Forex Today: GBP dumped on Hard-Brexit, EZ trade data – Up next

The Asian session was dominated with moves-driven by a massive sell-off in GBP, after the UK press’ narrative on line of comments expected from the UK PM May on Brexit, as she unveils her Brexit-plans tomorrow.  A typical risk-off profile emerged in the markets on Hard-Brexit fears, boosting the demand for safe-havens such as gold, yen etc. While USD remained on the front-foot amid aggressive selling in GBP/USD.

Looking ahead, we have a data-light economic calendar, with the Eurozone trade balance data and ECB policymakers’ speeches due on the cards; will keep the EUR traders s lightly engaged. While thin liquidity and minimal volatility is expected to persist as the US markets are off on a National Holiday.

Main topics in Asia

GBP/USD start of week hard Brexit talk volatility, back on the 1.20 handle

GBP/USD is back above the psychological 1.2000 after a bearish opening gap that took the pound down over 200 pips vs the greenback at the start of a week when markets are awaiting PM to make a keynote speech regarding plans for Brexit.

Fitch: Australian banking sector on a negative outlook

Fitch rating agency is out with a note, warning that Australian banks are now on a negative outlook from stable. Fitch observes that the worsened outlook reflects an increase in macroeconomic risks and pressure on profit growth.

BOJ’s Kuroda: Will maintain QQE with YCC for as long as needed to achieve 2% price target

Bank of Japan (BOJ) Governor Kuroda was on the wires last hours, via Reuters, commenting on the bank’s monetary policy program.

Risk-off grips Asia amid Hard-Brexit concerns

The Asian markets opened the week on a weaker note, with most major indices down in the red zone, as investors move away from risky assets in wake renewed risk-aversion wave, triggered by re-emergence of Hard-Brexit fears.

Key focus for the day ahead

ECB speakers amongst market movers today – Danske Bank

Research Team at Danske Bank suggests that the main event today is the speeches by the ECB's Yves Mersch and Peter Praet ahead of the ECB meeting on Thursday.

Weekend press point to high risk UK Brexit strategy, market negative – Deutsche Bank

Oliver Harvey, Macro Strategist at Deutsche Bank, notes that the major UK Sunday newspapers report today that Tuesday’s Brexit speech by PM Theresa May will used to outline an uncompromising position including full control over immigration, sovereignty from ECJ decision-making and preparedness to exit the customs union.

EURUSD: Opportunity to re-load shorts - TDS

Ned Rumpeltin, European Head of FX Strategy at TDS, thinks that the recent rise of EURUSD above the 30 December spike high of 1.0653 suggests a further upward correction may be due in EURUSD.

Data preview for US economy: industrial production to rebound - Nomura

Analysts at Nomura noted the forthcoming US data and explained that they are expecting industrial production to rebound in December and steady advances in consumer prices.