We had Q3 CPI data from New Zealand today, showing that its inflation rate dropped back into the Reserve Bank of New Zealand's target band for the first time since early 2021. The CPI is also encouraging for the central bank as it came in slightly below their most recent forecasts (issued in August).

The New Zealand dollar lost more ground on the data, NZD/USD hit its lowest since August. It wasn't just the CPI, though, sentiment continued to weaken towards the Chinese stimulus rollout. Chinese stocks fell on this factor also.

Also weaker was the Australian dollar.

Later in the New Zealand day the Reserve Bank of New Zealand published its own inflation data, the sectoral factor model. While the earlier, StatsNZ, CPI came in at 2.2% y/y the RBNZ's model came in much higher, at 3.4% y/y. Both NZD/USD and AUD/USD have recovered some ground (as I write).

Speaking of disappointment over Chinese stimulus there was a very interesting piece in the Wall Street Journal saying the objectives in China are to bail out indebted local governments and prop up the equity market. Boosting consumer demand is not a high priority. There is a summary in the points above.

From Japan today we had very disappointing machine orders data. About the best that could be said for it is that this is a volatile data set so maybe it'll bounce next month. Bank of Japan Board Member Adachi spoke. He reiterated that rates will be raised, but only gradually. The Bank of Japan meet later this month and expectations are for no rate hike. Adachi's comments support this expectation. The BOJ meet again in December and a hike is a possibility though.

USD/JPY dropped under 149.00 on Adachi but soon stabilised above the figure.

Reserve Bank of Australia Assistant Governor Hunter spoke in Sydney, saying inflation expectations have not become de-anchored. Hunter didn't give any hints on when the RBA might begin its cutting cycle. Market expectations centre on Q1 2025.