USD operated in mixed fashion as JPY..........>

FOREX: USD operated in mixed fashion as JPY outperformed, though it has eased

from best levels as China noted that it will open up certain sectors to foreign

investment, but reserved the right to retaliate to any US trade measures. CAD

was the early mover adding 20 or so pips to trade to highs of 1.2895 following a

report from the Washington Post which noted that US President Trump is set to

announce steel & aluminium import tariffs on Canada, Mexico & the EU on Thursday

& suggested that import taxes could take effect as soon as Friday. Resistance in

front of 1.2900 held and the cross trades back at 1.2870. Australia's capex

print was weak in terms of both the headline & breakdown, which added weight to

AUD, while NZD experienced some brief headwinds from a softer than exp. Biz

confidence survey. EUR ignored the trade escalation headlines.

- Thursday will bring the release of US PCE data, Chicago PMI, Eurozone CPI,

Canadian GDP & comments from Fed Governor Brainard, voter Bostic & non-voter

Bullard, as well as BoC's Leduc. There are notable option expiries in play in

EURUSD, USDJPY, USDCAD, AUDUSD & NZDUSD. Bank FX rebalancing models are

indicating dollar selling at month end.