The list of concerns for market citizens remains largely unchanged.

News that China and the U.S. will hold low-level talks on trade later this month served to shore up sentiment a bit last week, but it’s worth noting that U.S. tariffs on $16 billion in Chinese goods (the second tranche of the first round of 301-related duties) take effect on Thursday and public hearings on a proposed second round targeting an additional $200 billion in imports from China are scheduled this week as well. Here’s BNP:

On the trade front, Chinese officials arrive in Washington Wednesday for renewed talks aimed at averting the next USD 200bn of tariffs due to be implemented next month. While the delegation is not viewed as sufficiently senior to reach a full deal this week, we would not rule out non-specific but encouraging headlines, similar to what emerged from President Trump’s meeting with Jean Claude Juncker last month, which could hit USD long positions.

For now, the yuan has stabilized thanks to a three-pronged effort involving thereinstatement of forwards rules (August 3), the chiding of onshore banks for selling RMB (August 7) and a move to squeeze offshore liquidity (August 16). Here’s an updated version of our annotated CNY chart:
 

The yuan has also been buoyed by lower-than-expected USDCNY fixings. Taken together, Barclays notes that this constitutes “growing evidence that exchange rate management remains important to policy makers.”

(Barclays)

According to reports out Friday, 

the U.S. is planning to ask the Chinese trade delegation to agree to strengthen the currency, an proposition that is laughable on multiple fronts. We described why that effort is so absurd in “You Can’t Fix Stupid: U.S. Treasury Will ‘Pressure’ China To Strengthen The Yuan.”

Emerging markets will remain on the frontburner after a week that saw developing economy assets struggle to digest the turmoil in the Turkish lira. EM equities are in a bear market, have fallen for three consecutive weeks and are coming off their worst week since February.