AUSSIE-YEN: Morgan Stanley recommend selling Sell....>

AUSSIE-YEN: Morgan Stanley recommend selling Sell AUD/JPY at market with a

target of Y79.00 and stop of Y83.30

- MS note that "the RBA is expected to sound relatively dovish in its statement

this week, given that the most important data point since the last meeting - CPI

- came in below its expectations. The continued escalation in trade rhetoric

between the US and China, falling Chinese equity prices and falling industrial

metal prices also do not bode well for AUD in particular. Meanwhile, the BoJ

aiming for a steeper JGB curve to increase bank profitability and stimulate the

money multiplier should work in favour of JPY, as a steeper JGB curve should

increase the incentive for Japanese investors to engage in JPY short end-funded

carry trades relative to USD short end-funded carry trades or investing in

FX-hedged US Treasuries, reducing JPY outflows. Risk markets also continue to

look vulnerable, suggesting prospects for JPY repatriation flows, strengthening

JPY. The main risk to this trade is continued outperformance of US risk

markets."