Crude weakness sinks commodity-tied FX........>

FOREX: Crude weakness sinks commodity-tied FX

-Japan's absence prompted a quiet start to the session, with few datapoints

helping to distract from general USD weakness in early trading hours. That

remained the case into the US close, although losses were trimmed as US

Treasuries recovered. Market focus was on Trump's meeting with Putin, which

produced a glut of headlines, although little was market-moving.

-WTI had its second daily drop of over 4% in as many days as traders focussed on

Saudi Arabian reports suggesting the country was offering extra supplies to some

customers, twinned with more speculation that the US could tap the SPR. This

sank AUD, CAD, although NOK was largely spared.

-Options volumes were light with few notable trades in the major pairs, although

AUD/JPY volume surged with puts in firm demand. Expiries were sequenced from

September until the end of the year with just over A$3.1bln in AUD/JPY puts vs.

A$500mln in call trades.

-Focus Tuesday turns to UK jobs numbers, US industrial production and the first

part of Fed's Powell's semi-annual testimony.