– BoJ held policy unchanged, USDJPY fell
– Singapore MAS policy meeting scheduled on 12 October
– US payrolls may disappoint
What to watch for today
RUB: On hold but with risk. Our economists’ base case is that the central bank will keep all three policy rates unchanged, in line with consensus. However, in the last print core inflation rose from 5.5% yoy to 5.7% yoy, which is the upper limit of the CBR’s end-year target. This suggests a relatively high risk (30-40%) that the central bank could chose to hike some of the non-effective policy rates (such as deposit rates) today. If the bank pauses, our economists still expect some tightening of the non-effective rates by year-end. While global macro background is somewhat mixed, RUB remains one of our preferred longs in the EM space given high carry, a hawkish central bank, and elevated energy prices, and we continue to be short USDRUB in our model derivatives portfolio.
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