Kiwi Lags Behind With G10 FX Holding Tight Ranges

Major currency pairs treaded water with the market in a waiting mode ahead of a marathon of central bank meetings this week. The greenback slipped in early trade as U.S. e-minis crept higher in the wake of a positive Wall Street session, but clawed back losses as equity index futures trimmed gains.

• The kiwi underperformed for the second consecutive day, as NZ 2-Year swaps extended their move away from three-month highs, despite the absence of notable local catalysts. Spot NZD/USD shed a handful of pips, falling short of testing cycle lows printed Monday at $0.5930.
• AUD/NZD breached the NZ$1.1300 mark on its way to NZ$1.1328, the highest point since Mar 2016. The move in the spot rate was out of sync with a moderation in AU/NZ 2-Year swap spread, with the differential paring yesterday's advance.
• The yen ignored above-forecast Japanese inflation data released earlier. Core CPI accelerated to +2.8% Y/Y in Aug from +2.4% prior, exceeding the median estimate of +2.7%.
• USD/CNH held above CNH7.0 as the PBOC kept its Loan Prime Rates unchanged. The People's Bank also set a stronger-than-expected yuan reference rate for the 19th straight day.
• U.S. housing starts/building permits, Canadian CPI, comments from ECB's Lagarde & Muller, as well as Riksbank's monetary policy review take focus from here.