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Cautiously Awaiting Powell's Speech

FOREX

Modest risk-off flows emerged in early Asia-Pac trade as regional participants reacted to headline flow surrounding deadly attacks by the Afghan affiliate of ISIS outside Kabul airport and U.S. Pres Biden's pledge to retaliate. This initial impetus moderated thereafter, as the Asia-Pac session failed to provide much in the way of notable catalysts ahead of a much awaited speech from Fed Chair Powell.

  • NZD underperformed at the margin with the local outbreak of Covid-19 under scrutiny. PM Ardern extended the national level 4 lockdown through the month-end and said that Auckland will likely remain in level 4 for another two weeks. The alert level for the rest of the country may be lowered to 3 from next Wednesday.
  • The yen led gains in G10 FX space, looking through marginally mixed Tokyo CPI data. Japanese FinMin Aso said that there is no urgent need to put together another extra budget.
  • The virtual Jackson Hole symposium takes centre stage today, with the address from Fed Chair Powell set to provide most interest.
  • Also due today are U.S. personal income/spending & final University of Michigan Sentiment as well as Swedish GDP & retail sales.

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