Equity Jitters/Lower Metals See AUD/JPY Down By Most Since Early August

A notable risk off tone has gripped G10 FX markets as the Tuesday Asia Pac has unfolded. The USD BBDXY index is up to 1237.00, around 0.15% above end Monday levels.

• The USD is up against all of the G10 currencies except the yen. USD/JPY is back to 146.45/50, around 0.30% in yen terms. Earlier highs in the pair were at 147.21.
• Regional equity losses have been evident for some markets, although losses are not beyond 0.50% at this stage. US equity futures also sit lower, led by tech (Nasdaq futures last off 0.34%).
• US yields were higher as cash Tsy trading resumed, although after being +2bps firmer, we are now back to +1bps in yield for the benchmarks. Tsys futures have drifted higher, likely finding some support from the risk off tone.
• AUD/USD is down around 0.80%, last near 0.6735/40. Outside of jittery equity markets, we have seen further downside in in iron ore, back sub $95/ton, off over 2%, Copper (CMX basis) is also down over 1% at this stage. Earlier data on Australia Q2 GDP partials showed a lower net export contribution of +0.2 (0.6 was the consensus), while public demand contributed 0.4ppt to Q2 growth. Q2 GDP prints tomorrow in Australia.
• AUD/JPY is down over 1%, last near 98.65/70. Recent highs rest close to 100.00. The pair hasn't fallen by more than 1% since Aug 5.
• NZD/USD is down around 0.65%, last back under 0.6200, with similar factors likely driving sentiment.
• Looking ahead, the BoE’s Breeden and ECB’s Buch & Jochnick appear. In the US, PMI/ISM for August and July construction spending print.