Participants turned cautious as the focus.....>

FOREX: Participants turned cautious as the focus shifted from the impending

Sino-U.S. phase-one trade deal to its aftermath. The press highlighted simmering

bilateral tensions over Huawei/tech. U.S. Tsy Sec Mnuchin told reporters that

Washington might consider the reduction of tariffs on China, but only after

phase-two talks wrap up with a deal. His comments followed reports re: existing

tariffs being poised to stay in place until after U.S. presidential elex.

- USD/yuan continued a rebound from multi-month lows touched yesterday. USD/CNH

showed above CNH6.9000 before pulling back a tad, still threatens the level.

- G10 crosses were range-bound. Modest risk aversion lent some support to the

yen, keeping USD/JPY below the Y110.00 mark. A trader speaking with BBG cited

the unwinding of AUD/NZD shorts & AUD/JPY sales linked to U.S.-China matters.

- Asian EMFX were limited by the aforementioned trade war concerns.

- Coming up today we have UK inflation data, EZ industrial output, French &

Swedish CPIs, as well as U.S. PPI & Empire m'fing. Central bank speaker list

features ECB's Holzmann and Villeroy, BoE's Saunders and Fed's Harker, Daly and

Kaplan. Also of note is the awaited signing of U.S.-China trade accord.