Initial defensive feel gradually ebbed........>

FOREX: Initial defensive feel gradually ebbed away, prompting G10 FX to unwind

initial risk-off moves. Price action was range-bound, given the subdued

overnight headline flow. Improvement in sentiment generated pressure on safe

havens and helped the Antipodeans shake off earlier weakness. AUD looked past a

BBG headline from the AFR, noting that Bain Capital has committed up to A$1.25bn

to relaunch Virgin Australia. Sterling was bid after PM Johnson pledged to

increase fiscal spending and explicitly rejected economic austerity.

- A marginally stronger than exp. PBoC fix helped improve risk appetite and

bumped the yuan higher, as China returned after a long weekend. A rebound in

China's industrial profits may have lent further support to the redback. KRW

faced some pressure, as FinMin Hong ruled out a fourth extra budget this year,

but recouped losses. PHP firmed up after BSP Gov Diokno said that the peso will

remain stable over the policy horizon owing to sizeable foreign reserves.

- Focus turns to preliminary German CPI data, final EZ consumer confidence, U.S.

pending home sales & Canadian building permits, as well as comments from BoE's

Bailey & Vlieghe, ECB's Makhlouf and Fed's Daly & Williams.