USD/CNH has shed 37 pips and last........>

CHINA YUAN: USD/CNH has shed 37 pips and last deals at CNH7.0641, with an

earlier downtick seemingly provoked by a round of broader risk-on flows, seen as

e-minis have firmed up. 

- The weekend saw some further escalation in China's tensions with the U.S., UK

or Canada. The White House is considering new measures against Chinese

officials, which could be announced within days. Downing 10 is readying plans to

phase out Huawei equipment from the UK's 5G network. Finally, Canada suspended

its extradition treaty with Hong Kong and moved to ban military equipment sales

to the city.

- The U.S. sent two aircraft carriers to the South China Sea for exercises after

protesting an intensification in China's drills in the contested waters.

- Bears look for a dip through Jul 1 low of CNH7.0585 before targeting Jun 24

low/200-DMA at CNH7.0455/36. Bulls need a rally above Jun 26 high of CNH7.0898

before taking aim at Jun 15 high at CNH7.0974.

- China's inflation data, due Thursday, is the main point of note on this week's

economic calendar in the country.