Despite stronger leads from European shares and industrial commodities Asia Pacific markets may trade cautiously today. After US markets closed on Saturday morning China cancelled planned trade talks with the US. New tariffs from both countries will kick in today. These developments could see local traders less enthusiastic than their European and US counterparts.

Currency markets are generally calm. A 4%+ surge in copper prices on Friday and further gains for crude oil is lending support to commodity currencies such as the Australian and New Zealand dollars. The US Federal Reserve is expected to lift interest rates by 0.25% on Wednesday, while the Reserve Bank of New Zealand will likely stand pat on Thursday, with both actions already priced by forex traders.

Later in the week the macro data focus shifts to European inflation and China manufacturing. US durable goods orders for August could receive greater scrutiny for indications of trade sanction impacts. The mid-autumn Moon Festival holiday in China today may mean lower trading volumes amid at a likely careful opening.

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