G10 FX breathes sigh of relief as equity......>

FOREX: G10 FX breathes sigh of relief as equity drawdown pauses

-Markets erased the Monday drop in USD/JPY, prompting a recovery back above the

Y109.50 level as markets took a breather following a number of sharp risk-off

moves in recent sessions. Nonetheless, The recovery has been limited with

USD/JPY still well below the best levels of last week. Fading haven demand for

JPY has also rubbed off on the CHF, which sits lower also. The best performers

in G10 FX tended to be Scandi FX, with NOK and SEK gaining on the turnaround in

risk sentiment.

-EMFX put in a strong session, with ZAR, TRY and RUB all gaining sharply. The

soothed concern over the US-China trade confrontation also damped short-end

implied vols, which sat in the red across both DM and EMFX space. AUD failed to

benefit in any material way from the recovery elsewhere, with markets still

perilously close to multi-month lows following the lowest close since 2016 on

Monday.

-Attention turns to German and Eurozone GDP, US retail sales, Canadian CPI and

speeches due from Fed's Quarles & Barkin and ECB's Coeure & Praet.