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USD/JPY Clears 110 to narrow gap with.........>

FOREX
FOREX: USD/JPY Clears 110 to narrow gap with multi-month highs
- It was a generally quiet session in G10, with most major pairs headed into the
close near flat, reflected in lower implied vols across DM currencies. After a
few sour sessions though, GBP inched higher, gaining against most others in G10.
No headlines or data crossed to support the move suggesting the market may be
closing successful shorts ahead of the next slew of UK data, starting with
retail sales data Friday and PMIs next week. The modest improvement in the GBP
coincided with the a slight pullback in the market pricing for a BoE rate cut as
soon as January, which fell around 5 percentage points to circa 60%.
- Elsewhere, US economic data generally fared well, with retail sales, Philly
Fed outlook surveys and weekly jobless claims all stronger than forecast. This
underlined a minor bidtone under USDJPY, which now appears to have cleared the
Y110 handle which bulls had previously had difficulty in holding above.
- Chinese GDP data for Q4, UK retail sales, US housing starts/building permits,
industrial production and prelim Uni of Michigan numbers are the data highlights
Friday. Fed's Harker and Quarles are both due to speak.

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