FX Overnight Markets:

Appetite for riskier assets carried over into the Asia-Pac session, after U.S. President Trump's comments suggesting progress in trade talks with China helped the S&P 500 print a new record high yesterday. A slight miss in Japanese Tokyo CPI was shrugged, amid an otherwise light docket. The Antipodeans were bid,with NZD leading gains in the G10 basket as NZ returned from its long weekend.  

NZD was bought after Stuff reported that NZ Superannuation Fund might drop the policy of hedging almost all of its foreign investments in NZD. That said, a BBG piece suggesting that NZ Tsy sees a risk of S&P removing positive outlook from the country's AA rating sapped some of the NZD strength, albeit to a degree.

A downtick in crude prices weighed on NOK. GBP faced some marginal pressure ahead of today's repetition of PM Johnson's push for a snap election.  

Asian FX were broadly higher vs. the greenback, owing to positive risk sentiment. KRW led gains in the space; USD/KRW dropped to a (nearly) four-month low &flirted with its 200-DMA as a result.

Today's economic docket includes French & U.S. consumer confidence gauges, as well as appearances from RBA Gov Lowe and ECB Vice Pres de Cos.

FX Related Economic Data:

Tuesday's main data events are the release of the French consumer confidence index at 0745GMT, the BOE's money and credit report at 0930GMT and the US consumer sentiment indicator at 1400GMT.

FX Relative Performance:

Interesting Stories of Today:

Boris Johnson Won’t Give Up on Trying to Force a U.K. Election (Bloomberg)

The U.K. leader remains doggedly determined to secure a third general election in a tumultuous four years. On Tuesday, he will try again to persuade reluctant Members of Parliament -- this time using an easier legal route.

Bond Sell-Off Extends; Stock Futures Trade Flat: Markets Wrap (Bloomberg)

A global bond sell-off extended Tuesday, while U.S. and European stock futures traded little changed as investors await earnings releases and the Federal Reserve’s expected interest-rate cut.

The S&P 500 finally pierced its July high after President Donald Trump added fresh optimism on the U.S.-China trade front, saying the two are ahead of schedule on forging phase one of a trade deal.

China Corners Bond Bulls as $35 Billion in Funds Reach Maturity (Bloomberg)

The People’s Bank of China skipped open-market operations again Tuesday, effectively draining 250 billion yuan ($35 billion) in liquidity from the financial system as funds . It said fiscal spending at the end of the month will offset maturities, according to a statement. Another 290 billion yuan is maturing in the next three days.

Asian stocks hover around three-month high on trade optimism (FT)

Shares across Asia were trading around their highest level in three months on Tuesday, after Wall Street hit a new all-time high overnight on the back of optimism over US-China trade and the prospect of further interest rate cuts.

Macron’s labour market changes begin to bear fruit (FT)

The French economy is proving more resistant to the global economic slowdown than more trade-dependent nations such as Germany, and economists surveyed by Reuters expect Wednesday’s figures for third-quarter gross domestic product to show a 0.2 per cent expansion.

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