Risk-off flows accelerated after Australian...>

FOREX: Risk-off flows accelerated after Australian unemployment rate remained

unchanged, even as consensus forecast called for a downtick. Worth noting,

however, that the print was underpinned by a solid employment change figure,

countered by an increase in the participation rate. This played out against the

backdrop of cautious mood inspired by yesterday's combative rhetoric from U.S.

President Trump. The Aussie dived to the bottom of the G10 pile as a result.

- AUD weakness gradually spilled over into the broader high-beta FX space. NOK

had already underperformed weighed on by yesterday's slump in oil prices, while

CAD erased its earlier marginal gains.

- Risk aversion put a bid into safe haven FX, lifting JPY to the top of the G10

currency board. A softer Nikkei 225 lent additional support to the yen.

- CNH was stable after a stronger than exp. fixing from the PBoC. China Daily

wrote that "stronger counter-cyclical measures are exp. in the coming weeks;"

PBoC Dep Gov Pan said that the Bank wants to balance flexibility & stability.

- Focus today turns to German CPI and EZ industrial output. Also noteworthy is

the first round of Tory leadership votes.