Its been one of those predictably quiet Asia sessions ahead of the FOMC but a few highlights none the less
MSCI
With Asia markets back in full swing today after the local holiday, finally some good news for China equities as MSCI is considering increasing the weighting of China A shares in its global index from next year and allowing a group of smaller tech stocks in the index.
While there will be no immediate pass-through impact on the markets as the proposal is still on the table, but it's a definite win for the local sentiment which has been battered mercilessly by the incessant bluster around trade war.
New Zealand
New Zealand September ANZ business confidence for September has come at -38.3 versus -50.3 prior. This is after earlier today the country posted the worst trade deficit on record at NZD1.5bn versus -925mn expected. After last weeks positive GDP print and when combined with Headline business confidence that bounced 12 points to -38 in September, it’s the highest level since May. Traders are even more confident now for a subtle hawkish shift in the RBNZ language. But I think traders remain guarded about long KIWI positioning and a move above .67 NZD/USD unlikely ahead of the FOMC which comes out 3 hours before the RBNZ.
Oil Markets
Oil markets remain well supported in Asia despite the unexpected 2.9 million barrels build in the API report. While US inventory data counts oil prices stay in the bulls domain amid concern that US sanctions on Iranian crude oil exports will result in much tighter physical market conditions once they take effect in November. But with worries circulating the markets could still be underestimating the supply crunch from US sanctions, oil investors remain firmly in buy the dip mode.