USD

• 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...