There
were high expectations for game-changing fiscal stimulus to be
announced at China’s NDRC press conference today. In the week
leading up to the long holiday monetary stimulus announcements and
implementation drove Chinese markets higher. More of the same was
expected today, but this time from even more important fiscal
stimulus. But, there was no such stimulus announced.

(Mainland)
Chinese equities leapt higher right at the opening but soon subsided
as the disappointing news conference got underway. Hong Kong stocks
had their rally during the long mainland holiday, these dropped hard
on the session.

As
I post Chinese equities are back off their lows.

AUD
and NZD also fell on the disappointment.

–

Apart
from the China news we had plenty more.

St.
Louis Federal Reserve President Alberto Musalem spoke, saying he
supported the recent FOMC 50bp rate cut, but added that he is in
favour of more gradual further rate cuts.

The
Reserve Bank of Australia released the minutes of its September
meeting. The message from the Bank in these minutes is that a rate
cut is not imminent. The minutes emphasized that policy will need to
remain restrictive until Board members are confident inflation is
moving sustainably towards the target range. Of likely even great
significance were the lines explaining that members considered a
formal analysis in which the economy’s supply capacity was more
limited than currently assumed. Limited supply capacity will have a
tendency to encourage inflation. If you argue that there is nothing
the RBA can do about supply constraints you are correct, but what the
RBA will do is work with interest rates (higher for longer) to cap
demand (and thence inflation).

Reserve
Bank of Australia Deputy Governor Andrew Hauser spoke later, also
saying the inflation response is not yet over.

Australian
business confidence and conditions data improved in September.

From
Japan we had wages data, where real (inflation adjusted) wages fell
for the first time in three months. This prompted Japan economy
minister Akazawa to say it was not good news. Sustained wage growth
is what the Bank of Japan wants in order to raise interest rates
again after its first hike in 17 years in March and follow-up hike in
July. This data point will give them something to worry about.

USD/JPY
did not have a large range today.

–

I
should add a little on a curiosity during the session. If you glance
at your ES and other US equity index futures charts you’ll see a
sharp dip around 2230 GMT (1830 GMT) that coincided with social media
reports of Federal Reserve Chair Powell speaking. Of course, Powell
had no speaking engagement and I am not sure where the headline came
from (“JEROME POWELL: PENCILS IN POLICY PATH “SLIGHTLY ABOVE”
THE MEDIAN”). It coincided with, even more significantly,
unconfirmed reports of explosions in Isfahan, Iran. Isfahan is the
site of key Iranian nuclear facilities. These reports remain
unconfirmed as I post.

US
equity index futures soon bounced back, but these imaginative headlines
added to volatility during the session.

Shanghai Composite up, Hang Seng down: