Caution Creeps In, Jackson Hole Takes Focus

Caution prevailed in a relatively subdued Asia-Pac session, with participants awaiting fallout from the Fed's annual gathering. Softer crude oil prices applied some pressure to commodity-tied FX.

• Local Covid-19 outbreaks generated headwinds for the Antipodeans as the situation in Sydney deteriorated and NSW declared its first four-digit daily case count, while New Zealand's Director-General of Health said that lowering alert level outside of Auckland below 3 at Friday review was unlikely.
• Safe haven currencies were in demand, with JPY leading gains. The Nikkei reported that we should expect record budget requests across Japanese ministries & agencies for FY22/23.
• ECB Monetary Policy Meeting Accounts and the secondary print of U.S. GDP data are on the docket today, alongside U.S. jobless claims & core PCE as wel as comments from ECB's Rehn, Villeroy & Schnabel.
• That being said, the Jackson Hole symposium, which kicks off today, will be key for the direction of risk sentiment during the remainder of this week.