In the night markets got familiar with two important publications. First, about 01:30 we got to know the results of consumer inflation in the Land of the Rising Sun, then about 02:00-02:30 new home sales and producer price index (PPI) in Australia. The main event of the Friday session will be the publication of results of the US GDP.
Consumer inflation the Bank of Japan down
According to a September report on core CPI inflation published by the Bank of Japan, the dynamics of prices in the Land of the Rising Sun sank to the level of +0.2% (forecast +0.3%), compared to +0.4% observed in August.
Once Haruhiko Kuroda so boldly and clearly talks of the possibility of “overshoot” target inflation and pushing her even in the area of 4%, today’s result seems at least unfavorable.
BoJ inflation in historical perspective presented in the chart below. From 2016 we observe endless declines.
The response to the poor performance of the unnamed source quoted by Reuters news agency, which said that “the days of radical attempts to raise inflation expectations using unexpected and shocking actions within polmone already ended. Haruhiko Kuroda leaves regime changes and will announce it during the next meeting of the central bank. “
As a result of publication of data on the Japanese yen we have not seen stronger moves. These were brought in European morning, when the continent began investing. Popular ninja tested session highs from Thursday – so far didn’t manage to defeat them:
Australian PPI and sales of new homes
Also at night (in the 02:00-02:30) there have been publications on macroeconomic Australian producer price index (PPI) and new home sales.
In the case of PPI quarterly growth rate reached 0.3% compared to the second quarter, while the annualized + 0.5% in relation to September of last year. As far as for the comparison of quarters the result is much better, in annual terms, we observed a stronger deceleration in the positive dynamics.
In terms of sales of new homes, markets watched appreciation second month in a row Housing Industry Association (HIA) reported that according to a monthly survey of new real estate sales rose by 2.7% in October, which is another positive result after + 6.1% in September.
The publication in historical perspective is presented in the following graph:
For AUD / USD at night we watched the test of a gentle rebound, but during European morning Aussie reaches new two-week lows. All this is a effect of the supply formation – pin bar on the graph D1 (just below the peaks of the July 0.7658). On Thursday, the signal brought strong depreciation, and today it continues:
US GDP most important publication on Friday
At this point, Friday macroeconomic calendar shows that before us are the results of the German CPI (14.00), the publication of US GDP (14:30), and report of results of consumer confidence made by the University of Michigan (16:00). Among these publications, the markets will be most interested in the American GDP.
According to consensus estimates, quarterly preliminary reading of gross domestic product for the third quarter are expected to be from 2.3% to as much as 2.9%. The median reported by Bloomberg falls in the vicinity of 2.6% (quarter on quarter).
At the same time, Goldman Sachs forecast that the final reading wiil be + 2.9%. Such spike should be supported by improving export performance, strong consumer spending, capital spending and a lower inventories.
Publication on the EUR / USD certainly be able to induce stronger movements. At this point, Eurodollar is again below the level of June lows, drawing in the past two sessions clearly bearish pin bars. For traders it may be a signal that allows opening short position – but it is worth to wait to the afternoon of data:
