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• Divergence. A ‘dovish’ ECB hike & solid US data weighed on the EUR. Reports the BoJ could tweak its policy settings today also boosted the JPY.• AUD weaker. The USD rebound pushed down the AUD. Locally, retail sales are due today. The US PCE deflator & employment cost index are released.• BoJ in focus. Higher inflation means the BoJ’s ultra-loose stance is untenable. A change would be step along the normalisation path & could jolt markets. Markets were jolted overnight by the combination of a ‘dovish’ ECB rate hike, strong US data, and reports the Bank of Japan could...

• Fed hike. Another rate rise from the US Fed. But it remains data dependent when it comes to future moves. USD a bit softer, tracking a slight dip in US yields.• AUD weaker. AUD underperforms after Q2 CPI undershot predictions. In response markets have reduced RBA rate hike expectations.• AUD events. ECB meeting, US GDP & jobless claims tonight. Australian retail sales & BoJ announcement tomorrow. RBA next week. The US Fed decision and Chair Powell’s press conference were in focus overnight. As widely expected, the US Fed hiked interest rates by another 25bps, taking the target range up...

• Firmer USD. The USD has continued to claw back ground. The AUD has remained on the backfoot and is now ~2.4% below its mid-July high.• Busy week. Locally, Q2 CPI (Weds) & retail sales (Fri) are due. Offshore, the US Fed (Thurs), ECB (Thurs) & BoJ (Fri) meet.• More AUD pressure? On net, we think the upcoming events/data could give the USD some more support, with AUD headwinds still in place. Markets had a quiet end to last week. But things could heat up this week with a string of major data points and central bank meetings on the...