FX Update: Both the dollar and yen have continued to hold firm
FX Update: Both the dollar and yen have continued to hold firm against most other currencies amid a backdrop of sputtering global stock markets. The Australian dollar dove following the release of Australia's October employment report, which showed the unemployment rate ticking higher, to 5.3% from 5.2%. China's industrial production growth also slowed sharply in October, to 4.7% y/y verses the median forecast for 5.4% growth, with investment growth falling to a record low. Chinese sales also underwhelmed, while preliminary Japanese Q3 GDP disappointed with growth of just 0.1% q/q, with a 0.7% q/q drop in exports shining a light on the impact of trade protectionism. On a brighter note, German Q3 GDP came in at 0.1% versus the 0.0% median forecast, though Q2 growth was revised lower. The data still helped the euro lift moderately. EUR-USD climbed back above 1.1000 after earlier carving out a fresh one-month low at 1.0994. The yen remained underpinned by safe-haven positioning, albeit moderate. USD-JPY printed a nine-day low at 108.62, while both EUR-JPY and AUD-JPY hit new one-month lows, with both now amid a fifth consecutive day of decline. The Australian dollar dove by over 0.5%, driving AUD-USD to a one-month low at 0.6795, and the AUD-NZD cross to a 10-week low, at 1.0625. The cross has declined by nearly 2% since the RBNZ unexpectedly refrained from cutting interest rates yesterday. Cable drifted the the lower 1.2800s from levels above 1.2850, but has so far remained above the low seen yesterday at 1.2822. Asian equities have been mixed today, with the main indices in Japan and Hong Kong down, China flat while Australian and South Korean markets managed to rally. S&P 500 futures are showing a 0.2% decline after the regular cash version of the index closed on Wall Street yesterday with only a fractional net gain. Of note, a new Reuters poll found that most economists are not expecting the U.S. and China reach a permanent trade deal over the coming year.