China once again dictated price action.......>

DOLLAR: China once again dictated price action overnight which saw yesterday's

currency losses fully reversed. The broader risk-on theme was supported by

reiteration from policy makers that the government will cut taxes on a larger

scale, support the autos sector and raise infrastructure spending. JPY

underperformed and is currently showing losses of 0.46% against the dollar, last

Y108.64. The DXY recovered off early Asia lows to hold near the peak of its

95.46-60 range at the European crossover. Bears continue to search for a break

of the 95 level & 200-dma at 94.94, while bulls need to clear the Jan8 high &

100-dma at 96.02 to break the recent range. Gold hovers around the $1290 level

with topside focus remaining on the Jan 4 high at $1298.60, ahead of the key

$1300 level. US PPI & Empire Mfg the main highlights today at 1330GMT, ahead of

tonight's Brexit Meaningful vote. Final demand us Producer prices rose by 0.1%

m/m in November and excluding food and energy was up by 0.3% m/m. The MNI median

suggest final demand producer prices declined by 0.1% in December and the

excluding food and energy, rose by 0.2%.