Market News

For China’s money markets, daily fixed-rate overnight operations should mean tighter control of short-term funding costs and less of the month-end and tax-season volatility that has periodically rattled interbank rates. The shift also changes what traders will watch: the overnight rate, not the seven-day rate, now looks set to become the signal of PBOC intent, so any future adjustment to the 1.25% level will be read as a policy move. With October PMIs in contraction and equities coming off their worst month in more than a decade, a cleaner transmission channel gives Beijing a sharper tool if it decides to lower borrowing costs. For the yuan, the change is structural rather than directional, but it modernises a framework global investors…

The beat offers some relief after Saturday’s weak official survey and may give modest support to China-sensitive assets such as the yuan, the Australian dollar and industrial metals at the start of the week. The price detail is less encouraging. Falling output and export charges driven by fierce competition point to continued disinflationary pressure from Chinese factories, which global markets could feel through cheaper goods exports. The gap between the export-tilted private survey and the broader official index also complicates Beijing’s stimulus calculations: it suggests pockets of strength in investment goods and exports even as wider activity softens. Confidence at a nine-month low is a reminder that the solid headline may not last…

While I'm considering this gold swing-long trade idea, I'm also watching several developments across other markets.

In crypto, I'm following Bitcoin's attempt to defend $76,300 support and potentially break above $79,000 after the technology stock selloff and the $6.3 billion Binance hack.

Meanwhile, as Eamonn Sheridan at investingLive reported, oil traders face fresh geopolitical uncertainty after Iran claimed two tankers struck mines in the Strait of Hormuz, alongside a conditional proposal to reopen the waterway.

Eamonn also highlighted three other developments worth watching: the US daylight saving time change, which moves the Wall Street cash session an hour later for traders in Asia and Europe; reports that China's central bank and…

With a hike almost fully priced, the bigger risk for the Australian dollar and short-dated bond yields may be a surprise hold rather than the move itself. Attention is likely to shift to the RBA’s guidance and the refreshed forecasts in its quarterly Statement on Monetary Policy, which will show whether the board sees inflation returning to target without further tightening. A hike paired with a clearly hawkish bias could support the currency, while any acknowledgement that weaker growth is doing more of the work would point to a peak. Higher fuel and shipping costs linked to the Middle East war remain an upside risk to the inflation outlook the board has to weigh.

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Earlier:

• RBA set for fifth 2026 hike to 4.85% as banks flag risk of…

Earlier, some important news:

• China’s central bank, regulators to meet on stock support after record 12-week slide

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The People’s Bank of China is due to set the daily USD/CNY reference rate at around 0115 GMT (2115 US Eastern time), a fixing that remains one of the most closely watched signals in Asian foreign exchange markets. China operates a managed floating exchange rate system, under which the renminbi (yuan) is allowed to trade within a prescribed band around a central reference rate, or midpoint, set each trading day by the PBOC. The current trading band permits the currency to move plus or minus 2% from the official midpoint during onshore trading hours. Each morning, the PBOC determines the midpoint based on a range of inputs.…

The benefit itself is modest in scale, but it sits alongside a proposed two-year cut to the consumption tax on food, which keeps Japan’s fiscal trajectory in focus for bond investors. Any sign that the combined package grows beyond the reference figures could add to upward pressure on long-dated Japanese government bond yields and weigh on the yen, given persistent market sensitivity to Tokyo’s borrowing needs. For now, Katayama’s insistence that no proposal has been tabled limits the immediate market read. The bigger signal will come from the final design and from how the revenue loss from the food tax cut is funded.

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Tokyo is pencilling in a small, sliding-scale cash benefit for low-paid workers alongside a temporary food tax cut, while…

The survey keeps Japan’s factory sector in solid expansion while showing price pressure starting to build again, which supports the case for continued policy normalisation by the Bank of Japan. Stronger input inflation linked partly to oil, together with hiring close to its fastest pace in years and rising backlogs, points to a tight goods sector rather than a weakening one. For the yen, the data lean modestly supportive if they reinforce expectations of tighter policy. Semiconductor-related demand remains the key growth driver, so Japanese chip and equipment stocks remain exposed to any shift in the AI investment cycle. Higher energy costs tied to the Middle East war are an upside risk to Japan’s goods inflation.

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Earlier:

• Japan weighs…

Katayama’s remarks keep the threat of intervention in the background without signalling that action is imminent, and the yen’s weakness on the session suggests markets see little immediate deterrent. Her refusal to judge current levels, and her comment that conditions have improved, read as a holding pattern rather than an escalation in verbal warnings. Pointing to the joint statement with the US is a reminder that Tokyo believes it has room to act if moves become disorderly, which may make traders more cautious about pushing the yen sharply lower in a short period. A weaker currency also adds to import costs at a time when Japanese manufacturers are already reporting firmer input price inflation.

-- Katayama reminded markets that Tokyo…

The change doesn’t alter exchange hours, but it does shift when global liquidity overlaps. Asia-Pacific desks now see US cash trading start and finish an hour later on their clocks, which narrows the gap between the Wall Street close and the Asian open and changes when US-driven moves first reach Asian markets. For Europe, the London and New York overlap returns to its normal winter shape after a week in which the US was an hour closer than usual. The main operational risk is mis-timed orders, alerts and automated strategies set to local clocks, particularly around US data releases and the Sunday futures reopen.

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The exchanges haven’t moved an inch, but for anyone trading New York from Sydney, Tokyo or London, Wall Street just pushed…

BTCPay Server, the open-source software many merchants use to accept Bitcoin payments without a third-party processor, has told operators to shut down their instances after receiving reports that hot wallets on multiple servers were being drained by unauthorized attackers.

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Adding to concerens re the drain last week:

• investingLive Asia-Pacific market news: Binance hack shakes crypto

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In a post on X, the project asked anyone running an instance to take it offline with its shutdown command until the investigation is complete. BTCPay has not yet disclosed the cause of the attack, how many servers were affected or how much was taken.

A hot wallet is one whose private keys sit on an internet-connected server, so it can send funds…

Hartnett’s call puts tech credit in contrast with tech equities. Bond investors are being paid more to fund the AI build-out, while shareholders are losing the buyback support that underpinned megacap returns for years. Wider default swap spreads across the biggest names show credit markets are still pricing AI as a distinct risk, although Oracle’s retreat from its October peak hints at some stabilisation. For equities, the Roundhill Magnificent Seven ETF closing Friday just below Hartnett’s $70 threshold is an early warning on his year-end rally framework. With long-dated Treasury yields still elevated and central banks tightening, the rate backdrop remains the main obstacle to a broader recovery in risk appetite.

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After a year of being…

The survey has an uncomfortable mix for policymakers: demand and output are contracting, but input costs and selling prices are rising faster. Firms cited higher interest rates among the reasons for weaker orders, while the pricing data suggest inflation pressure in the goods sector is building rather than fading, which complicates any case for policy relief. The Middle East war is feeding directly into Australian factory costs through fuel, freight and delivery delays, so further escalation around the Strait of Hormuz poses an upside risk to goods inflation. For the Australian dollar, the release adds to signs of softer domestic activity without offering a clear disinflation signal.

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RBA expected to raise its cash rate on Tuesday,…