EUROPE: "*GERMANY, FRANCE REACH DEAL TO PRESERVE EU CAR INDUSTRY: AFP" - bbg

• US TSY 19Y-11M BOND AUCTION: NON-COMP BIDS $85 MLN FROM $13.000 BLN TOTAL

• Gains for oil prices on Tuesday have left the USD index around 0.25% in the green, although a broadly stable session ahead of tomorrow’s Fed decision leaves the DXY shy of yesterday’s 99.75 high print. New multi-decade highs for long end US yields continue to be a supportive factor of the dollar, and the moves today have helped USDJPY rise to a fresh recovery high above 155.
• Additionally, reports that Japan is considering a new mid-term defence spending target of 3.5% of GDP may have provided an additional yen headwind. USDJPY saw a brief flurry of buying above yesterday’s high of 155.00 to trade up to a session high of 155.24. However, resistance at the August lows have contained the price action for now.
• NZD is also an underperformer, after card spending data released overnight showed figures remain soft, in line with lacklustre confidence and consistent with the RBNZ’s caution regarding future tightening. This provides an interesting backdrop ahead of NZ Q2 GDP data due Thursday local time.
• NZDUSD sits 0.33% lower on the session, continuing to test below a cluster of July lows at 0.5762, while AUDNZD made another cycle high of 1.2390 today. This once again marks the highest level since 2013, and while some cite 1.25 as a psychological target, March 2013 highs are located at 1.2683.
• UK labour market data was a little mixed, unlikely to have any impact on the MPC this week. That said, GBP has remained weaker against the USD today, briefly matching yesterday's 1.3464 low. After breaching initial 50-day EMA support, a second important support lies at 1.3469 (trendline drawn from the Jun 24 low), increasing in significance ahead of UK CPI data early Wednesday.
• US retail sales data will play second fiddle to tomorrow’s FOMC decision, where markets are leaning heavily towards a 25bp hike. BOE and BOJ decisions are then scheduled later in the week.

"*BANK OF FRANCE SURVEY INDICATES 3Q GDP TO RISE 0.1%
*BANK OF FRANCE SEES ECONOMY EXPANDING 0.4% IN 2026
*BANK OF FRANCE TRIMS 2026 GDP FORECAST, SEES PICKUP NEXT YEAR" - bbg

From its monthly survey, with the August survey having estimated a 0.2% rise in GDP in Q3.