•
Dollar generally lower in thin trading owing
to US holiday
– No
apparent reason for USD’s general decline
•
USD/JPY higher on speculation about Japan
election
– Talk is
that Abe may call election as a referendum on the next hike in the consumption
tax, delay hike for 1 ½ years. Delay in hiking tax seen as good for growth
– Japan
stocks high 7-year high. Higher Japan stocks = higher USD/JPY
– How high
can $/¥ go? It used to be overvalued by 37%. With current account surplus
falling, it could now be undervalued by 37%. That’d be ¥140. ¥130 seems
possible.
•
NZD rises on possible future rate hike
– RBNZ
financial stability report repeats comments about NZD being overvalued, but
says rates may need to rise again “in coming years”
•
Today:
– Eurozone:
Industrial production for Sep expected to be up mom, but this probably won’t be
enough to reverse negative sentiment towards EUR
– UK:
Unemployment rate expected to decline, average earnings to rise, which could
give GBP a boost. BoE inflation report to bring new forecasts for growth,
inflation
– US:
Wholesale inventories for Sep expected to decelerate
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