Central Banks Soften Tone

• Fed Governor Waller struck a notably softer tone, pointing to signs that inflation pressure is easing and indicating he would be comfortable holding the funds rate steady should the data signal cooling, with next week’s August inflation print set to weigh heavily on the decision.
• US yields fell on the comments as markets pared expectations of further tightening, with data also pointing to a labour market on stable footing. Non Farm Payrolls are due tonight.
• Australian yields fell after RBA Chief Economist Hunter indicated earlier rate increases are beginning to weigh on activity. Pricing for a hike at the end of the month was pared slightly, though a move is still around 65% priced, with a full hike priced by November.
• The July goods trade balance surprised to the upside, with the surplus narrowing $0.4bn to $1.9bn.