On Friday, the US official employment report for December is due in the United States. James Knightley, Senior Economist at ING explains the November report showed job creation well ahead of expectations, but he sees slower growth in December. Key Quotes: “After a remarkably strong November labour report, we expect to see a more muted yet still respectable set of jobs numbers for December. The November figure (266,000 with 41,000 upward revisions to the previous two months) was boosted by the return of formerly striking GM employees to the working population. It lifted the headline figure by around 46,000 directly with a further uplift from GM component suppliers who had put staff on temporary leave due to a lack of demand during the strike. Nonetheless, this was still well ahead of the consensus forecast of 180,000 and so helped cement the market view that there would be little need for the Federal Reserve to loosen monetary policy further after the three rate cuts seen in 2H19.” ..

GOP senators introduce a resolution to change rules and dismiss Trump impeachment without articles, The Hill has reported. Roughly a dozen GOP senators want to change the Senate’s rules and allow for lawmakers to dismiss articles of impeachment against Presedent Trump before the House sends them over. Sen. Josh Hawley (R-Mo.) introduced the resolution on Monday, arguing the Senate's impeachment rules do not envision a scenario where the House would delay transmitting articles against a president, as Speaker Nancy Pelosi (D-Calif.) has done. "The Constitution gives the Senate sole power to adjudicate articles of impeachment, not the House. If Speaker Pelosi is afraid to try her case, the articles should be dismissed for failure to prosecute and Congress should get back to doing the people’s business," Hawley said in a statement. The resolution would give the House 25 days to send articles of impeachment over to the Senate. After that, a senator could offer a motion to dismiss..

The US army has told Iraq in an official letter that it is preparing to "move out", according to AFP News Agency. The growing calls for the departure of roughly 5,000 US troops may prove impossible to ignore. This news comes following Iraq’s Parliament calling for the expulsion of US troops from the country on Sunday in reaction to the American drone attack that killed a top Iranian general. The news is in stark contrast to US Secretary of State Mike Pompeo's dismissal of the Iraqi Parliament’s vote Sunday. “We are confident that the Iraqi people want the United States to continue to be there to fight the counterterror campaign. And we’ll continue to do all the things we need to do to keep America safe," Pompeo said on “Fox News Sunday, “We’ll have to take a look at what we do when the Iraqi leadership and government makes a decision,” he said. “But the American people should know we’ll make the right decision.” There are, however, concerns that a pullout of the estimated 5,200..

Mexican peso recovers strength after Friday’s slide versus US dollar. USD/MXN keeps testing the 18.80 support area, remains in range. The USD/MXN jumped on Friday to 19.03, the highest level in over two weeks amid Middle East tensions. Today it reversed and bottomed at 18.79, the lowest intraday level since May. As of writing, it trades at 18.85, off lows but still in negative territory for the day. Market concerns ease, US dollar weakens Market sentiment reversed during the European session and improved, helping the demand for emerging market currencies. Wall Street indexes are now modestly higher, after opening in negative. US yields also rebounded, helping the DXY to move off lows. As the greenback recovered ground or stabilized against majors, it printed fresh lows versus some emerging market currencies, like the Mexican peso. Levels to watch The USD/MXN remains in a consolidation range. On Friday it peaked at 19.02 but failed to hold. The rally found resistance at the 2..

British Prime Minister, Boris Johnson, is due to meet with the new president of the European Commission Ursula Von der Leyen in London on Wednesday for the first post-election Brexit trade talks. Ursula von der Leyen will meet the Prime Minister on Wednesday in Number 10 to discuss the opening positions of the EU and the UK in the upcoming negotiations. The visit comes ahead of Britain’s expected exit from the EU on January 31, and will provide the first opportunity for Johnson to outline the UK’s opening position in talks, which are set to officially begin in February or March. FX implications The pound is set to move lower should negotiations point to a hard Brexit scenario. There could be volatility on each and every related headline at the extreme depending on sentiment. GBP/USD Price Analysis: Pound pressuring the 1.3172 resistance vs. US dollar

Qatar Emir, Sheikh Tamim bin Hamad al-Thani, spoke with Iraqi prime minister to discuss efforts to reduce tension to maintain the security and stability of Iraq and the entire region - Qatar’s Amiri Diwan said in a statement. They discussed the developments of events on the Iraqi scene and the efforts made to reduce tension to maintain the security and stability of Iraq and the entire region, the statement said. The phone call came after the killing of a top Iranian military commander, Qassem Soleimani, that has sparked a major escalation of regional tensions. Markets implications There is growing speculation, and outright hope, that the situation will not escalate beyond, perhaps, some form of proxy retaliation from Iran for which the US will be less likely to respond with 'disproportionate' measures. Therefore, the case for lower oil prices is on the cards. Upward pressure on oil prices to be short lived – ABN AMRO

JPY loses strength as market sentiment improves in American session. Wall Street's main indexes turn positive after opening deep in red. US Dollar Index pulls away from lows after upbeat PMI data. The USD/JPY pair rose above the 108 handle during the early trading hours of the American session and continued to push higher as the improving market sentiment made it difficult for the JPY to find demand as a safe-haven. As of writing, the pair was up 0.25% on the day at 108.35. In the absence of fresh developments that could hint at a further escalation of the conflict between the United States and Iran, the market mood turned positive in the second half of the day. Additionally, White House adviser Conway said that it was still possible for the US to renegotiate a nuclear deal with Iran. After opening deep in the negative territory, Wall Street's main indexes climbed into the positive territory and the 10-year US Treasury bond yield, which slumped to its lowest level in a m..

USD/CAD bars in control as correlation remains positive to bullish oil prices. USD/CAD is technically offered below key moving averages, trendline support and a long-term 38.2% Fibo. The price of oil is elevated on speculation that there will be a disruption to world supply from the Middle East and further escalation of the tit-for-tat proxy war that just turned real between Iran and the US following the assassination of one of Iran's top generals. This, in turn, will likely to continue to support the loonie and underpin a move to the downside in funds as markets factor in the likelihood of the Federal Reserve moving back onto the defensive foot. This would all depend on there being an inflection in the US and global economy, following either a breakdown in the US and Sino trade negotiations or a war in the Middle East with the threat of rising inflation. "We caution against expectations for a sensational response from the Iranian regime, expecting instead that any respons..

AUD/USD is starting the new year by pulling back down below the 0.7000 handle. The level to beat for sellers is the 0.6929 support. AUD/USD daily chart AUD/USD is retracing down for the fourth consecutive day while below the 0.7000 handle and above the main simple moving averages (SMAs). AUD/USD four-hour chart The market is retracing down below the 50 and 100 SMAs as the spot is trapped in the 0.6960-0.6929 range as expected. Sellers would be looking for a break below the 0.6929 level and set their eyes on 0.6893 in the medium term. However, if bulls get a daily close above the 0.6970/0.6959 price zone, then the 0.7000 handle can be back on the radar, according to the Technical Confluences Indicator. Additional key levels

"Brent oil prices touched USD 70/bbl on Monday as the tensions between Iran, Iraq and the US continued to escalate," noted ABN AMRO Senior Energy Economic Hans van Cleef and explained that oil prices' strong reaction is due to the fact that the region supply roughly 23 million barrels per day. Key quotes "As long as these tensions do not result in actual production disruptions, we judge that the upward pressure on prices will prove to be short lived. The forward curve pictures a steep backwardation, suggesting that the stress of possible supply constraints are anticipated to have only an effect in the very near term." "Due to the global production oversupply – even despite an OPEC production cut – and ample global inventories as well as strategic oil reserves, there will be no shortages of oil in the near term. Furthermore, investors already extended their long positions since early December and are already therefore positioning for further price gains." "If the tensions do no..

AUD/JPY consolidates as markets in wait-and-see mode with respect to Iran/US tensions. AUD/JPY supported in a rising bearish wedge, fragility in play on fundamentals. While the world is watching for Iran's response, which many fear could trigger an escalation in tit-for-tat aggression, risk FX, such as AUD/JPY being the market's main barometer, will be volatile on rumours and headlines. We have seen a range since the start of the year between 76.24 and a low of 74.73. For the start of the week in European and US markets, the cross has stuck to a tighter range of between 74.73 and 75.20. The price has morphed into consolidation as the US dollar firms a touch, both oil and gold gave back some ground and US stocks have firmed on their lows, albeit pressured in slightly negative territory following October's bull run to record highs. Waiting for a consensus over the geopolitics between the US and Iran It would seem that the markets can't find a consensus over the..

According to analysts at Wells Fargo, higher oil prices do not have as much of a slowing effect on the US economy as they did years ago. They warn however, about the uncertainty that the crisis could impart could potentially be more meaningful. Key Quotes: “Higher oil prices currently have more of a stimulative effect on the U.S. economy, which partially offsets some of the drag from slower real PCE growth, than they have had historically.” “American production of crude oil has mushroomed over the past decade due in large part to technological advances in drilling. Higher oil prices, if sustained, encourage more investment in the energy sector. Furthermore, other industries are not as dependent on oil as an energy source as they were in the 1970s. In short, the direct effects of the Iranian crisis on the U.S. economy appear to be rather small.” “The uncertainty that the crisis imparts could potentially be more meaningful. Stock markets have weakened since Soleimani’s death, and cr..