The dollar is falling, the dollar is falling, the dollar is...

The dollar is falling, the dollar is falling, the dollar is falling.
Aussie, Aussie, Aussie.
Yuan! Yuan! Yuan!!!

;-)

Happy holidays.

ASIA METALS – Metals trade softer; lack of liquidity as Chinese holiday starts
Posted on October 1, 2014 by Lynette Tan

Base metals were mostly lower this morning, despite Chinese data released this morning showed growth momentum was largely stable in September. The Golden Week holiday has also started in mainland and liquidity is expected to be thin going forward. Latest data out this morning showed the official Chinese PMI coming in at 51.1 as expected and maintaining manufacturing growth at the same momentum as the previous month. The final manufacturing PMI out of Japan also showed an expected 51.7.

“China’s official PMI remained unchanged at 51.1 percent in September. Both official PMI and HSBC PMI are showing a similar trend that the Chinese economy has stabilized in September after an unexpectedly sharp fall in August,” said economists at OCBC Bank. Over in Hong Kong, despite it being a National day holiday, pro-democracy protests continued on and the world will be watching the reaction from the Chinese government.

Today marks the deadline the protestors have for their government to consider the electoral reforms they are asking for.

In currencies, the dollar index continues to hit a fresh four-year high of 86.22 last night as EU core CPI at 0.7 percent missed the expected 0.9 percent, putting further pressure on the ECB to use further unconventional momentary policy to stoke inflation. The day ahead will have investors focusing on manufacturing data out of the US, as well as the ADP non-farm employment change.

In the metals, copper fell to its lowest since June, hitting a trough of $6,637 this morning but is now last seen at $6,643, $24 below Tuesday’s close. Volumes are much lower than usual, with less than 500 contracts done so far. Spreads remain tight, with benchmark cash/threes around $55, cash/November at $30 back and Cash/Dec at $46.50 back.

"Some of the increase in prices over the last couple of days is likely to have been short covering ahead of the Chinese holidays, while, with the LME spreads remaining tight, a lack of Chinese speculative selling and potential for further short covering over the course of the next week could make for an interesting few days,” said commodity strategist Leon Westgate from Standard bank.

Aluminium at $1,949 is down $11 – with stocks once again down to fresh lows, falling 5,875 tonnes to 4,620,175 tonnes. Cancelled warrants were up 12,350 tonnes at 2,590,825 tonnes, with the Vlissingen total up 6,900 tonnes and Singapore up 8,325 tonnes. Nickel was indicated at $16,261, down $39, after stocks jumped to yet-another fresh all-time high on Tuesday, up 2,700 tonnes to 356,040 tonnes. Stocks have risen 16.6 percent since the start of the third quarter and 36.2 percent since the start of the year.

"Nickel prices were hit hard today by a combination of dollar strength, increasing concerns over the Chinese metals demand picture and yet another hefty warehouse stock increase,” said a note from broker Triland Metals.

"Somewhat surprisingly, and worryingly for the bulls, is the fact that we have also been seeing trade selling on the fall. It suggests that physical longs, previously unhedged, are biting the bullet.”

Zinc at $2,272 lost $16, while lead is $20 lower at $2,079. Tin is down to a fresh two-month low at $20,140, down $170 with stocks down 775 tonnes at 8,595 tonnes.

See more at: http://www.fastmarkets.com/base-met...ese-holiday-starts-82580#sthash.Z5gsrXUU.dpuf