Archives of “January 2020” month

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Reminder: US markets are closed today

  
Analysis, US Market
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It is Martin Luther King Day in the US

MLK

Major currencies are continuing to trade in a rather subdued manner today and may yet carry on later in North American trading, as we observe a long weekend in the US.
Liquidity conditions are expected to stay thin and with Wall St not offering any direction for investors to latch onto, trading sentiment remains rather indecisive to start the week.
The pound has been the notable mover so far in the European morning but it isn’t too big a move as the currency stays pressured ahead of the BOE meeting next week.
Meanwhile, European stocks are more mixed with some slight weakness but are keeping near flat levels overall. That isn’t lending to much direction in the risk mood with USD/JPY still resting at 110.17, trapped in a 17 pips range so far today.

Big week coming up for the pound

  
Analysis, Forex
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The near-term sentiment in the pound continues to be driven by odds of a BOE rate cut ahead of the 30 January policy meeting

  • 21 January – UK November average weekly earnings, unemployment rate
  • 21 January – UK December jobless claims change, claimant count rate
  • 24 January – UK January flash manufacturing, services, composite PMI
It is all about data, data, data for the pound this week. With the hot topic being a possible rate cut by the BOE, all eyes will turn towards the labour market report tomorrow and post-election PMI data later on Friday (⬆️).
Currently, odds of a 25 bps rate cut by the BOE on 30 January sit at ~70% – a key threshold that has historically seen the central bank take action when it comes to rate decisions.
GBP

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Iran says that it still respects the JCPOA deal

  
Analysis, Crude

Iran says that it is working on last steps to reduce nuclear commitments

Iran
  • Says that the claims made by the EU are unfounded
  • Criticises European powers for not fulfilling their obligations
  • Says EU resorting to dispute mechanism lacks legal value
Iran is continuing with the play acting – as you would expect – following the recent events that took place at the start of this year. The nuclear deal is hanging on by a thread at the moment but ever since the US has pulled out, it has lost a lot of its importance already.

“First of the new decade” central bank decision coming up this week – ECB, BOJ, BOC

  
  Analysis

Despite the ‘first meeting of the new decade’ hype that you are bound to hear these three are likely to keep policy on hold.

  • Bank of Japan meets today and tomorrow, decision announced at the meeting conclusion on Tuesday 21 January 2020
  • Bank of Canada day follows, on Wednesday 22nd.
  • The European Central Bank is next, on Thursday 23rd. Notable for noob president Christine Lagarde (meeting #2) still finding her feet? Probably not, she is an old hand at dealing with institutional politics.
All of these 3 central banks will be looking at a stabilising global environment:
  • fewer Brexit-related questions (still plenty, but at least there is some certainty ahead compared with 3 months ago)
  • improved data from China
  • US-China phase 1 deal signed
Despite the 'first meeting of the new decade' hype that you are bound to hear these three are likely to keep policy on hold.
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