USD traded with a soft tone in early..........>

FOREX: USD traded with a soft tone in early Europe, alongside JPY, as market

moved into a risk-on tone, possibly prompted by US-EU trade talks and optimism

over US-Canada trade talks. EUR/USD edged up to $1.1644, while cable extended

its recent recovery to $1.3087. This early move reversed at 0700GMT with EUR/USD

dropping to an eventual low of $1.1566 into early NY. Cable dipped to $1.3054,

bounced to $1.3082 in reaction to strong UK Earnings data before it also dropped

back, finding support at $1.2990. Recovery to $1.3045 before it resumed slippage

to $1.2965 in early NY. Brexit comments concerning the plausibility of 6-8 weeks

for an initial Brexit deal allowed cable to bounce to $1.3041, eased again to

$1.2974 before it edged back above $1.3000 into the NY afternoon. EUR/GBP

continued to meet some buoyancy provided by the base of its 10-dma 1.0%

envelope. 

- USD/JPY continued its slow climb through NY, edged on to Y111.64 with Asian

traders earlier linking part of the move to JPY negative M&A deals.

- Spain CPI, Italy IP, EZ Jobs Report and IP provide Wednesday morning focus. US

PPI and Fed Bullard in NY.