Good Morning All;
GBP: A report in the Sunday Times suggested that Tuesday’s speech by UK PM Theresa May will signal plans for a hard Brexit by saying she will be willing to quit the Europeans Union’s single market for goods and services to regain control of Britain’s borders and laws, however, the report did not attribute the source and while the market was always going to react to the article where else would the UK start but at the worst case scenario and go forward with that, opening around the 1.2020 areas having seen pre-market testing a little lower in an illiquid market, the market traded lightly through the 1.2050 areas into the Tokyo session before slipping back with cross selling dominating the market, the Cable ran quietly for a short period along the 1.2020 levels before rising back to the 1.2040 level and holding through to the grey hours, downside bids more sentimental around the 1.2000 areas with possibly better bids into the 1.1930 areas become very vulnerable on a push lower and below that well its anyone’s guess, the only good thing for the day is the US is closed for Martin Luther King day so is possibly going to be quiet for the most part, topside offers light through the 1.2050-60 area with limited offers through the 1.2100 level and limited stops, a move through the level will likely see limited congestion through 1.2150 however the possibility of a short squeeze through that area will be all dependent on liquidity through the day.
EUR: As the session progressed President elect Trump made less than favourable remarks on the subject of the European Union, stating that a trade agreement with the UK would be quick in coming and that the UK would not be the last to break from the Union, he also stated that NATO was obsolete and was probably a direct swipe at the continual underfunding of NATO forces across Europe over the decades and Europe’s reliance on the US. Opening a little lower from Friday’s close the Euro played second fiddle to the GBP with the drag of the GBP, then seeing the EURGBP sold back from the opening highs around the 0.8845 levels to test 0.8810 moving the Euro to its Topside offers likely light through the 1.0640-60 areas with stronger offers likely into the 1.0680-1.0700 areas with weak offers likely to appear on a move through the 1.0710-20. Downside bids congested through the 1.0550 levels with better bids on a move through 1.0500 areas and the 1.0450 areas very congested.
JPY: A slow drift lower with the market initially opening around the 114.40 areas and then giving ground before the move into the Tokyo session, the market recovered to the opening levels but then drifting through the balance of the session testing the 114.00 levels in a quiet day for the JPY, Topside offers through the 114.50 areas is likely to be light with only limited offers through the 115.00 areas however, with a US bank holiday this is likely to be limited in movement and more likely to be affected by Cross trades through Euro and GBP. Downside bids into the 113.80 levels tested through last week and still in the way, a break here will likely see weak stops dominating the market and better bids as the market trades towards the 113.20 areas if it can make it.
AUD: Very quiet session for the Oz missing much of the story lines and so having made the highs before Tokyo on cross Oz dealing with the market barely making it above the 0.7505 levels before drifting through the Tokyo session to test the 0.7470 levels and holding into the grey hours. Topside offers through the 75 cent levels that have dominated the last week and dating through to end of last year a push through the 0.7530 areas could possibly see weak stops opening the market to the 76 cent levels, Downside bids light through the 74 cent areas with a little bit of congestion on moves through to the 0.7350 areas however, a quiet day is likely for the pair unless it gets dragged around with the GBP and Euro.