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Markets switched to risk-off mode overnight...>

FOREX
FOREX: Markets switched to risk-off mode overnight with high beta FX & the yuan
on the defensive on the back of U.S. President Trump's latest trade-related
tweet storm. Subsequent headlines suggesting that China may pull out of the
impending Washington based trade talks & news of a U.S. bomber task force being
deployed to act as a deterrent to Iran also weighed on risk. Weekend headlines
also revealed that North Korea conducted its latest round of missile testing.
- AUD & NZD languished at the foot of the G10 FX table. CAD also struggled on
the broader risk-off flows, with lower oil applying further pressure to the
loonie. JPY sits atop the G10 FX space, with risk-off flows driving demand. CHF
also gained vs. USD, which outperformed the remainder of G10 FX.
- USD/CNH surged, and last sits over 650 pips higher on the day, above
CNH6.8000. The cross had very little reaction to today's PBOC fix, the latest
round of targeted RRR cuts & Chinese Caixin services PMI data.
- Final EZ services PMI data, EZ retail sales and speeches from Fed's Harker,
ECB's Lautenschlager & ECB's Praet provide the highlights today. Japan & South
Korea have been out on holiday, with London also closed on Monday.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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