AUSTRALIA: " Australia's fiscal year-to-date underlying cash deficit was [...]

Spot USD/CNH tracks near 6.7225 in early Wednesday dealings, after the pair rose modestly for Tuesday's session. USD support was evident in terms of higher oil prices/UST yields, as US-Iran traded tit for tat strikes in the Middle East. The CNH loss of 0.06% outperformed the +0.20% rise for the BBDXY index. More broadly, USD/CNH is stuck in its flat range trade dating back to mid August. The recent rally above 6.7300, ran out of steam near the 20-day EMA, which comes in at 6.7330 today. Spot USD/CNY finished up yesterday at 6.7208, while the CNY CFETS basket tracker was flat at 101.83, up from recent lows (101.37) as the USD index has stabilized (aided by the above supports, oil/UST yield gains etc). 

• Headlines crossed a short while ago from US Tsy Secretary Bessent, who stated at the G20 press conference: "Bessent says 19 finance ministers agreed 'never-ending stream of cheap exports' is unsustainable, but China dissented." (via AP). Via BBG: "Bessent urged some of his G20 counterparts to take a page from the Trump administration's playbook of using tariffs and other measures to crack down on trade imbalances."
• This will keep US-China relations in focus ahead of the President Xi's planned trip to the US later this month.  Market expectations for a meaningful break through in terms of reduced trade tensions/tariffs etc are likely to be fairly low at this stage.
• The USD/CNY fix still looks supportive of lower USD/CNH levels (albeit in a continued low vol backdrop) but the August rising in the fixing was a modest 0.10% (after a 0.32% gain in July).
• The local data calendar is empty until tomorrow's RatingDog services PMI (the market forecast is a 50.6 outcome after 50.4 printed for July). Earlier this week the official PMIs for August were mixed, with non-manufacturing (services) staying unchanged at 49.0). The manufacturing side has been firmer (yesterday's RatingDog outcome up to 51.5 (versus 51.0 forecast). 

"*UEDA: DATA HAVE BEEN IN LINE WITH WHAT WAS IN OUTLOOK REPORT

*UEDA: TO HAVE THOROUGH DEBATE AT EVERY MEETING INCLUDING NEXT" - BBG

"BOJ GOV UEDA: OUR BASIC STANCE ON MONETARY POLICY IS LARGELY UNCHANGED FROM JULY - [RTRS]"

"BOJ GOV UEDA: NO COMMENT ON DAY-TO-DAY MOVES, ON MARKETS PRICING IN STRONG CHANCE OF SEPTEMBER RATE HIKE - [RTRS]"

Q2 GDP is released today and Bloomberg consensus expects it to rise 0.3% q/q, in line with Q1, but annual growth to slow to 1.8% from 2.5%. Growth is likely to be driven by private consumption with public spending and net exports making small contributions. Investment will probably weigh on growth after making a strong contribution in Q1. The RBA forecast GDP to rise 1.9% y/y in its August staff projections and welcomes slower growth given inflation is still above target. Despite headlines focused on the GDP print, the data will also include productivity and unit labour costs, important information for the inflation outlook and the RBA. 

• Forecasts are heavily centred around 0.3% q/q and 1.8% y/y but range from 0 to +0.6% & 1.5% to 2.0%. Westpac and NAB are around consensus.
• ANZ though is looking for a stronger print of 0.5% q/q & 2.0% y/y while CBA is below consensus at 0.1% & 1.6%.
• Q1 productivity growth was weak falling 0.6% q/q to be up 0.3% y/y but GDP per hours worked was at the same level as Q1 2023. This is a growing area of concern for the RBA as it means that the growth rate before inflation rises is lower. Average compensation rose 0.6% q/q & 4.3% y/y in Q1 down from 5.5% in Q3 2025 which has helped bring ULC growth down to 3.2% y/y.
• In terms of the partials already released, real household spending rose 0.7% q/q after 0.8% and public demand contributed 0.1pp, concentrated in expenditure, after a flat Q1.
• Construction fell 2.1% q/q but Q1 was revised up to +4.3% from 3.4%. Capex declined 3.6% q/q after an upwardly-revised 6.9%. Net exports contributed 0.1pp after detracting 0.7pp in Q1. Data centre investment is driving large swings in GFCF and tech imports.