Risk-off flows dominated the early part of the session after the U.S. labelled China a currency manipulator. However, the PBoC fixing USD/CNY sub-7.00 and announcing the issuance of offshore CNH bills in Hong Kong stemmed some of the worry, as global core Financial Institutions did unwind the early bid as we moved through the Asia-Pacific session

The mixture of underlying risk dynamic & local events drove FX markets. A stellar New Zealand jobs report inspired a decent round of NZD buying, countering the impact of ANZ lowering their RBNZ easing call. That said, resulting NZD strength faded somewhat, with a brief down leg in NZD/USD seen as the RBNZ 2-yr inflation exp.was lower than in Q2. Steady AUD/NZD purchases were noted post-NZ jobs.

Safe haven FX went, as it were,from riches to rags; JPY was the worst G10 performer. Elsewhere, EUR gained some traction initially,amid reports of unwinding positions that used the single currency in carry trades.

Today's Economic Data:

In Europe,the publication of German industrial orders at 0700 BST and Swedish private sector production at 0830 BST are the major data events scheduled on Tuesday. In the US the release of the Job Openings and Labour Turnover Survey at 1500 BST is worth mentioning.

NZD/USD H4

USD/JPY H4

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