Aussie Recovers As RBA Softened Intervention Talks

Australian dollar recovers mildly today after RBA's comment on intervention. The aussie weakened since RBA governor Steven said he's "open-minded" on intervention. RBA deputy governor Lowe reiterated that the central bank doesn't rule intervention in or out. But he also noted that it "has been a long-standard practice". Also, Lowe emphasized that the threshold for intervention is "fairly high". The comments were seen as aiming at playing down the impact of Steven's talk on intervention and indicates RBA isn't close to intervening to curb Aussie's strength. Regarding the economy, Lowe noted that Australia can "no longer depend on a rising terms of trade and favorable demographics". And he warned that if the lift in productivity growth does not take place, Australian would need to "adjust to some combination of slower growth in real wages, slower growth in profits, smaller gains in asset prices and slower growth in government revenues and services".

The minutes of BoJ's October 31 meeting showed that some members saw downside risks to the economy and price stability and urged the board to focus on these issues. Takehiro Sato said downside risks to price stability is higher than the upside risks. Sayuri Shirai also urged BoJ to pay attention to the downside risks as there was "a high degree of uncertainty" regarding medium term developments. At the meeting, BoJ let rates unchanged at 0.1% while keeping the monetary base expansion at an annual pace of JPY 60-70T.

Elsewhere, SNB president Jordan said overnight that the ,"minimum exchange rate remains indispensable to ensure price stability in Switzerland". And, there is, "absolutely no reason at the moment for SNB to abandon the current minimum exchange rate for the euro-franc." Also, he emphasized that currently, the, "franc is still highly valued and there is no risk of inflation." SNB will have the next policy meeting on December 12 and there is no expectation on any change in the central bank's policy.

On the data front, Japan corporate price index rose 0.7% yoy in October versus expectation of 0.9% yoy. US data will be the major focus today. Both September and October housing starts and building permits are expected to be released. S&P case-shiller 20 cities index is expected to rise 13.0% yoy in September. House price index is expected to rise 0.4% mom in September. Meanwhile, conference board consumer confidence is expected to improve to 72.1 in November.