Oil finishes flat, deflating USD and JPY......>

FOREX: Oil finishes flat, deflating USD and JPY

-JPY had been one of the big gainers following Trump's unexpected strike against

Iran last week, but that performance faded fast Monday as markets chose to sell

off gains in WTI and Brent crude futures, which helped sooth the risk-off tone

and a (slight) recovery in equities. This kept a bidtone under USD/JPY and

EUR/JPY, keeping JPY at the bottom of the G10 pile alongside commodity-tied

currencies including the AUD. The USD index traded below the Friday lows and is

narrowing the gap on the opening levels of 2020. The moves followed generally

better European PMI data and no further escalation in US/Iran hostilities.

-GBP was favoured as PMI data fared better than expected (the services sector

came in at 50.0 vs. 49.1 expected), which helped support the GBP bid and gave

GBP/USD a boost back above $1.3150. This kept GBP realised vols elevated after

the post-election swings fed into the New Year, but implied vols remain

depressed below 8 points.

-Tuesday brings Eurozone retail sales and CPI data, Canadian trade balance and

US final durable goods orders. The speaker slate is empty.