Talking Points:

Yen Outperforms as Stocks Decline Overnight, Fueling Safe-Haven Demand
Euro May Fall if ECB President Draghi Talks Up Sovereign QE Possibilities
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The Japanese Yen outperformed in overnight trade, rising as much as 0.6 percent on average against its top counterparts. The move paced a decline in Japan’s benchmark Nikkei 225 stock index, pointing to risk aversion as the catalyst for the advance in the safety-linked currency. A parallel drop in iron ore futures hints regional slowdown fears may have been at work following soft Chinese PMI and Japanese GDP data this week.

Looking ahead, scheduled commentary from ECB President Mario Draghi is in the spotlight in European session hours. The central bank chief is due to speak at the European Banking Congress. Draghi has already signaled that a move to “sovereign QE” is a possibility if current easing efforts fall short. From here, traders will be searching for clues about the mechanics of triggering and implementing such a policy turn.

The ECB has yet to implement ABS purchases and will conduct another TLTRO operation in December. That means a new stimulus initiative is unlikely in the near term as policymakers wait to evaluate the full impact existing measures. Still, Mr Draghi may put pressure Euro if his remarks give enough specifics to telegraph the central bank is ready to move on government bond purchases and has a clear vision of when to undertake that step.

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Asia Session

GMT

CCY

EVENT

ACT

EXP

0:20

AUD

RBA’s Heath Speaks in Sydney

–

1:30

USD

Fed’s Williams Speaks in Seoul

–

2:00

NZD

Credit Card Spending (MoM) (OCT)

1.3%

–

0.2%

2:00

NZD

Credit Card Spending (YoY) (OCT)

6.7%

–

4.5%

European Session

GMT

CCY

EVENT

EXP

IMPACT