After a few weeks of heavy data, the Forex markets had a quiet session with the pick of the news coming out of China. Consumer price index (CPI) MOM came in slightly higher than expected, with the YOY expectations meeting market expectations. This comes with a boost in the Asian equity markets as Chinese inflation added to signs of stabilization in the world’s second largest economy. Asia shares are at a 1 year high.

The Kiwi found some support vs USD ahead of the RBNZ rate decision, which was after the bounce off yesterday’s 2 week low. The announcement is anticipated on Wednesday 21:00 GMT time, with expectations of a 25bps cut and potentially more to come in the next year.

GBP fell slightly on further comments of easing after last week’s rate cut as the MPC face struggles assessing amount of stimulus required and its impact.

Aussie dollar was also under pressure after NAB said its business confidence fell further in July and projected a lower baseline lending rate cut of up to 50 bps. A cut of this magnitude would take the lending rate to a record low 1%.

Technically, USD/JPY is still looking weak, with a potential move back towards the support at 100.85. If that doesn’t hold, we think market would favor a move below the 100 mark.

With that said, there is not much to look forward to on the FX calendar today, and we may see continued range bound sessions throughout London and New York trading hours.