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Another constructive session for risk assets and commodity currencies in the Asia-Pac session Tuesday, oil and equity markets built on Monday's gains. Major pairs observed narrow ranges amid a lack of catalysts; headline flow has been light while the economic docket had a distinct lack of major releases.

  • Both AUD and NZD trade a handful of pips higher heading into Europe, AUD/USD breaking out of yesterday's range. The local COVID dynamic remains in focus, Both NSW and Victoria reported a lower case count than the previous day 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 marginally higher on the session, the local COVID and political situation in Japan had little impact through the session.
  • Offshore yuan has weakened slightly with USD/CNH creeping slightly higher, reversing some of Monday's decline. Markets digested 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.