DXY holds close to Monday's 94.913 base (lowest since late August). USD/JPY down to 119.73, EUR/JPY to 135.20 after BOJ. GBP strengthens as UK inflation in line with forecasts. GBP/USD inched up to 1.5456. EUR/GBP down to 0.7313 from 0.7329 levels. EUR/USD steady in 1.1284/1.1329 range. BOJ Kuroda- Weak yen isn't always guaranteed to push up consumer prices. BOJ Kuroda- Don't think prices would stop rising if FX rate stall at 120. BOJ Kuroda- I Will not hesitate to adjust policy if price trend deviates/threatens price target. Riksbank Jansson- Worrying that crown has strengthened in recent weeks. SSEC closed down 3.5% at 3,005.17 points. Nikkei closed up 0.34 percent at 18,026.48. UK August CPI 0.2% m/m, 0.0% y/y vs previous -0.2%/0.1%. 0.2%/0.0% expected. UK August PPI core output 0.0% m/m, 0.1% y/y vs previous 0.0%/0.2% revised. 0.0%/0.2% expected. Germany September ZEW Economic sentiment 12.1 vs previous 25.0. 18.5 expected. Euro zone Q2 Employment 0.3% q/q, 0.8% y/y vs previous 0.2% revised/0.8%. Euro zone July Euro stat trade NSA 31.4bln vs previous 26.4bln. Economic Data Ahead (0830 ET/1230 GMT) US August retail sales/ex-autos, +0.3%, +0.2% m/m eyed; last +0.6%, +0.4%. (0830 ET/1230 GMT) US September NY Fed Empire State manufacturing index, -0.75 eyed; last -14.92. (0915 ET/1315 GMT) US August industrial output, -0.2% m/m eyed; last +0.6%. (0915 ET/1315 GMT) US August capacity utilization, 77.8% eyed; last 78.0%. (1000 ET/1400 GMT) US July business inventories, +0.1% m/m eyed; last +0.8%. (1100 ET/1500 GMT) Peru's annual GDP data. (1700 ET/2100 GMT) Chile's central bank meets to set the interest rate, widely expected to be held at 3.0 pct. Key Events Ahead (1145 ET/1545 GMT) Fed Trade operation 30-year Ginnie Mae (max $975 mn). (1200 ET/1600 GMT) Buba Dombret speech in Mainz. (1930 ET/2330 GMT) RBA Asst Gov DeBelle speech at Sydney seminar. FX Recap The Germany ZEW survey for September tracking German economic sentiment dropped sharply from 25.0 to 12.1, while the current situation gauge ticked higher to 67.5 from 65.7 previously. The EURUSD remained indifferent as it rarely reacts to these surveys and trading around $1.1309. Meanwhile, inflation in France in August sharply improved to 0.3% month-on-month, from -0.4% previously, but the yearly change came out weaker at 0.0% and decreased from 0.2% in July. Looking towards the New York session, a flurry of US macro data including the critical retail sales and industrial production data will dominate ahead of Thursday's Fed decision. Pair made intraday high at 1.1328 and low at 1.1284 levels. Initial support is seen around at 1.1015 and resistance at 1.1363 levels. Option expiries are at 1.1100-25 (1.5BLN), 1.1425-30 (800M). After the Bank of Japan left rates unchanged at its monetary policy meeting earlier on Tuesday, the Yen extended overnight gains and strengthened below the ¥120 handle. Currently pair is trading at 119.55 levels. It made intraday high at 120.65 and low at 119.40 levels. However, the bank downgraded its opinion of exports and production, which could be setting the scene for further easing. Low global oil prices partly explain why inflation in Japan is so weak, but even when excluding fuel prices, the CPI only rose 0.6% year-on-year in July, some way off the BOJ's 2% target. BOJ also admitted that exports and production had softened, saying that both were being affected by the slowdown in emerging economies. This change in tone could be the bank paving the way for further easing. Initial resistance is seen at 123.20 and support is seen at 118.42 levels. Option expiries are at 119.70 (910M), 120.05 (200M), 120.65 (330M). Sterling rose against the dollar and euro after the data showed UK inflation fell back to zero in August, it hit an intraday high of $1.5456 after the data, up from $1.5433 before the data, and leaving it up 0.2 pct on the day. Against the euro, it strengthened to 73.125 pence, up a third of a pct on the day, having traded at 73.29 pence before the inflation numbers. It made an intraday high at 1.5457 and low at 1.5401 levels. Moreover, markets remain wary ahead of Thursday's Fed decision, on increased speculations that the Fed rate hike could be pushed back to early 2016, thus reducing the demand for the US currency. While the US calendar remains absolutely busy today, with the traders' now shifting focus towards today's economic releases from the US. Initial support is seen at 1.5185 and resistance is seen around 1.5507 levels. The New Zealand dollar was the biggest loser among the G20 basket of currencies during the Asian session on Tuesday. The kiwi hovered near its intraday lows, falling 0.27% to $0.6299 ahead of the European open. New Zealand's dollar erases previous losses in European session and trading around 0.6336 levels. Investors are expected to remain cautious ahead of the Federal Open Market Committee's crucial decision on Thursday. It made an intraday high at 0.6342 and low at 0.6299 levels. Initial support is seen at 0.6195 and resistance at 0.6511 levels. The RBA minutes turned out slightly dovish and failed to lift the sentiment on the Aussie. The primary note from the minutes is that the central bank suggests that a lower AUD is favoured for the economy. The RBA minutes also showed how close the policymakers monitor what is happening in China. Pair is currently trading at 0.7128 levels. It made intraday high at 0.7165 and low at 0.7102 levels. Initial support is seen at 0.6908 and resistance at 0.7182 levels. Option expiries are at 0.7000 (3BLN), 0.7100 (363M), 0.7125-40 (800M), 0.7200 (583M). Equities Recap Europe's main markets traded higher in early deals, with investors avoiding firmer bets ahead of the U.S. Fed's meeting. FTSEurofirst 300 rose 0.2 pct to 1,396.07 points in early trading, Britain's FTSE 100 inched higher 0.1 pct, Germany's DAX and France's CAC40 climbed 0.3 pct. Tokyo's Nikkei Average ended up 0.34 pct at 18,026.48, MSCI's broadest index of Asia-Pacific shares outside Japan erased early gains to fall 0.7 pct. China's CSI300 Index closed down 3.9 pct at 3,152.23 points, while Shanghai Composite Index finished down 3.5 pct at 3,005.17 points. Commodities Recap Oil inched higher towards $47 a barrel on Tuesday, supported by the prospect of lower U.S. inventories and production although concern about weaker Asian demand kept prices in check. Brent crude was up 26 cents at $46.63 a barrel, after declining in the previous two sessions. U.S. crude was trading 38 cents higher at $44.38 at 0849 GMT. Gold steadied near a one-month low on Tuesday as investors kept to the sidelines, waiting for the Fed's outlook on interest rates. Spot gold was little changed near $1,108.20 an ounce by 0633 GMT, just above a one-month low of $1,098.35 reached last week. U.S. gold was trading at $1,107.60. Treasuries Recap U.S. 10-year Treasuries Yield stood at 2.179 pct vs U.S. close of 2.180 pct on Monday. Euro zone bond yields were steady on Tuesday amid increased caution before the Federal Reserve meeting seen as having a one-in-four chance of delivering the first rate hike in a decade. 10-year German Bund yields costs, were up less than a bp at 0.66 pct. Spanish and Italian yields were flat at 2.13 pct and 1.85 pct, respectively. 10-year Greek bond yields were 9 bps lower at 8.75 pct. JGB prices ended the day lower, with the 5s/40s curve flattening by 2bp from yesterday's afternoon close. JGBs in the 5-yr to 10-yr zone extended their earlier losses, after the BoJ announced at 03:07GMT (12:07JST) that its policy board decided by an 8-1 majority vote to maintain its current monetary policy without taking further easing steps. Yields on the current 5-yr JGBs rose from their intraday low of 0.07% (+0.5bp) to 0.085% (+2bp), while those on the current 10-yr JGBs also went up from 0.36% (+0.5bp) to 0.38% (+2bp) on hedge-selling by dealers ahead of tomorrow's monthly JPY1.2tn 20-yr JGB auction, according to JGB traders. UK Dec Gilts traded off to 117.98 after being unchanged on the day ahead of the CPI data at 118.17, and given the potential significance of the data Gilts have surprisingly only traded a 117.95-118.20 range. Ahead of the inflation data the 2s/10s curve had done very little and is similarly unchanged after the data at 123bp. New Zealand government bonds were a touch softer. Australian government bond futures retreated, with the 3-year bond contract off 4 ticks at 98.070. The 10-year contract was down 1.5 tick to 97.2600, leading to a bearish flattening of the curve.

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