Improving mood music surrounding U.S.-China...>

FOREX: Improving mood music surrounding U.S.-China trade matters breathed life

into risk appetite. White House's Kudlow suggested that the U.S. & China are

very close to striking their phase-one deal, with negotiators being in touch on

a daily basis. Earlier it was disclosed that top trade reps from Washington &

Beijing will hold a phone call later today, trying to resolve remaining sticking

points. Positive overtones from Kudlow's speech outweighed his remarks that U.S.

Pres Trump has not committed to anything and the deal is "not done yet."

- Safe haven currencies were sold, while commodity FX gained. Comments from the

Antipodean central bankers Orr, Hawkesby and Debelle were largely ignored.

- The yuan firmed up on the back of news from the trade war front. Meanwhile,

the PBoC injected CNY200bn yuan via its MLF, following yesterday's poor data.

USD/yuan dropped but failed to penetrate the psychological 7.0 level.

- On the data front, focus turns to EZ CPI & trade balance, as well as U.S.

industrial output, advance retail sales & Empire M'fing. When it comes to

speakers, ECB's Mersch, Fernandez-Bollo and Jochnick, as well as BoC's Lane are

set to appear. The Fed will publish its Financial Stability Report.