FX Overnight Markets:

With liquidity thinned by a market holiday in Japan, the China-U.S. trade talks drew the bulk of attention after U.S. Pres Trump & Commerce Sec Ross struck optimistic notes on the topic over the weekend. The Antipodeans were bought,with NZD leading gains in G10 FX space. AUD admittedly posted a leg lower on the back of a miss in local retail sales data, but broader picture themes allowed for a swift recovery. NZD/USD met resistance at its 100-DMA.  

The yuan garnered strength post PBoC fix; the USD/CNY mid-point was in line with expectations but stronger than on Friday. USD/CNH dipped through the CNH 7.0315-0296 support zone and staged a foray under the 100-DMA.

Improving sentiment aided KRW; a dip in USD/KRW filled the gap from Jul 2.

The ZAR was bid as S. Africa escaped a ratings downgrade at Moody's on Friday

FX Related Economic news:

Monday morning starts with the publications of the final manufacturing PMIs for Spain(0815GMT), Italy (0845GMT),France (0850GMT), Germany(0855GMT) and the Eurozone (0900GMT). The main data event to look out for in the U.S. is the release of factory orders at 1500GMT.

FX Relative Volatility:

Interesting Stories for Today:

Stocks Rise With Treasury Yields on Trade Optimism: Markets Wrap (Bloomberg)

Stocks advanced worldwide along with U.S. equity futures while bonds slipped on optimism China and America are moving closer to an interim trade deal.

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MPs Elect New Speaker as Farage Slams Johnson’s Deal: Election Update (Bloomberg)

With election campaigning in full swing, Nigel Farage dug in over his pledge to stand Brexit Party candidates nationwide, potentially taking votes from Prime Minister Boris Johnson’s Conservatives. Cabinet minister Jacob Rees-Mogg said Farage’s position “risks us losing Brexit altogether.”

Members of Parliament elect a new speaker of the House of Commons, an appointment that could influence the direction of Brexit. John Bercow, who stepped down last week, set new precedents to allow opponents of the deals negotiated by both Johnson and his predecessor, Theresa May, to scrutinize and amend those plans.

Ross Meets With Chinese Premier Li as Progress Seen on Trade (Bloomberg)

U.S. Commerce Secretary Wilbur Ross met with Chinese Premier Li Keqiang Monday afternoon at a regional summit in Bangkok, a person familiar with the discussion said.

The meeting came hours after Ross told a morning business forum that the U.S. was “very far along” with “Phase One” of a trade deal with China. President Donald Trump on Sunday told reporters at the White House that a trade agreement, if one is completed, would be somewhere in the U.S.

Euro-Area Manufacturing Stays in Slump as Job Losses Accelerate (Bloomberg)

Euro-zone manufacturing remained near the weakest in seven years last month, a poor start to the final quarter that raises pressure on the region’s governments to add fiscal stimulus.

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