Yen Resumes Losses, Commodity-Tied FX Outperform

Yen sales resumed after the currency took a breather yesterday. The Nikkei 225 advanced, while upticks in all three main U.S. e-mini futures inspired hope for a continued pick-up in risk appetite. BoJ's Noguchi pointed to a continued need for an aggressive fiscal and monetary stimulus, in another reminder of the Bank's divergence with its major peers. His comments came after FOMC minutes suggested that tapering is in sight.

• The redback went offered after a weaker than expected PBOC fix. China's central bank set their central USD/CNY mid-point at CNY6.4414, 44 pips above sell-side estimate (the largest weak bias since May 10).
• China's factory-gate inflation accelerated to the fastest pace in almost 26 years, overshooting consensus estimate. The report came after U.S. CPI topped expectations, reinforcing broader inflation concerns.
• AUD showed a limited reaction to domestic labour market report, which showed a smaller than expected uptick in the unemployment rate coupled with an above-forecast dip in participation. Employment shrank more than projected, exclusively on the back of losses in part-time jobs.
• Broader commodity-tied FX space was generally firmer, with NZD leading gains. RBNZ Dep Gov Bascand noted that New Zealand's economy recovered strongly from 2020 but the Delta outbreak weighs on outlook. NZD/USD re-tested its monthly highs, while NZD/JPY rose to its best levels since early Jun.
• U.S. weekly jobless claims & PPI take focus on the data front going forward. The global central bank speaker slate is tightly packed with Fed, ECB & BoE members.