FOREX: A$ Falters Amid China/HK Equity Pullback, Lower Metals

Outside of modest yen gains and a further pullback in AUD, G10 FX moves have been fairly muted so far in Tuesday trade. The BBDXY USD index is little changed, last near 1238.15.

•  There was some early USD weakness, as front end US yields fell. We had comments from the Fed's Musalem that Friday's jobs report doesn't alter the Fed outlook. This coupled with some flows helped push yields lower. At this stage, the 2yr yield is down 4.5bps to 3.95%.
• USD/JPY sits back under 148.00, around 0.15% stronger in yen terms. There hasn't been much follow through to the downside though. Earlier data showed August labour earnings and household spending close to expectations. Both real wages and household spending are back in negative territory in y/y terms.
• AUD/USD has faltered to 0.6730/35, off a further 0.35%. Disappointment around lack of further stimulus details from the NDRC onshore in China (as these markets have returned) has weighed on sentiment. Metal prices are lower, iron ore and copper down by 3% and 2% respectively. Survey data showed improving consumer and business sentiment while the RBA minutes were fairly neutral relative to expectations.
• AUD/USD is back under its 50-day EMA, with the 100-day near 0.6700 the next potential downside target. AUD/JPY is back to 99.55, back sub its simple 200-day MA.
• Looking ahead, we have more central bank speak from the Fed and the ECB. On the data front, the US NFIB small business survey prints.