ECONOMIC DATA OF THE DAY

Time	CY	Indicator	Forecast	Previous
10:00	JPY	Nikkei Japan PMI Mfg	N/A	49.3
13:00	SGD	CPI YoY	-0.50%	-0.70%
15:00	EUR	Markit France Manufacturing PMI	48.8	48.6
15.30	EUR	Markit/BME Germany Manufacturing PMI	53.6	53.8
16:00	EUR	Markit Eurozone Manufacturing PMI	52	52
22:00	USD	New Home Sales	580k	592k

(Source: FabTrader)

SPEECHES

• 12:00: JPY: - Kuroda Speaks at BOJ’S Fintech Conference
• 18:30: EUR: - ECB’s Coeure Lane, Smets on Panel in Geneva

OVERNIGHT NEWS

• NEW ZEALAND: 
• New Zealand central banker Graeme Wheeler said while he intends to lower interest rates further to revive inflation, a series of rapid cuts is not justified:
• We do not believe that the outlook and balance of risks warrants a position of no policy change, nor a position of rapid easings
• Rapid ongoing decreases in interest rates would likely result in an unsustainable surge in growth, capacity bottlenecks, and further inflame an already seriously overheating property market.
• Low headline inflation could bring down inflation expectations in a self-perpetuating spiral that would be difficult to correct, which was the main reason for the bank’s decision to ease rates this month
• Cutting rates too quickly “would use up much of the bank’s capacity to respond to the likely boom/bust situation that would follow, and place the Reserve Bank in a situation similar to many other central banks of having limited room to respond to future economic or financial shocks
• US: 
• Chicago Fed National Activity Index rose to +0.27 (Mkt est: +0.20) from +0.05 in June . The sales, orders, and inventories category inched up to +0.01 from – 0.01. The contribution of the personal consumption and housing category was steady at – 0.06. It is a watched barometer of national economic activity and it improved to a year high during July

FOREIGN EXCHANGE (INDICATIVE RATES)

Currency	Last	% Change	Overnight Range
DXY	94.56	-0.28%	94.443 – 94.958
EURUSD	1.1328	0.28%	1.1271 – 1.1331
USDJPY	100.13	-0.40%	100.21 - 100.93
AUDUSD	0.764	0.53%	0.7584 – 0.7644
GBPUSD	1.3143	0.64%	1.3035 - 1.3157

(Source: FabTrader)

COMMODITIES (INDICATIVE RATES)

Currency	Price USD	% Change	Overnight Range
Gold	1337.40	0.13%	1331.82 - 1340.18
Silver	18.87	0.47%	18.8275 - 19.0655
Oil (BRENT)	49.16	2.34%	49.15 - 50.48
Oil (WTI)	47.28	1.88%	46.75 - 48.32

(Source: Bloomberg and Saxo)

COMMODITIES

Precious Metals: Precious metals were under pressure yesterday after hawkish talks from Fed’s Vice-Chairman Fischer. Silver was sent tumbling and broke the $19 support and Gold broke the $1340 level. With Fed Chairwoman to speak on Friday, we see support at 1310 and resistance at 1355.

Oil: Oil fell 3% after 7 consecutive days of gains. Key resistance zone at $50 once again proves to be a key resistance for oil. Iraq, the second largest producer in OPEC also intends to ramp up production by 5 percent in the next few days after an agreement to resume shipments from three oil fields in Kirkuk. Last week Baker Huges Crude Oil Rig counts also jumped above 400, its first time since February this year as well. 

FOREX NEWS

• The effect of the hawkish Fed speeches didn’t last long and USD sold off overnight against most currencies. 
• The biggest mover was NZD which rallied almost 1% helped by the USD selling and Wheeler comments saying that RBNZ is not in a rush to cut more. 
• In Emerging Markets, there was also some USD selling but to a lesser extent. This follows a series of Short USD stops in EM currencies for the past few days. The market is now waiting for Jackson Hole from Friday night

Dollar dips vs yen, kiwi lifted by RBNZ's rate view

The dollar dipped against the yen on Tuesday, while the New Zealand dollar rose after the nation's central bank chief said he did not see the need for a rapid succession of interest rate cuts.

The dollar shed 0.1 percent to 100.220 JPY= against the safe-haven yen amid a pullback in Tokyo stocks.

The greenback had risen to almost 101.00 yen overnight following hawkish-sounding comments by Federal Reserve Vice Chair Stanley Fischer before it lost steam.

The euro edged up 0.1 percent to $1.1332 EUR=, stepping off an overnight low of $1.1271.

The New Zealand dollar was a relatively big mover in an otherwise subdued Asian trading session.

The kiwi was up 0.6 percent at $0.7308 NZD=D4 after Reserve Bank of New Zealand Governor Graeme Wheeler said the current interest rate track involves further monetary easing but did not see the need for a rapid series of rate cuts.

"We remain committed to the inflation goals in the Policy Targets Agreement. We do not believe that the outlook and balance of risks warrants a position of no policy change, nor a position of rapid easings," Wheeler said in a speech which was released on the RBNZ's website on Tuesday.

The RBNZ in early August cut interest rates by 25 basis points to a record low of 2.0 percent and said further policy easing may be needed.

The kiwi nevertheless rose to a 15-month high of $0.7351 mid-month, as it has proved resilient to falling cash rates at home given they remain far higher relative to those of other developed economies.

"As for now the kiwi has digested profit taking and risen, but whether it can maintain its medium-term uptrend will depend on how the dollar fares after (Fed Chair Janet) Yellen's appearance at Jackson Hole," said Junichi Ishikawa, forex analyst at IG Securities in Tokyo.

"From a technical viewpoint, the kiwi could head into a correction phase without more supportive factors."

While views expressed by various Fed officials over the past week have impacted the dollar, a wait-and-see mood has begun to take hold ahead of possibly the most decisive speech of them all - by Fed Chair Yellen on Friday.
Read More at www.reuters.com