The broader USD rallied in Asia hours, with the BBDXY trading at the highest level since mid-August before pulling back in recent trade.

• Weakness in the yuan seems to be the major driver of the USD bid, Asia participants seemingly disappointed with the potential round of Chinese bond issuance outlined by Caixin on Monday. Traders are continuing to question whether the already outlined stimulus will turn the Chinese economy.
• Chinese & HK equities are lower as a result. USD/CNH briefly traded back above 7.13, eying the September 11 high (7.1367).
• This has also weighed on the AUD & NZD.
• Meanwhile, the NOK trades on the defensive as oil weakens following widespread reports that Israel told the U.S. that it would not target Iran’s oil and nuclear infrastructure but would focus on military sites.
• JPY outperforms all G10 peers after psychological resistance in USD/JPY (150) held yesterday, lower global yields (on Fed Governor Waller’s late Monday comments and the move lower in oil) seen as the major driver here. USD/JPY last 149.40. Initial support not seen until the Oct 8 low (147.35).
• GBP little changed on UK labour market data (greater colour on the release in earlier bullets).
• Today’s data includes final CPIs from France & Spain, the ECB bank lending survey, German ZEW readings, European industrial production, as well as the NY Fed manufacturing and inflation expectations survey.
• We are also set to hear from Fed’s Daly & Kugler during NY hours.