Mild Risk Off To Start Session

Some mild risk off seen at the start of the Asia-Pac session on Thursday. Fed's Kapan spoke earlier, the noted hawk and 2023 has revised his full year '21 GDP outlook a touch lower, although noted that he doesn't expect a prolonged slowing of the economy, pointing to near-term headwinds. He also said that he wouldn't be surprised if Sep jobs growth slows.

• JPY is touch firmer, local news reports have suggested that the government is planning to extend the state of emergency in play across 19 prefectures including Tokyo and Osaka, with the areas impacted expected to have restrictions in place through the end of September
• AUD under pressure after Victoria recorded a jump in coronavirus cases to 324. In New Zealand Q2 manufacturing sales rose 3.9% Q/Q while volumes fell 0.1%.
• Offshore yuan is slightly weaker, markets look ahead to Chinese inflation data later in the session.
• Looking ahead market focus turns to Thursday's ECB decision where easing financial conditions since the July GC meeting, coupled with an improvement in economic conditions and an acceleration in inflation, suggest that the ECB is likely to announce a reduction in the PEPP purchase rate this week.