferred and the MPC will not receive key agents’ pay survey data before February.

EU

EC (MNI): The European Commission's autumn forecasts will take account of recent proposals by EC President Ursula von der Leyen to mitigate the impact of new carbon-trading plans, potentially allowing for a materially lower 2027 inflation outlook.

NETHERLANDS (POLITICO): “Rob Jetten is in pole position to be the next Dutch prime minister after his liberal D66 party scored a stunning result in Wednesday’s election. D66 is on track to come first with 27 seats, while far-right firebrand Geert Wilders’ Party for Freedom (PVV) is close behind and poised to snag 25 seats, according to a preliminary forecast by the Dutch news agency ANP.”

RUSSIA (BBG): "Ukraine and its allies have called on Donald Trump to pressure Xi Jinping over China’s support for Russia. Trump’s meeting with Xi later Thursday will be a major test of just how ready the US president is to get tough with Vladimir Putin." 

US

FED (MNI FED WATCH): Federal Reserve Chair Jerome Powell indicated Wednesday officials are still unsure about lowering interest rates again in December, pushing back on market pricing that had moved to reflect near certainty of another cut before year end. 

FED (MNI): Attached is a rough transcript of Fed Chair Jerome Powell's October press conference.

FED (MNI): Federal Reserve officials lowered interest rates by a quarter percentage point Wednesday, citing downside risks to the labor market, and declared an end to asset runoffs that have significantly reduced the central bank's balance sheet from its post-crisis peak.

TRADE (BBG): “US President Donald Trump said he had an “amazing meeting” with Chinese President Xi Jinping that resulted in a trade deal to halve fentanyl-related tariffs on Chinese goods effective immediately.”

OTHER

JAPAN (MNI BRIEF): The Bank of Japan, as widely expected, decided by a 7-2 vote on Thursday to keep its policy interest rate unchanged at 0.50%, citing continued high uncertainty over the outlook for the economy and inflation.

JAPAN (MNI BRIEF): The Bank of Japan on Thursday left its core consumer price index forecasts for fiscal 2025, 2026 and 2027 unchanged at 2.7%, 1.8% and 2.0%, following the Board's decision to leave the policy rate unchanged at 0.5%.

CANADA (MNI BOC WATCH): Bank of Canada Governor Tiff Macklem signaled he's about done lowering interest rates after moving for the second meeting in a row Wednesday, citing evidence inflation is settling around target as the U.S. trade war hurts jobs and growth. 

CANADA (MNI BRIEF): Bank of Canada Governor Tiff Macklem said Wednesday GDP could contract again in the third quarter and while a small gain or loss is possible back-to-back declines would be more of a technical downturn than any deep recession.

AUSTRALIA (MNI): The RBA's former research chief shares his cash rate outlook.  On MNI Policy MainWire now, for more details please contact sales@marketnews.com 

CHINA 

GROWTH (MNI): A prominent Chinese economist shares his view on Beijing's growth strategy. On MNI Policy MainWire now, for more details please contact sales@marketnews.com. 

MNI: PBOC Net Injects CNY130.1 Bln via OMO Thursday

MNI: PBOC Sets Yuan Parity Higher At 7.0864 Thurs; +0.93% Y/Y

MNI (BEIJING) - The People's Bank of China (PBOC) set the dollar-yuan central parity rate higher at 7.0864 on Thursday, compared with 7.0843 set on Wednesday. The fixing was estimated at 7.1065 by Bloomberg survey today.

MARKET DATA

NEW ZEALAND ANZ OCT. BUSINESS CONFIDENCE 58.1; SEP. 49.6
NEW ZEALAND ANZ OCT. BUSINESS OWN ACTIVITY OUTLOOK 44.6; SEP. 43.4

AUSTRALIA Q3 EXPORT PRICES -0.9% Q/Q; Q2 -4.5%
AUSTRALIA Q3 IMPORT PRICES -0.4% Q/Q; Q2 -0.8%

MARKETS
US TSYS: Could a Stronger GDP See Yields Higher Again? (amended)

• US treasury futures trended sideways today, after last night's dramatic shift and will look ahead to tonight's trading session to see if there is further follow on.  The 10-Yr bond future was around 112-18+ by late afternoon in the trading day in Asia, up marginally from the US close of 112-25

Bonds rallied back with yields down 1-2bps in what appears to be profit taking.  In what was a relatively outsized move overnight in yields, it was unsurprising to see a modest bounce back today.  

• The US 2-Yr is -1.8bps lower at 3.582%
• The US 5-Yr is down -1.9bps at 3.694%
• The US 10-Yr has recovered a little, down -1.9bps at 4.06%
• The US 30-Yr is at 4.614% down -1.2bps on the day.

It remains to be seen whether the bond market will continue to sell of in US time overnight.  The auction schedule is predominantly bills and unlikely to drive the direction for bonds.  

Most likely catalyst for tonight would be data with initial jobless claims and GDP QoQ originally expected, GDP is expected to moderate to 3.0% from 3.8% but appears unlikely that it will be released.  The likelihood is that positioning in treasuries is more balanced after last night's move.  Should however GDP not moderate as much as forecasts, it could push on the market further sending yields higher.  

JGBS: Futures Outperforming On BoJ Hold, US-JP 10yr Re-Widens

JGB futures are holding higher post the lunch time break as markets digest the BOJ on hold outcome. This meeting delivered little for BoJ hawks, with the vote to hold rates maintained at 7-2, while forecast changes were modest. All in all it suggested a high bar for the core board viewpoint to shift to a hike by Dec. JGB futures were last 136.18, +.05 versus settlement levels. recent lows rested under 135.80, while this week's high was above 136.30. We are still under important support though (137.30). 

• Cash JGB yields have shifted lower, although moves aren't large. Still, this leaves us underperforming the recent Tsy shifts. The US-JP 10yr government bond yield differential is back close to +242bps (against recent lows of +230bps).
• The 10yr JGB is back to 1.65%, backing away once again from a 1.70% upside test. The 30yr was around 3.05%, so on track to close under 100-day EMA support.
• The 2/30s curve is little changed at +211.5bps.
• Note tomorrow we get Sep jobless rate figures, as well as Tokyo CPI. Before then we get Ueda's press conference in a little over an hour. 

AUSSIE BONDS: Holding Weaker But Up From Lows, 3yr Yield Back Around Cash Rate

Aussie bond futures are holding losses, but are away from session lows. Some support likely emerging from the drift in US Tsy futures. JGB futures are also higher post the on hold BoJ outcome (which gave few hints around hike timing). Broader risk focus is on the Trump-Xi meeting, which has just concluded. Trump is making positive comments around the outcome of the meeting, although broader risk appetite is still skittish.  

• 3y futures were last 96.38, off 5bps and around late Sep/earlier Oct lows. Session lows were at 96.335. 10yr futures were last 95.69, -7.5bps, (against session lows of 95.645).
• Like the NZGB space, ACGB yields are away from earlier highs. We are still 3-7bps higher, led by the back end. The 3yr yield is back around 3.60%, so in line with the RBA cash rate. Earlier highs were through this level (near 3.64%).
• The AU-US 10yr spread is holding higher, last +23bps. Upside focus will remain on recent highs beyond +30bps.
• RBA pricing has little easing risks priced into year end, while a full cut is not priced until August next year.
• Tomorrow is Q3 PPI, along with Sep private sector credit. 

NZGBS: Yields Higher But off Best Levels, 2/10s Back Under +150bps

NZGB yields are holding firmer, but are away from session highs. We are around 2.5-4.5bps higher, with the belly of the curve leading in yield terms. Moving off session highs may have been helped by a slightly weaker US Tsy lead so far today, although Tsy yield losses are not much beyond 1bps at this stage. The 2yr is around 2.60%, so not breaking above 20-day EMA resistance yet. The 10yr is around 4.08%, but did get beyond 4.14% earlier. The 2/10s curve is off earlier highs, last +148bps, after printing +152bps earlier. 

• The 2yr swap rate, which has arguably led the firmer yield tone in NZ, is off nearly 4bps to 2.42%. We are still some distance from recent lows near 2.25%.
• On the data front today, ANZ business confidence rose to its highest since February at 58.1 in October. The RBNZ cut rates 50bp to 2.5% on 8 October with more signalled, but ANZ doesn’t believe it boosted sentiment. However, interest-sensitive sectors are outperforming. The activity outlook was more subdued but still rose 1.2 points to 44.6. Inflation expectations ticked higher but pricing intentions were lower. The RBNZ is likely to cut rates again on 26 November and the ANZ survey confirmed that while the recovery continued it remains soft and uneven.
• Nov easing is priced around 90% for a 25bps cut by the market so away from recent extremes of beyond 100%. 2026 implied rate levels have edged up, but this is likely spill over from the Fed overnight.
• Tomorrow, we get the Oct ANZ consumer confidence print. 

FOREX: USD/JPY Off Post BoJ Highs, A$ & NZD Still Higher

The USD is weaker, but holding recent ranges. The BBDXY off around 0.15% to be near 1212. USD/JPY has been volatile rising above the 153.00 post the dovish on hold BoJ. The central bank meeting outcome contained little for hawks (7-2 vote to hold rate, while forecast changes were minimal). We got to highs of 153.14 (leaving the bull trigger in the pair at 153.27 intact). We were last near 152.70, little changed for the session, as risk sentiment has softened a touch post the Trump-XI meeting. Trump has spoke about broad agreement on a lot of issues (including lowering tariffs related to fentanyl) but we are yet to hear from the China side. Trump also stated that a comprehensive statement would be released later. US equity futures have slipped back into the red. US Tsy yields are down a touch. 

• AUD and NZD are holding gains, but remain within recent ranges. AUDUSD is up 0.3% to 0.6592 approaching 0.6600 again but reaching a high just short at 0.6593. NZDUSD is also 0.3% higher at 0.5779 following an intraday high of 0.5780. This means that AUDNZD is steady oscillating around 1.1405.
• Later the Fed’s Bowman gives pre-recorded remarks and Logan speaks at a bank funding conference. The ECB decision is expected to be on hold. Euro area Q3 GDP, EC October survey, German preliminary CPI & September unemployment print.

ASIA STOCKS: New Highs For KOSPI : BOJ on Hold : JCI Back Above Key Level

As President Trump and Xi met in Korea, equity futures rose on hopes that easing trade tensions could be supportive of global growth going forward.  South Korea announced a trade deal today that would result in $150bn of Korean investment in US shipbuilding, with a further $200 bn potential to follow.  Korea agreed to buy significant amounts of US oil and gas which gave the KOSPI a further kick towards a new all time high.  Elsewhere stocks in Japan were led by their tech sector following overnight positive news from Alphabet and Nvidia whilst the BOJ failed to surprise markets, keeping rates at 0.50%. 

• The NIKKEI hit new highs of 51,561 on tech and BOJ hold and is up +0.50% today.
• The Hang Seng led China's major bourses with gains of 0.55% to 26,487, consolidating above the 20-day EMA of 26,175 whilst other major bourses were mixed
• The TAIEX only had limited follow on from the Tech sector new overnight, gaining just +0.22% despite up strongly to hit new highs.  
• The KOSPI was buoyed by the trade deal and the uncertainty that it removed and rose +0.23% to another new high.  The KOSPI is up now 19% over the last month, challenging valuations relative to bonds.  
• The Jakarta Comp has now delivered two days of gains, to trade back above the 20-day EMA after dipping below as the NIFTY 50 opens having closed yesterday at a new high.  

OIL: Crude Dips As Trump-Xi Meeting Ends With No Announcement

Oil has been range trading during today’s APAC session as it waits for news following the meeting between Presidents Trump and Xi, which has ended. The lack of news at this point has driven prices lower. The market is also on hold ahead of Sunday’s OPEC meeting which is likely to see another 137kbd increase in the output target as it unwinds previous curbs but it is coming at a time of already elevated supply. 

• WTI is down 0.5% to $60.19/bbl but has traded today between $60.05 and $60.45. It was around $60.40 before it was announced that Trump had boarded Air Force One. Brent is 0.3% lower (December contract) at $64.76, after reaching $64.96, but off the day’s trough at $64.51. The USD index is down 0.1%.
• Uncertainty is high for oil with the Fed outlook unclear given dissenters and lack of data, ongoing trade tensions, elevated supply and sanctions. Trump said that he may discuss China’s Russian oil purchases with Xi when they met today.
• Later the Fed’s Bowman gives pre-recorded remarks and Logan speaks at a bank funding conference. The ECB decision is expected to be on hold. Euro area Q3 GDP, EC October survey, German preliminary CPI & September unemployment print. 

Gold Range Trading On Uncertain Fed Outlook & Wait For US-China News

Gold prices reached $3966.52/oz earlier before falling to $3915.52 but are now 0.2% higher on the day at $3938. Its relatively narrow range reflects uncertainty over the Fed outlook with Chair Powell noting the variation in views. There were two dissenters this month with a vote for no change and one for a 50bp cut. The lack of data is also clouding the outlook. It has found support from a slightly lower US dollar and 2-year yield but stronger US equity futures are offsetting this. 

• Presidents Xi and Trump have just met in South Korea with no announcements yet, which may be supporting bullion’s latest uptick.
• US Treasury Secretary Bessent said earlier this week that a draft US-China trade agreement had been reached. There have also been comments that China will increase its US soyabean imports. The hope is that a deal will avoid additional 100% US tariffs on 1 November and ease restrictions of China’s rare earth mineral exports needed for tech production.
• Silver has been in a narrow range today. It is down 0.1% to $47.53 off the intraday low of $47.269. It reached $47.970 earlier in the session. Both gold and silver remain in overbought territory.
• Later the Fed’s Bowman gives pre-recorded remarks and Logan speaks at a bank funding conference. The ECB decision is expected to be on hold. Euro area Q3 GDP, EC October survey, German preliminary CPI & September unemployment print. 

UP TODAY (TIMES GMT/LOCAL) 

Date	GMT/Local	Impact	Country	Event
30/10/2025	0630/0730	***	FR	GDP (p)
30/10/2025	0630/0730	**	FR	Consumer Spending
30/10/2025	0700/0800	**	SE	Retail Sales
30/10/2025	0800/0900	***	ES	HICP (p)
30/10/2025	0800/0900	**	CH	KOF Economic Barometer
30/10/2025	0800/0900	**	SE	Economic Tendency Indicator
30/10/2025	0855/0955	**	DE	Unemployment
30/10/2025	0900/1000	***	DE	GDP (p)
30/10/2025	0900/1000	***	IT	GDP (p)
30/10/2025	0900/1000	***	DE	Bavaria CPI
30/10/2025	0900/1000	***	DE	North Rhine Westphalia CPI
30/10/2025	0900/1000	***	DE	Baden Wuerttemberg CPI
30/10/2025	1000/1100	*	EU	Consumer Confidence, Industrial Sentiment
30/10/2025	1000/1100	**	EU	EZ Unemployment
30/10/2025	1000/1100	***	EU	EZ GDP 1st (Prelim Flash)
30/10/2025	1230/0830	***	US	Jobless Claims
30/10/2025	1230/0830	**	US	WASDE Weekly Import/Export
30/10/2025	1230/0830	*	CA	Payroll employment
30/10/2025	1230/0830	***	US	GDP / PCE Quarterly
30/10/2025	1230/0830	***	US	GDP / PCE Quarterly
30/10/2025	1300/1400	***	DE	Germany CPI (p)
30/10/2025	1300/1400	***	DE	Germany CPI (p)
30/10/2025	1315/1415	***	EU	ECB Deposit Rate
30/10/2025	1315/1415	***	EU	ECB Main Refi Rate
30/10/2025	1315/1415	***	EU	ECB Marginal Lending Rate
30/10/2025	1345/1445		EU	ECB Press Conference
30/10/2025	1355/0955		US	Fed's Michelle Bowman
30/10/2025	1430/1030	**	US	Natural Gas Stocks
30/10/2025	1515/1615		EU	ECB Lagarde Presents Rate Decision on ECB Podcast
30/10/2025	1530/1130	**	US	US Bill 04 Week Treasury Auction Result
30/10/2025	1530/1130	*	US	US Bill 08 Week Treasury Auction Result
31/10/2025	2330/0830	**	JP	Tokyo CPI
31/10/2025	2330/0830	*	JP	Labor Force Survey
31/10/2025	2350/0850	*	JP	Retail Sales (p)
31/10/2025	2350/0850	**	JP	Industrial Production
31/10/2025	0030/1130	*	AU	Producer price index q/q
31/10/2025	0130/0930	***	CN	CFLP Manufacturing PMI
31/10/2025	0130/0930	**	CN	CFLP Non-Manufacturing PMI
31/10/2025	0700/0800	**	DE	Import/Export Prices
31/10/2025	0700/0800	**	DE	Retail Sales
31/10/2025	0730/0830	**	CH	Retail Sales
31/10/2025	0745/0845	***	FR	HICP (p)
31/10/2025	0745/0845	**	FR	PPI
31/10/2025	0930/0930		GB	Blue Book / Pink Book
31/10/2025	1000/1100	***	EU	EZ HICP Flash
31/10/2025	1000/1100	***	EU	EZ HICP Flash
31/10/2025	1000/1100	***	IT	Italy Flash Inflation
31/10/2025	1000/1100	***	EU	EZ HICP Flash
31/10/2025	1230/0830	***	CA	Gross Domestic Product by Industry
31/10/2025	1230/0830	***	US	Personal Income and Consumption
31/10/2025	1230/0830	***	US	Employment Cost Index
31/10/2025	1230/0830	***	CA	Gross Domestic Product by Industry
31/10/2025	1330/0930		US	Dallas Fed's Lorie Logan
31/10/2025	1342/0942	***	US	MNI Chicago PMI