WILL CHINA KEEP THE YUAN BELOW 7.00?

The USD/CNY fix from the PBoC, which came in below the CNY 7.00 mark, supported global core fixed income during the Asian session.

The RBNZ cut the OCR by 50bps, defying consensus forecast that expected a 25bps cut. The MPC noted that the cut expresses their commitment to sustaining employment growth & pushing inflation towards the midpoint of the target range. RBNZ Gov Orr added pressure to NZD during the press conference, as he refused to rule out further easing and mentioned reviewing various policy options, including non-conventional tools. He added that today's rate cut doesn't eliminate the chance of employing negative rates in future. NZD/USD crashed through several technical levels, printing the lowest figures since Jan 2016. Worth noting the NZ OCR is now on par with Aussie cash rate at 1.0%.

JPY tops the G10 group. Before appreciating post-RBNZ, it had already posted gains on a softer Nikkei 225 & light risk-off flows.

Economic Data:

After German industrial orders on Tuesday, the next important release is German industrial production on Wednesday morning (0700BST),which is followed by the publication of data on foreign trade for France at 0745BST. The release of figures on consumer credit for the US at 1800BST is the highlight in the US.

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US Bond yields