Mnuchin's Clash With Fed Sends Mild Risk-Off Impulse

Early Asia-Pac trade saw a mild risk-off impulse, after U.S. Treasury clashed with the Fed over the latter's emergency lending scheme. While Tsy Sec Mnuchin requested the return of $455bn of unused stimulus funds, the central bank responded that it "would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role asa backstop for our still-strained and vulnerable economy". The already light risk aversion has further moderated since and G10 crosses hold tight ranges as we type. CHF & USD trade on a firmer footing, while AUD & NOK struggle to recoup losses. JPY has faltered; worth reminding that it is a Gotobi Day today.

• Today's highlights include China's LPR fixing, UK & Canadian retail sales, EZ consumer confidence, as well as comments from Fed's Kaplan, Barkin & George and ECB's Lagarde, de Guindos & Weidmann.