Tuesday, October 21, 2014

AUD gains as Chinese GDP beats estimates

     ECB buys covered bonds in modest start to “QE-light”
    Buys estimated EUR 800mn of French and Spanish covered bonds
    Modest move fails to reassure markets; peripheral bond yields move higher nonetheless, European stocks fall
    By contrast, US markets perform well:  stocks end higher, VIX falls steadily
     USD/JPY falls most as Japanese stocks fall, politics get messy
    Two female Cabinet ministers resigned amidst allegations of financial impropriety
    Abe’s popularity is nearing the danger level; will make it hard for him to raise the consumption tax again (decision due by end of this year)
    Abandoning “Abenomics” could cause yen to strengthen, or could force BoJ to increase monetary stimulus and weaken yen further
     AUD gains as Chinese GDP beats estimates
    GDP slows nonetheless; no big plan by Chinese govt to boost growth
    RBA still complaining about strong AUD; likely to weaken again, in my view
     Today:    Eurozone, UK: No major indicators out

                               US: Existing home sales for September expected to increase

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