Trade-weighted JPY hits best level in three...>

FOREX: Trade-weighted JPY hits best level in three years

-Fallout from the rising tension between the US and China worked further in

favour of haven FX Monday, as CHF and JPY comfortably topped the charts. This

tipped a trade-weighted JPY contract to the highest levels since November 2016

and the sessions following the election of Donald Trump.

-Similar price action was seen in CHF, evident in EUR/CHF bottoming out at

1.0863, the lowest levels since mid-2017 which should make the SNB very

uncomfortable. Further evidence that the SNB have already begun intervening to

slow the CHF's rise arose in sight deposits data, which showed reserves edging

to new highs of Chf 582.7bln.

-US equity markets picked up where Europe left off, falling sharply on increased

global trade tensions, with all major indices trading lower by as much as 2.5%.

This wasn't helped by a lower-than-expected non-manufacturing ISM number,

echoing weakness seen in recent Chicago PMI and manufacturing ISM releases.

-The RBA rate decision, German factory orders and a speech from Fed's Bullard

are the calendar highlights Tuesday.