• RBA’s Hunter flags deliberate cooling in housing and broader growth
• China exports match forecast in August, imports fall short as domestic demand stays soft
• Kospi surges past 7,130 on chips, Nikkei ekes out modest gain
• China August trade balance shows imports below expectations
• China’s Rio Tinto ore purchasing halt appears set to take effect. AUD down.
• Vitol CEO sees China oil demand picking up, flags unsustainable gap
• ASX, AUD, NZD softer as NAB business conditions hit six-year low
• PBOC sets USD/ CNY central rate at 6.7804 (vs. estimate at 6.7104)
• Goldman Sachs turns more constructive on Indian equities: valuations, rupee resilience + more
• Japan GDP revision cements BOJ hike bets, yen and Nikkei in focus
• ICYMI: Goldman flags $120 oil risk, lifts Brent and WTI forecasts
• Japan wage growth strongest since 1997, cementing BOJ hike case
• South Korea Q2 GDP, final, +0.6% (vs. expected +0.6%, prior +1.8%)
• BRC data shows summer retail boost fading fast as GBP watches consumer signals
• MUFG sees ECB hike this week, flags downside risk for euro
• Oil jumps at reopen on Saudi strikes, Iran threat to Gulf energy assets
• UBS still likes gold despite hawkish Fed pivot
• UBS: two Fed hikes incoming, but equity bull case still intact
• Goldman Sachs says gold bull run not over, flags $4,000 as buy zone into FOMC
• investingLive Americas FX news wrap 7 Sept: USD falls as the yen surges on BOJ rate-hike expectations

Summary:

• Oil traded in a lacklustre fashion, with the only fresh Middle East headline a Houthi missile and drone attack on Khamis Mushait and Abha airport in Saudi Arabia
• USD/JPY dipped under 153.00 at one stage, taking the yen to a six-month high against the dollar on GPIF asset-allocation speculation and rising BOJ hike bets, reinforced by today’s upwardly revised Q2 GDP and strong July wage data
• The stronger yen weighed on the Nikkei, which eked out just a 0.07% gain in morning trade, while Korea’s Kospi rallied nearly 2%
• AUD and NZD both softened, AUD on a weak NAB business survey and reports that China’s CMRG has moved to halt Rio Tinto negotiations, NZD on RBNZ’s Gai suggesting the key rate may already be in neutral territory
• China’s August trade data showed exports matching forecast and accelerating from July, while imports undershot at 28.2% against a 30% forecast, a softer signal on the domestic demand recovery

— Oil traded in a lacklustre fashion on Tuesday, with the only fresh development out of the Middle East a Houthi missile and drone attack on Khamis Mushait and Abha airport in Saudi Arabia, not enough to shift the broader price picture. 

Gold steadied on no news flow.

The bigger market mover was the yen, which extended its recent gains to hit a six-month high against the dollar, with USD/JPY dipping below 153.00 at one stage. Analysts pointed to a more positive sentiment shift toward the currency on speculation about a potential change in the Government Pension Investment Fund’s asset allocation, alongside rising expectations for faster Bank of Japan rate hikes. That hike speculation found further support in the day’s data, with July wage figures and an upward revision to second-quarter GDP both reinforcing the case for the BOJ to tighten policy at its meeting next week.

The stronger currency came at a cost for Japanese equities, with the Nikkei managing only a minuscule 0.07% gain in morning trade as yen strength offset dip-buying elsewhere in the market. South Korea’s Kospi fared considerably better, rising nearly 2% in morning trade on broad-based buying.

The Australian and New Zealand dollars were both sent modestly lower. The AUD softened after NAB’s business survey showed conditions turning negative as profitability fell sharply, with business confidence also declining in response. The bigger driver for the currency, though, was news that China’s CMRG has directed some steel mills to halt negotiations with Rio Tinto, a move first reported by Reuters back on August 6 that now appears to be taking effect with the arrival of September, escalating Beijing’s leverage in the annual iron ore talks. For the kiwi, RBNZ Monetary Policy Committee member Prasanna Gai added a modest headwind, saying it’s plausible the central bank’s key rate is already sitting in neutral territory.

China’s August trade data rounded out the session. Exports hit forecast exactly while accelerating from July, confirming the export-led growth pattern that has defined China’s year so far, with high-tech goods, cars and semiconductors doing the heavy lifting. The more interesting number was the import miss, growth of 28.2% against a 30% forecast, suggesting the pickup in domestic demand markets had been hoping for isn’t quite materialising at the pace expected, even though it still marks a clear acceleration from July.

This article was written by Eamonn Sheridan at investinglive.com.