RBNZ under pressure to cut Rate as exports struggle

Good morning,

- RBNZ under pressure to cut Rate as exports struggle…

- RBA's Stevens: Impact of stocks volatility on China may be small. $AUD adjustment occurring, having expansionary effect. What's more, Stevens said ''Impact of stocks volatility on China may be small. $AUD adjustment ocurring, having expansionary effect.'' Furthermore, he added that ''Jobs data shows spare capacity no longer increasing,'' alongside with ''We have monetary policy balance about right at moment.''

- AUDUSD declined more than 0.6% alongside front-end government bond yields after Australia's 2Q CPI came in below expectations.

- Asian equities update: Nikkei 225 20601.11 (-1.16%), Hang Seng 25242.80 (-1.14%), CSI 300 4138.65 (-0.66%) - 5.38 AM GMT

-$EUR was the best performing major vs $USD on Tuesday with +1.02% spot returns while $GBP was the worst performing with -0.04% returns.

- Tsipras Returns to Parliament in Struggle to Qualify for Bailout..Prime Minister Alexis Tsipras will return to the Greek parliament on Wednesday seeking support from the opposition to help him overcome his own party’s rebellion against the terms of a third bailout. Greek lawmakers are voting on a second package of measures the country’s creditors demanded as a condition for starting discussions on an aid program worth up to 86 billion euros ($93 billion). Tsipras was forced to reshuffle his government last week after lawmakers from his party led by former Finance Minister Yanis Varoufakis opposed the first set of reforms. However, senior officials say that “There is a risk of the number of rebels growing''.....

- Commodity selloff: What it means for Fed rate hike? A broad selloff in commodities and dollar strength point to disinflationary pressures on the horizon that weaken the argument for a near-term rise in U.S. interest rates, according to some analysts. This week has seen gold prices tumble to five-year lows and U.S. oil prices dip below $50 a barrel for the first time since April, with prices stabilizing a little on Tuesday. "Given that weak commodity prices are likely to prompt a ripple out disinflationary effect it is hard to see how the Fed (U.S. Federal Reserve) would even consider hiking rates against such a weak backdrop...

- BoE's Carney repeats decision to hike rates will come into sharper relief at the turn of the year

- $NZD is expected to be the most active major vs $USD with 1W implied volatility at 16.33. This may be due to an #RBNZ rate decision today.

- A $4 Trillion Force From China That Helped the Euro Now Hurts It...End of an era in FX? For almost a decade, China’s effort to diversify the world’s biggest foreign-exchange reserves supported the euro. Now, the almost $4 trillion force may be working against the single currency. China’s central bank depleted $299 billion of reserves in the year through June to keep the yuan from falling, offsetting the private sector’s sales of the currency for dollars amid a stock-market rout and faltering economy. The decline in reserves is the longest in People’s Bank of China data going back to 1993. It may mark the end of an era of accumulation that led the bank to buy euros as part of reducing reliance on the US$dollar.That may lead it to replenish holdings of the U.S. currency and dump some euros, according to Credit Suisse Group AG. After the dollar, the euro is the most widely used reserve currency for central banks, International Monetary Fund data show..

- EUR/JPY catalysts for the bull correction..EUR/JPY was a strong bid overnight on the back of the dollar's weakness after a number of sessions of being overbought when the trigger come from the decline in Treasury yields and ten-year rates falling more than four basis points, poor data and full on profit taking emerging....

- News for today: RBNZ rate decision, US House Sales, US House Prices, French business sentiment

Have a nice Day !