Sell-off moderates ahead of key G7 call -.....>

FOREX: Sell-off moderates ahead of key G7 call

- After a particular brutal week, the Monday started off on a more positive

note, with Asia-Pacific and European equities stemming some of the recent

downside thanks to some explicit messaging from the Fed (on Friday), the Bank of

Japan over the weekend and the Bank of England early Monday. Focus now intently

switches to a scheduled call with G7 finance ministers and central bankers in

"early US" hours Tuesday at which they will discuss a response to the virus.

Short-end vols are suitably bid, with the USD/JPY 1w implied contract hitting

the best levels since early 2017.

- The EUR's sharp recovery continues apace, with EUR/USD now making a beeline

for the Dec31 high at $1.1239 just weeks after recording one of the longest

losing streaks on record. Carry trade unwind is still the theory, but MNI source

reports that the EU could suspend the debt brakes to allow nations to cope with

Coronavirus also boosted.

- RBA rate decision, Eurozone CPI estimate and a few Fed/ECB members are due,

but all focus rests on the outcome of the G7 call.