China Pledges Economic Support

After a constructive session for risk assets and commodity currencies the start of the Asia-Pac session has seen major pairs observe narrow ranges. Headline flow has been light while the economic docket has a distinct lack of major releases.

• Both AUD and NZD trade a handful of pips higher, holding near the top of Monday's range. The local COVID dynamic remains in focus, Victoria reported a lower case count than yesterday while New Zealand FinMin Robertson said that New Zealand was in a strong fiscal position to weather the lockdown. Elsewhere New Zealand retail sales excluding inflation rose 3.3% in Q2, above the 2.5% expected.
• USD/JPY is broadly unchanged on the session, with yesterday's low still intact. Expect broader themes and macro headlines to continue to dominate, with the local COVID & political situation in Japan having little impact thus far.
• Offshore yuan has weakened slightly with USD/CNH creeping slightly higher, reversing some of Monday's decline. Markets digest comments from PBOC Governor Yang late on Monday, he said the Central Bank would increase credit support to the economy and SME's in particular. There were a few pieces doing the rounds from China dailies, including one from Minister of Commerce Wang that China could consider a smaller negative list to attract foreign capital.
• Looking ahead German GDP data is due later in the session while broader focus for the week remains on the Fed's annual Jackson Hole Economic Symposium, with commentary from FOMC Chair Powell on Friday headlining that (now virtual) event.