ASIA FX: Positive Bias, With TWD & THB Outperforming, INR Weakens Beyond 88.30

Gold prices are down 0.25% to $3372.2/oz during today’s APAC session, pressured by stronger risk appetite, after rising 2.8% over the first three trading days of August. They reached a high of $3385.40 early in the session and then trended lower to $3373.24 pressured by slightly higher US long-end yields. The USD index is down 0.1% though.

• Gold faced resistance today at its high of $3385.40, 4 August high, but has remained above support at $3268.2, 30 July low. The rally since the disappointing US payrolls print signals that previous weakness was corrective.
• Equities are generally higher with the S&P e-mini up 0.2%, Nikkei +0.5% and Hang Seng +0.2% but KOSPI down 0.3%. Oil prices are higher with WTI +0.6% to $65.58/bbl. Copper is up 0.2%.
• Later the Fed’s Cook, Collins and Daly speak. Euro area June retail sales, June German factory orders and French Q2 employment print. 

JGB futures are weaker and at session lows, -26 compared to settlement levels.

• (MNI) Japan's inflation-adjusted real wage, a key gauge of household purchasing power, remained in negative territory for a sixth consecutive month in June but narrowed to -1.3% from May's 2.6% decline, preliminary data from the Ministry of Health, Labour and Welfare showed Wednesday.
• (Bloomberg) - The Japanese currency's recent strength can be expected to wane somewhat after wages data came in substantially weaker than had been expected. That's likely to be seen as reinforcing the BOJ's instinctive policy caution, pushing traders to pare back already modest bets on a rate hike this year.
• The cash JGB curve has twist-flattened, with benchmark yields 2bps higher to 1bp lower. The benchmark 10-year yield is 2.1bps higher at 1.493% versus the cycle high of 1.616%.
• Swaps are cheaper, with rates 1-2bps higher.
• Tomorrow, the local calendar will see Weekly International Investment Flow, Tokyo Office Vacancies and Leading/Coincident Index data alongside 30-year supply.

ACGBs (YM -3.0 & XM -3.5) are weaker and at session cheaps on a data-light session.

• Cash US tsys are flat to 2bps cheaper, with a steepening bias, in today's Asia-Pac session after yesterday's twist-flattener. Today's US calendar will see MBA Mortgage Applications.
• Cash ACGBs are 3bps cheaper with the AU-US 10-year yield differential at +3bps.
• The bills strip is weaker, with pricing -2 to -5.
• RBA-dated OIS pricing is modestly firmer across meetings today. A 25bp rate cut in August is given a 98% probability, with a cumulative 62bps of easing priced by year-end (based on an effective cash rate of 3.84%).
• Tomorrow, the local calendar will see Trade Balance data.
• The AOFM plans to sell A$1000mn of the 3.00% 21 November 2033 bond on Friday.