The United States (US) Federal Reserve (Fed) will release the Minutes of the July Federal Open Market Committee (FOMC) meeting on Wednesday.

Commerzbank’s Charlie Lay, Dr. Henry Hao and Moses Lim note that China’s July data showed weaker Industrial Production and Retail Sales, underscoring fading momentum at the start of Q3.

UOB economist Enrico Tanuwidjaja notes that Bank Indonesia (BI) kept the BI Rate at 5.75% in August, prioritizing Rupiah and macro-financial stability over growth.

The United States (US) Department of the Treasury (US Treasury) announced on Wednesday that it will double the size of some of its buyback operations aimed at supporting liquidity in the longer-dated Treasury securities market.

Societe Generale’s Sam Cartwright argues that a new UK Prime Minister has not altered the constrained fiscal backdrop, limiting ambitions on housebuilding, social care, investment and defence.

HSBC strategists review July data and the latest China Politburo guidance. Retail sales and Fixed Asset Investment softened, while Industrial Production and exports were supported by AI-related and green technology demand.

National Bank of Canada’s (NBC) Angelo Katsoras argues that Canada’s push to diversify exports away from the United States (US) toward the European Union (EU) faces growing obstacles as EU industrial policy turns more protectionist.

Commerzbank’s Antje Praefcke says markets will scrutinize the latest Fed minutes for clues on how close policymakers remain to another rate hike after weaker US labour and inflation data reduced expectations for a hike by year-end.

Societe Generale analysts Galvin Chia and Kunal Kundu note that Bank Indonesia kept the BI rate at 5.75%, with deposit and lending facility rates unchanged, reinforcing Rupiah stability and inflation control.

ING’s Chris Turner, citing UK economist James Smith, notes that July United Kingdom (UK) Consumer Price Index (CPI) had limited impact on EUR/GBP, with benign food inflation and only a modest uptick in the Bank of England’s core services measure to 3.8%.

Deutsche Bank’s Chief United Kingdom (UK) Economist Sanjay Raja notes that UK inflation data for July broadly matched expectations, with headline Consumer Price Index (CPI) rising and core CPI steady.

Standard Chartered strategists have revised its Bank of Japan (BoJ) rate outlook, bringing forward its expected 25bps hike from October to September and raising its terminal rate forecast to 1.75% from 1.50% previously.

West Texas Intermediate (WTI) oil price moves sideways after three days of gains, trading around $84.50 per barrel during the European hours on Wednesday.

Danske Research Team notes that EUR/USD has extended its rebound towards 1.1600 as European yields remain elevated while US Treasury yields stabilize after the recent spike.

Deutsche Bank strategists note that global equities endured another difficult session as rising yields and higher Oil reinforced a stagflationary backdrop. US indices, led by chip stocks and the NASDAQ, extended declines, while the STOXX Europe 600 posted its fifth consecutive drop.

Here is what you need to know on Wednesday, August 19:

USD/IDR depreciates after registering modest gains in the previous day, trading around 17,870 during the European hours on Wednesday. The pair holds losses as the Indonesian Rupiah (IDR) remains stronger following the release of the interest rate decision by the Bank Indonesia (BI).

European Central Bank (ECB) official and Finnish Central Bank Governor Olli Rehn said during the European trading session on Wednesday that it is essential to keep inflation expectations anchored.

OCBC’s Sim Moh Siong and Christopher Wong note that Indonesian Rupiah (IDR) weakness is driven by higher Oil prices and elevated global yields, even as domestic sentiment improves after President Prabowo’s speeches and the BI governor nomination.

Danske Research Team reports a marked drop in global equities, with the S&P 500 and Stoxx 600 down 0.7% on Tuesday. After a period of value-versus-growth rotation, flows shifted toward defensive sectors such as consumer staples and health care, funded by cyclicals.

MUFG’s Lloyd Chan notes that the Korean Won (KRW) and Taiwan Dollar (TWD) are leading Asia FX gains as softer US yields and a resilient technology cycle support sentiment.

UOB strategists highlight Bank Indonesia’s (BI) policy meeting, with consensus expecting no change but its macro team forecasting a 25 bps hike to 6.00%. They see risks around the Indian Rupee (IDR), divided views on Federal Reserve (Fed) policy and rising global inflation.

United Kingdom Retail Price Index (MoM) climbed from previous 0.3% to 0.6% in July

United Kingdom Producer Price Index - Output (MoM) n.s.a meets forecasts (0.2%) in July

United Kingdom PPI Core Output (YoY) n.s.a climbed from previous 2.6% to 2.8% in July

United Kingdom Retail Price Index (YoY) meets forecasts (3.2%) in July

AUD/USD extends its losses for the second successive day, trading around 0.7080 during the Asian hours on Wednesday. Addressing the broader economic backdrop, Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser emphasized on Wednesday that inflation remains unacceptably high.

Following overnight negotiations with Canadian Prime Minister Mark Carney, US President Donald Trump announced on Wednesday, “I have paused 50% tariffs against Canada for a three-day period.”

Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser said during the Asian trading session on Wednesday that inflation is too high and the central bank needs to raise interest rates to bring price pressures down.

West Texas Intermediate (WTI) oil price extends its gains for the fourth consecutive day, trading around $84.80 per barrel during the Asian hours on Wednesday.