Sterling started the week on the defensive....>

FOREX: Sterling started the week on the defensive as participants assessed the

chances of an interest-rate cut from the BoE at the Jan 30 meeting. A slew of

disappointing data prints and dovish BoE rhetoric from earlier this month have

fuelled BoE easing bets. A big miss in UK retail sales reported on Friday saw

implied probability of a rate cut in January jump to ~71% from ~62%. GBP was

further pressured by a round of weekend comments from C'llr Javid, who signalled

that the UK will not seek a close economic alignment with the EU after Brexit. 

- NOK drew support from a jump in oil prices driven by supply disruptions in

Libya and Iraq amid heightened geopolitical tensions. CAD failed to follow suit.

Safe havens also seemed to look through geopolitics and traded on a softer note.

- The PBoC set the central USD/CNY mid-point lower than exp. & at a six-month

low, propping up the yuan. USD/CNH sank through a key support zone to print its

worst levels since early July and currently threatens to challenge CNH6.8500.

Elsewhere, China's central bank left its 1- and 5-Year LPR unchanged.

- German PPI is the only data release of note today. ECB President Lagarde will

take part in a closed-door event. The U.S. is off for a federal holiday.