The Yuan has served to undermine all of the gains in the AUD generated by yesterday’s good employment report.

Could slowing inflation cause the Bank of England to rethink the prospect of an August rate rise?

The NAB Cashless Retail Sales Index gained 0.5% in June on a month-on-month basis, following gain of 0.6% in May (revised from 0.8%).

The move higher in front end yields boosted the USD, although the greenback was already on the ascendency early in the overnight sessions.

The global economy remains in reasonable shape right now despite some pressures on Emerging Market economies.

The NAB Residential Property Index fell sharply in the June quarter 2018, down 17 points to +6 to sit at its lowest level since mid-2016 and well below its long-term average (+14).

Forecasts broadly unchanged but new risks to watch.

The business conditions index ticked up by 1pt to +15 index points in June, after easing in the previous month. The business confidence edged down 1pts to +6 index points, to be around its long-run average level.

The NAB Rural Commodities Index gained 1.4% month on month in June, following a 3.1% gain in May. On a year on year basis, the index was down 2.9% in June. The monthly gain reflects strong lamb, wool and cotton prices.

Risk to world growth from trade tensions escalating.

NAB’s USD non-rural commodity price index declined by over 3% q/q in Q2 2018. This only partially reversed the large gain made in the previous quarter and, as a result, it is still 7.5% higher than a year ago. The fall in Q2 mainly reflected a decline in iron ore and metallurgical coal prices, although LNG export prices – linked to the price of oil – rose.

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