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CABLE: Cable is testing the psychological $1.3000 barrier after slipping 10 pips
thus far. Sterling is the worst G10 performer, even in the absence of potential
headline catalyst. Persistent worry re: the UK's future relationship with the EU
and positioning ahead of the Jan 30 BoE monetary policy meeting may be applying
some weight.
- The rate had a look below $1.3000 yesterday, but then retraced the move,
stabilised post-WMR fix and closed marginally below neutral levels.
- A clean break under the aforementioned round figure would prompt bears to
target the nearby Jan 14 low of $1.2955. Bulls look to retake the 50-DMA at
$1.3040, before turning focus to the Jan 17 high of $1.3118.
- Market pricing of a 25bp rate cut from the BoE this month pared back a tad,
but remains elevated at ~67% (vs. Friday's ~71%).
- Some key UK data releases this week include labour market report (Tuesday) and
flash Markit PMI surveys (Friday). BOE Gov Carney speaks on Tuesday & Wednesday,
his colleague Haskel appears on Friday as they take part the WEF in Davos.

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