RBNZ: committee considers raising the Official Cash Rate to 2.75% an appropriate step to return inf sustainably to the 2% midpoint.

U.S. ISM employment index (August) 51.2; expected 53.0; prior 52.8.

Investors are repricing French political risk ahead of an October budget and next spring's presidential election. France's fiscal weakness is long-standing: it has breached EU deficit rules more than 20 times and its debt-to-GDP ratio has stayed above the EU limit since 2003. Ten-year OAT yields are near levels seen in the 2009–12 euro sovereign crisis, but the market move of note is the spread: the 10y OAT-Bund gap is about 87 bps, roughly 40 bps wider than the post-Draghi (2012) average and versus a c.189 bps peak around 2011. ECB backstops — OMT and the Transmission Protection Instrument (TPI) — exist but remain unused; deploying them for a core member such as France would be politically contentious, making France an awkward test case if spreads continue to widen. A key vulnerability is the investor base: foreign holders account for over 60% of French debt versus ~33% in Italy, and ABN AMRO estimates about 35% of French bond holders are price-sensitive, meaning modest reductions in marginal buyer demand could push yields higher without large-scale selling.