Positive signals on China's COVID-19 outbreak underpinned a turnaround in risk appetite, reflected in G10 FX price action. Shanghai met the threshold of three consecutive days with no new infections in the community, which allows local authorities to start easing the most severe virus countermeasures.

• Risk-on flows intensified as Hong Kong confirmed it will press ahead with its planned relaxation of COVID-19 curbs, while wires reported that Hangzhou loosened requirements for second homes purchases.
• Offshore yuan caught a bid on China positives. It may have drawn additional support from the reintroduction of appreciation bias into the yuan fixing and the announcement that the PBOC will issue CNH10bn 3-Month & CNH15bn 1-Year Bills.
• The Aussie dollar paced gains in G10 FX space, tailed by its Antipodean cousin NZD. Minutes from the RBA's most recent monetary policy meeting revealed that the Board discussed three scenarios, including a 40bp hike to the cash rate target.
• Recovery in risk appetite sapped all initial strength from the yen, but USD/JPY failed to test yesterday's high.
• The global data docket features U.S. retail sales & industrial output, flash EZ GDP & UK jobs report. There is plenty of central bank speak on tap, including from Fed & ECB chiefs.