Buoyant equities lift commodity-linked FX.....>

FOREX: Buoyant equities lift commodity-linked FX at the expense of the USD

-Both the USD and JPY performed poorly on Monday as markets retraced the

stronger greenback from the tail-end of last week. Despite pushing back on

expectations of a near-term NAFTA deal, a conciliatory tone from new WH adviser

Larry Kudlow has quashed fears of an immediate trade crackdown between the US

and China. Nonetheless, speeches from the PBoC governor will be eyed early

Wednesday for any comments on reports that China could devalue the CNY should

trade tariffs damage exports.

-Commodities performed well from the off, with energy and metals posting gains

and helping support the CAD, AUD, NOK and NZD. USD/CAD briefly broke below the

C$1.27 mark and now sits between the 50- and 100-dmas.

-GBP and EUR trade mixed with little newsflow on either side to nudge the

needle. Data picks up later in the week with UK production and French/German CPI

all due.

-US PPI figures are expected to slow in tomorrow's report ahead of the FOMC

minutes Wednesday.