Havens remain offered, but risk appetite......>

FOREX: Havens remain offered, but risk appetite showing no signs of returning

-While JPY and CHF were the poorest performers Tuesday and US equities posted a

decent bounce, both assets are far from staging the kind of reversal you'd like

to see in any return of risk appetite. While USD/JPY posted prints just north of

Y107, the spot rate failed to make any dent in the sharp losses seen at the

tail-end of last week, with bulls needing to recovery the Y108.10 50-dma to

rebalance the outlook.

-Similarly, while short-end implied vols eased for most currencies Tuesday, they

remain at elevated levels. This has kept the vol term structure inverted for a

number of pairs, most notably EMFX, as short-end vols continue to command a

premium.

-Newsflow and datapoints were few and far between, although Trump re-affirmed

his support for US farmers in the event of a further downturn in export markets.

-The RBNZ rate decision takes focus Wednesday, with the bank seen trimming rates

by 25bps. German industrial production is also due as well as a speech from

Fed's Evans.