AUSTRALIA DATA: Quarterly NAB Survey Positive On Economic & Jobs Outlook

US Equities, just another day and another all-time high, nothing stops this train. This morning US futures have opened a little lower, E-minis -0.02%, NQU5 -0.02%. The JPY performance in the crosses is pretty mixed with EUR/JPY trying to regain its upwards momentum and the rest  seem to be stalling or in NZD/JPY’s case moving lower.

• EUR/JPY - Overnight range 173.84 - 174.39, Asia is trading around 174.40. The pair has found decent buyers and is back up towards its recent highs looking to regain the momentum higher. First support seen back towards the 173.00 area.
• GBP/JPY - Overnight 199.38 - 199.79, Asia trades around 199.65. This pair could not extend its break higher and has failed again above 200.00. Buyers need to reassert the momentum higher again soon or the probability of a deeper pullback increases. First support seen back towards the 198.00 area.
• NZD/JPY - Overnight range 86.50 - 86.82, Asia is currently dealing 86.50. This pair remains the outlier thanks to the poor NZ GDP data last week, while below 88.00/88.50 I continue to have a bias lower. Anyone looking for a vehicle to express a long JPY in the crosses should look to this pair, if cross JPY does move lower NZD/JPY should lead.
• CNH/JPY - Overnight range 20.7515 - 20.8377, Asia is currently trading around 20.7500. This pair has remained above its pivotal 20.30/20.40 support. The pair continues to trade sideways comfortably within its recent 20.40-21.00 range.

Fig 1 : CNH/JPY 2H Chart

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

Hong Kong Exchanges and Clearing Limited (HKEX) announced Monday the addition of the one-year Loan Prime Rate into the floating reference rate options under Northbound Swap Connect, the latest in a series of initiatives to expand the scheme, Securities Daily reported. A total of 31 onshore and offshore institutions conducted 53 transactions of one-year LPR referenced interest rate swaps, with an aggregate nominal value of CNY6.46 billion. This will provide more tools for international investors to manage the interest rate risk of their yuan-denominated portfolio, the newspaper said.

There remains room for a policy interest rate cut and a lower Loan Prime Rate this year, given the need to boost domestic demand and support the property sector, said Wang Qing, analyst at Golden Credit Rating, after September’s LPR was left unchanged on Monday. The People’s Bank of China could guide the five-year LPR lower in Q4 to drive down mortgage rates, Wang estimated. However, Dong Ximiao, chief researcher at Merchants Union Consumer Finance, argued that cutting the reserve requirement ratio would be preferable to interest rate reductions, noting that a sharp fall in the LPR would pressure banks’ net interest margins at a time when scope to reduce deposit rates is limited. (Source: Shanghai Securities News)