Yuan

• Canada's Trudeau topples PM Harper in shock election win (Reuters)
• Where Canada’s Harper Hit Hurdles (WSJ)
• Pugnacious Trudeau Steps Out of Father's Shadow and Into Power (BBG)
• European Stocks Decline, Euro Rallies as ECB QE Optimism Fades (BBG)
• Valeant, Under Pressure About Price Increases, Plans Changes (WSJ)
• Syrian rebels say they receive more weapons for Aleppo battle (Reuters)

After yesterday's closing ramp "prudently" just ahead of an abysmal IBM earnings report with the lowest revenues since 2002, and the latest rally in capital markets which sent European stocks to their highest level since August on the back of a barrage of global bad data which has unleashed the Pavlovian liquidity dogs screaming for moar central bank bailouts, this morning has seen a modest decline in the Stoxx 600 driven by energy names, while S&P500 futures are set to open lower on IBM's disappointment at least until the latest massive BOJ USDJPY buying spree sends the pair to 120 and the S&P solidly in the green. The biggest political event overnight was the Canadian election, where Trudeau's liberals swept PM Harper from power, capping the biggest political comeback in the country's history; the Canadian dollar is largely unchanged after initially weakening then rising.

"Now we know why they have been pushing so hard. Maybe they were banking on more suppliers rolling over on the terms. I just worry that this is a slippery slope of them going in this direction."

UPDATE: He's back - GEITHNER: YUAN CAN BE SIGNIFICANT RESERVE CURRENCY IN LONG TERM

As everyone opined on China's 'goldilocks' GDP data all day long, perhaps the biggest news this evening was US Treasury's softer stance towards China's currency 'manipulation', as we noted earlier, saying Yuan is merely "below appropriate medium-term valuation," and sure enough offshore Yuan has strengthened since the report. China's 'official' mouthpiece Xinhua told the people it is "unnecessary to be anxious about China's economic growth." And finally, for the 8th straight day, Chinese margin debt rose today to its highest in over a month. This is the longest stretch of releveraging in 4 months - since the peak of the bubble. "Will they never learn?"

We presume the 'threat' of selling hundreds of billions of dollars of US Treasuries has prompted a softening in the "Currency manipulator" rhetoric from The US Treasuy department. Having previously said the Yuan is "significantly undervalued," today's report shifts the comment to stating that the Yuan is "below appropriate medium-term valuation." Of course, The US Treasury would know exactly how all of the world's currencies should trade in this centrally-planned world.

Despite the intense pain they are suffering in the low price Crudedome, both the Russian and Saudi governments profess for public consumption that they are committed to their volume and market share policies. This observer believes the two countries cannot long withstand the pain they have brought upon themselves - and this article only scratches the surface of the negative impact of low crude prices on their economies. They have, in effect, turned no pain no gain into intense pain no gain and set in motion the possibility neither will exit the low price Crudedome under its own power.

For the second time this year, China's GDP deflator turned negative, meaning that in addition to any deliberate misrepresentations, Beijing may also be overstating GDP by way of a statistical shortcoming. Ultimately, they're habitually understating inflation for domestic output which means that "real" GDP is probably less "real" than nominal GDP. 

The LBMA wants to boost transparency and invited the market to suggest improvements including considering a new electronic platform that may lower trading costs and improve efficiency.

While the macro watchers were keenly awaiting China's macroeconomic data dump on Sunday night, which was far worse than reported (as we will show shortly), a just as notable development was taking place in China's microeconomic world, where as the FT reported on Sunday, China's state-owned SinoSteel, the country's second largest importer of iron-ore, and a major miner and steel trader (yes, another commodity trader) was "poised to default on its bonds this week, the latest test of whether Beijing is willing to impose market discipline on national champion companies."

• Great News: China’s GDP Growth Beats Forecasts as Stimulus Supports Spending (BBG)
• Oh wait, maybe not: China GDP: Deflategate Comes to Beijing (WSJ)
• Actually, definitely not: Shanghai rebar falls to record low after weak China GDP (Reuters)
• But who cares: European Shares Gain on Earnings as Bonds Drop, Metals Decline (BBG)

AsiaPac stocks were generally lower heading into the all-important Chinese macro data (S&P -6pts, Japan -0.7%, China -0.2%) as JPY erased Friday's ramp and crude dropped back below $47. The PBOC left the Onshore Yuan fix practically unchanged (following Friday's significant devaluation). Then the data hit... China GDP beat expectations (printing 6.9% YoY vs 6.8% exp) but is still the lowest growth since Q1 2009. Industrial Production missed (printing 5.7% YoY vs 6.0% exp). Retail Sales beat (10.9% YoY vs 10.8% exp). The initial reaction was kneejerk buying in USDJPY and stocks but that is fading as "good news" will relieve The Fed's angst over growth...

In the absence of any key economic developments in the Asian trading session, Asian stocks traded mostly under the influence of the late, pre-opex US ramp momentum courtesy of another day of ugly economic data in the US (bad econ news is good news for liquidity addicts), closing solidly in the green across the board, led by China (+1.6%) and Japan (+1.1%) thanks in no small part to the latest tumble in the Yen carry trade, which mirrored a bout of USD overnight weakness. And since a major part of the risk on move yesterday was due to Ewald Nowotny's comments welcoming more QE, news from Eurostat that Eurozone CPI in September dropped -0.1% confirming Europe's deflation continues, should only be greeted with even more buying as it suggests further easing by the ECB is inevitable.

After two days of relative USD carnage in and across the emerging and asian FX markets, early AsiaPac trading this evening is seeing that trend revert with the Ringgit, Rupee, and Lira sliding. After-hours gains in US equity futures have been erased, despite USDJPY's continued BoJ-aided push higher (though it seems 119.00 is the new ceiling for now). China's government bonds remain extraordinarily bid (outperforming TSYs by almost 60bps in the last few weeks) with yields dropping to 6-year-lows, as corporate bond bubble fears rotate modestly back to govvies. Aussie miners are under pressure with Iluka Resources getting hammered on "excess capacity" warnings.

News That Matters

• China economic growth seen slowing despite policy easing (Reuters)
• FBI, Justice Department Investigating Daily Fantasy Sports Business Model (WSJ)
• Obama to slow pace of withdrawal of U.S. troops from Afghanistan (Reuters)
• Corporate America's Epic Debt Binge Leaves $119 Billion Hangover (BBG)
• Islamic State battles insurgents as Syria army prepares assault (Reuters)
• Why Hillary Clinton Can’t Win by Going After the NRA (BBG)