Risk rebounds as Chinese authorities step.....>

FOREX: Risk rebounds as Chinese authorities step up to stem the rout

- Equities in China rebounded Tuesday after a dire re-opening of trade

yesterday, which has helped underpin a firmer appetite for risk assets so far

today. Mainland European stocks are higher by over 1% and this is reflected in

the lower JPY and CHF price. USD/JPY has rebounded above the Y109 handle before

finding resistance at the Monday high of Y109.14.

- AUD is one of the best performers on the unchanged RBA rate decision. Markets

were split on a cut, but bulls found confidence in the central bank's lack of

negative revisions to their GDP outlook. AUD bulls were helped by a bit of a

short squeeze, but need to close above $0.67 to cement any recovery.

- GBP initially extended Monday's weakness, but saw a minor bounce on

better-than-expected construction PMI numbers, which prompted markets to further

price out the the likelihood of rate cuts from the BoE this year. GBP/USD sits

back above $1.30 at typing.

- US December factory orders are the sole calendar release Tuesday, with no

schedule central bank speeches.