- After yesterday's release of the Reserve Bank of Australia's August minutes noted that it was unlikely that further rate cuts will be needed, the RBA's McKibbin noted today that he was optimistic about the global economic outlook, while warning about the risks of global inflation.

- In terms of economic data, New Zealand's Q2 producer price data was mixed [New Zealand Q2 PPI Inputs q/q: 0.0% v -1.0%e (-2.5% prior); Outputs: -0.7% v -0.5%e (-1.4% prior)]. Australia's Westpac leading index in June rose by 0.7% against the prior decline of 0.4%.

- In forex, the USD is broadly firmer against the European major currencies and has moved off of its worst levels against the commodity currencies. The Japanese yen is gaining across the board on the declines in the Nikkei 225 and Shanghai Composite. The weakest currency against the USD and yen on the session has been the pound, ahead of the Bank of England's upcoming minutes.

- Asian equities are trading mixed, as markets continue to look to the Shanghai Composite for direction. At the time of writing the Shanghai Composite is lower by more than 1%, as the index has swung between gains and losses. Ahead of today's Chinese equity open, there were various press articles possibly aimed at lessening concerns regarding a Chinese equity correction and future monetary tightening. Most notably, an editorial in the People's Daily said Chinese A-shares will continue to trend higher on an eventual economic recovery and supportive monetary policy. The Nikkei 225 is lower as gains in shares of consumer goods and health care companies, were offset by declines in shares of financials. An article released in Nikkei ahead of the Tokyo equity open, noted that Japan's financial regulator might encourage domestic financial institutions to raise more capital in order to protect against future losses. Australia's S&P ASX 200 is higher by more than 0.30%, led by gains in shares of oil/gas companies. Among the gainers in Australia, shares of Qantas Airways and Woodside Petroleum are both higher following their respective earnings reports. In South Korea, the Kospi is higher by more than 0.50%, led by technology shares. In Taiwan, the Taiex is higher by more than 0.10% on gains in shares of consumer services and health care companies. Hong Kong's Hang Seng is little changed as gains in shares of consumer services firms were offset by losses in shares of basic materials and consumer goods companies. However, overall the Hang Seng continues to track the direction of Chinese equities.

- Crude oil prices opened the session sharply higher as API reported that weekly crude inventories unexpectedly declined (API PETROLEUM INVENTORIES: CRUDE: -6.13M V +1.2ME; GASOLINE: -847K V -1.7M). In hurricane news, Bill was upgraded to a Category 3 storm with maximum sustained winds of 125 mph. As of the most recent National Hurricane Center update, Bill was traveling west-northwest at 15 mph and the center of the storm was located 555 miles east of the Leeward Islands, in the Caribbean. Spot Gold is higher by more than 0.05%, but well off of the session best levels as the dollar has rebounded against the Euro. (Note all quotes are as of 1:34 EST)