JPY under pressure as HK gov looks to.........>

FOREX: JPY under pressure as HK gov looks to de-escalate

-JPY is the poorest performing currency in G10 so far Wednesday as the Hong Kong

government appeared to take the first steps in de-escalating the tensions with

protestors by announcing the withdrawal of the controversial extradition bill

that had flared the protests in the first place. This helped support regional

equities (Hong Kong's Hang Seng Index closed higher by just shy of 4%),

pressuring US Treasuries as well as haven FX.

-The greenback is also in retreat mode, with losses most evident against the

single currency. The incoming ECB President Lagarde is currently speaking to

European Parliament and has struck modestly hawkish tones - stressing the

negative side effects of unconventional monetary policy. EUR/USD recovered above

$1.10 on her comments. GBP remains in recovery mode, with focus still on

parliament and whether the PM can secure the backing for a snap election.

-The speaker slate is stacked Wednesday, with a plethora of speeches from across

the Fed, ECB and BoE on the docket. Bank of Canada rate decision is due,

alongside US trade balance.