Asia took a negative handover as the major equity indices closed in negative territory at US close yesterday. It seems markets are trying to find the bottom. Asia did not make much of the sentiment at US close as major equity inidices look mixed so far this morning.

Overnight data from China showed that September Y/Y inflation (CPI) data expereinced a 2.5% increase compared to a previous 2.3%. However Producer Price inflation (PPI) for the same period cooled to 3.6% from a previous 4.1%. The importance of PPI is that it may help give us a flavour on what is next for consumer inflation, as changes in prices for producers often are reflected into consumer prices eventually – however this is not a hard and fast rule.

US dollar looks supported this morning as it attempts to rcover some of yesterday’s losses as seen on the US Dollar Index. Yesterday US reported weaker Advance Retail Sales for the month of September.

Throughout the night as well the RBA released its 2nd October meeting minutes. No major breaking news from the Australian Central Bank, but we know that although a next rate move higher may be on the cards it is not expected in the near term.

Later today we are expecting the German Zew and US industrial production data amongst other data.