GLOBAL POLITICAL RISK: Trump Again Threatens Iranian Energy Strikes

The USD index is holding a little lower for the session, last near 1195. Higher beta plays are outperforming, led by AUD. The move down in the USD/CNY fixing and the strong CNY onshore open is also spilling over to AUD. AUD/USD was last near 0.7115, with recent highs at 0.7137 an upside focus point. USD/CNH is back under 6.8800, likewise for onshore USD/CNY spot. Highs in USD?CNH yesterday were at 6.9133 

• Oil prices holding higher, but still under Monday highs. Brent crude last just under $79/bbl. Equity sentiment less positive, but US cash markets outperformed in Monday trade. Eminis were last off around 0.40%.
• Some offset for the AUD also coming from higher precious metals (gold +1% to be near $5400), while remarks earlier from RBA Governor Bullock (every RBA meeting live etc) also likely helping the A$ at the margins.

The effects of the provision of liquidity over Lunar New Year is starting to decline with Repo rates declining moderately.

• The PBOC issued CNY34.3bn of 7-day reverse repo at 1.4% during this morning's operations.
• Today's maturities CNY 526bn of 7-day reverse repo
• Net liquidity withdrawal CNY491.7bn.
• The PBOC monitors and maintains liquidity in the interbank system through the issuance of reverse repo.
• The CFETS Pledged Repo Deposit Institutions 7 Day Weighted is at 1.43%, from prior close of 1.46%.
• The China overnight interbank repo rate is at 1.25%, from the prior close of 1.29%.
• The China 7-day interbank repo rate is at 1.44%, from the prior close of 1.45%.

• CHINA PBOC CONDUCTS CNY34.3 BLN VIA 7-DAY REVERSE REPO TUES