A brief bout of risk off flows hit in the.....>

FOREX: A brief bout of risk off flows hit in the middle of the session, but

quickly abated as USD/JPY moved back above Y110.00 and equity indices recovered.

This was perhaps aided by the fact that the USD/CNY fix was not quite as high as

most had estimated.

- USD/JPY failed to breach Y110.23 (200-dma) and last deals at Y110.10. USD/JPY

risk reversals have taken a hit on the back of yesterday's trade war headlines,

with both the 1- and 3-Month 25 delta measures falling to levels not seen since

late March, perhaps indicating that markets had been underestimating the chances

of full scale trade war. Both measures now trade back from worst levels, but

remain notably lower. AUD/JPY found support around Y81.00 & rebounded to trade a

touch higher on the session, although it now operates off of best levels. Trade

war worry, an uninspiring dairy auction & fall in NZ Q2 consumer confidence have

weighed on NZD over the last 24 hours, although the Kiwi ignored the latest

round of BoP data ahead of tomorrow's Q1 GDP release.

- ECB's Draghi, Coeure, Villeroy, Nowotny, Knot & Lautenschlaeger, BoJ's Kuroda

& RBA's Lowe are all set to speak on Wednesday.