BRL slammed as FX auction fails....>

EMERGING MARKETS: BRL slammed as FX auction fails to touch the sides

-The Brazilian currency was knocked to an all-time low against the greenback

Tuesday (previous low was 2015) after markets balked at President Bolsonaro's

disagreements with his economy minister over the value of the currency.

Bolsonaro stated that he hopes the BRL gains while benchmark interest rates

fall, despite Guedes stating the currency's value is of no consequence. BRL

received only modest relief from the announcement of a BCB FX auction, but the

upside was quickly reversed well ahead of the close. The BRL volatility dragged

much of LatAm FX with it, undermining the MXN and COP.

-CNH traded well as Trump talked up the near-term possibility of a US-China

trade deal. Trump stated the deal negotiations were in the 'final throes',

helping pressure USD/CNH (briefly) back below the 7.01 mark and to the lowest

since Nov 18.

-Chinese industrial profits data, Mexican trade balance and the Mexican central

bank's inflation report take focus Wednesday.