The risk-on lights are a bit dimmer today as the hopes for a near term tariff roll back fade.
PBoC
The PBoC skipped open-market operations for a 13th straight trading day, citing a relatively high level of liquidity in the banking system.
Yuan
The yuan dipped as the prospects for phase one tariff rollback deal dimmed after the President failed to dangle any tangible trade talk details in his NY speech and disappointing the street. Similarly, the rest of USDAsia continues to cover short dollar risk.
In fact, the President's “failure to dangle "is impacting every cross-asset class. President Trump didn't exactly come across as a willing deal maker overnight and if he intended to leave the market in a state of tariff rollback limbo, job well done.
Oil
The oil market has been off to low volume start in Asia, but the selling bias remains. The outlook continues to look grim in the absence of a decisive tariff rollback which is getting amplified by OPEC + signaling a reluctance to make deeper production cuts.
Still, If OPEC maintains current crude output limits through next year and applies a stricter compliance mechanism it will help with the rebalancing while offering up some modicum of downside insurance. But with so much wrapped up in trade war sentiment, it's hard to weave a convincing bullish argument today.
If anything market movements continue to highlight the lack of new drivers, with price movements largely following sentiment on the outlook for the OPEC+ agreement and US-China trade. A 1.2mb decline in Cushing inventories in the week to 8 Nov (reported by Genscape) following 5 consecutive weekly builds was bullish for oil however and should lend support into the API data.
Bonds
After a very active two-way flow in TIPS to start the week the markets have begun to take profits and position square ahead of the US CPI data due out in NY Wednesday which may or may not lend further support to the shift higher in US bond yields. Still, any weakness in the data may potentially reverse the recent positioning-based selloff in nominal bonds.
Gold
Given Gold's tight correlation to UST 10 y yields, we could expect some short position squaring ahead of the US CPI print.
RBNZ
The RBNZ leaves its cash rate unchanged at 1.00%, against expectations of a 25bp cut. NZD/USD gapped to a high of 0.6422 from 0.6335 post-RBNZ.