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Sour trade report undermines.......>

EMERGING MARKETS
EMERGING MARKETS: Sour trade report undermines recent CNY confidence
-Risk sentiment reversed later in the Monday session as CNBC's Eunice Yoon
poured further cold water on the recent optimism of a near-term 'phase one'
trade deal between the United States and China. The report saw the mood in
Beijing as 'pessimistic' about a trade deal, adding that China are troubled
after Trump spoke against tariff rollbacks. CNH and CNY weakened in response,
USD/CNY rallied to touch 7.0282, while USD/CNH touched 7.0319. Small scale
USD/CNY call option buying was evident after the report, but hedging markets
remained somewhat quieter than recent sessions - reflected in the lack of
response from CNY implied vols.
-LatAm FX saw some minor relief Monday, with CLP, ARS and CRC outperforming. CLP
led the way, extending its recent recovery as markets continue to buy into hopes
that Chilean lawmakers will cement the drafting of a new constitution in an
attempt to quell recent protests.
-The Hungarian rate decision (expected unchanged at 0.90%) and Russian PPI data
are the highlights of an otherwise quiet session.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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