AUSTRALIA DATA: Q3 Core Inflation Higher Than Expected, Likely RBA Nov Hold
The Q3 trimmed mean was higher than expected rising 1.0% q/q to be up 3.0% y/y up from 0.7% q/q (revised +0.1pp) & 2.7% y/y. On the surface, this looks high enough to keep the RBA on hold on 4 November as it waits for more data, especially as the 2q/2q annualised rate printed at 3.4%. The September monthly outcome picked up 0.2pp to 2.8% y/y. Headline CPI rose 1.3% & 3.2% up from 0.7% & 2.1% in Q2 but remains distorted by government electricity rebates.
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JAPAN: 10-YR JGB Futures Up in Monday Trade
- The 10-Yr bond future is up +0.13 at 135.92 this morning, yet remains below all major moving averages. Above is the 20-day EMA of 136.35.
- The bond market had a fairly subdued week last with the 2-YR finishing the week at 0.92, +1bps higher for the week.
- Bonds are better bid Monday with yield up to half a bp lower in the front end.
- JGB 10-Yr is at 1.65% this morning having ended Friday +1bp for the week.
- A big week for data this week with Industrial Production, Retail Sales, Tankan, S&P PMIs and employment data.
- The NIKKEI hit all time new highs last week and is down Monday by -0.75%
GOLD: Gold & Silver Have Strong Week As More Fed Cuts Priced In
Gold prices finished last week up 2% with a 0.3% rise on Friday to $3759.98/oz supported by a weaker US dollar (BBDXY -0.3%) as the Uni of Michigan consumer data softened. Bullion is now up just over 9% in September. It reached a high of $3783.78 before moderating. It has started today around $3774.0.
- Resistance is at the record high of $3791.1 reached on 23 September with support the 22 September low of $3683.8. The bull cycle in gold remains.
- US PCE price indices for August printed in line with expectations, while income and spending were slightly higher. However, September Uni of Michigan September consumer sentiment was down on August and below consensus and near- and long-term inflation expectations moderated, which supported bullion. The market has almost another 25bp rate cut priced in for the October FOMC decision.
- Silver reached a new monthly high on Friday at $46.63 and was up 16% in September. It rose 2% to $46.08 at the end of the week and is currently around $46.48. The metal is still in an uptrend with the bull cycle extended last week as it rose 7% w/w. It breached a number of resistance levels on Friday.
- Equities rallied with the S&P up 0.6% and Euro stoxx +1.0% and the S&P e-mini is up 0.1% so far on Monday. Oil prices were higher with Brent +0.5% to $69.75/bbl. Copper rose 0.1%.
US TSYS: Cash Open
TYZ5 is trading 112-12+, up 0-04 from its close.
- The US 2-year yield opens around 3.635%, down 0.01 from its close.
- The US 10-year yield opens around 4.166%, down 0.01 from its close.
- 10-Year yields persisted with its probe of the 4.20% area, I suspect buyers continue to be around 4.20% initially and look to fade the move higher. The jobs data if released will be key this week. A move back above 4.35%/4.40% is needed to negate the downtrend.
- MNI FED BRIEF: Fed's Barkin-Jobs Shakier, Inflation Less Troubling. The U.S. employment outlook has deteriorated following recent weakening in payroll growth and large downward revisions to past numbers, while inflation has not risen as much as had been feared due to tariffs.
- MNI US DATA: PCE Spending Looks More Robust After Revisions. August's PCE spending and income data showed robust spending dynamics, especially when strong upward revisions to Q2 are considered. However, the income data didn't cast quite as solid a light on the underlying dynamics.
- Data/Events: Pending Home Sales, Dallas Fed Manf. Activity
