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US-China headlines nip risk in the bud........>

FOREX
FOREX: US-China headlines nip risk in the bud
-Asia-Pac and European sessions were largely free of incident, with most majors
trading well within last week's range (despite German Chancellor Merkel
announcing she won't run for the CDU leadership, and therefore the
Chancellorship, at the next election and the UK budget). This allowed markets to
consolidate for much of the day, although any notion of a risk recovery in
equities, yen crosses or AUD was quelled on Bloomberg reports that the US is
planning for another wave of sanctions on Chinese imports should the upcoming
Trump-Xi talks breakdown with no agreement. This dragged USD/JPY from session
highs north of Y112.50 and prompted AUD to sit at the bottom of the G10 table.
-There was far more action in emerging markets, with BRL rallying well over 1%
against most others on right-wing Bolsonaro's election victory and MXN dropping
sharply as the Mexican President scrapped the construction of a new airport,
hinting at a hostile investor environment in the future.
-Tuesday highlights include German regional CPIs and a number of ECB speakers
and RBA's Bullock.

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