Smooth sailing at G7 sees risk stage..........>

FOREX: Smooth sailing at G7 sees risk stage impressive bounce

-After a resolutely negative Asia-Pac session, AUD/USD challenged the YTD lows

of 0.6677 before staging an impressive 1.5% rally from the lows to trade in

close proximity of $0.68 handle. The smooth conclusion to the G7 Summit in

France helped ease tensions across global asset markets, particularly as the US

President talked up the willingness of both the US and Chinese negotiating teams

to make a deal and (possibly) avoid the next ratchet higher in tariffs. The

rally in AUD was also evident in CAD and NZD, with commodity-tied FX comfortably

the best performers in G10.

-Strong volumes and the risk recovery pressured the JPY, helping prop USD/JPY

back above Y106, although Friday's highs of Y106.73 are still intact. Any

recovery back above here would open Y106.98 and the 50-dma at Y107.42. The

market proved indifferent to markets Monday, with US durable goods orders and

German IFO failing to move the needle.

-German GDP, French business and consumer confidence data. RBA's Debelle, BoE's

Tenreyro and ECB's de Guindos are all due to speak.