OIL: Supply In Focus, Crude Continues Rally On Hopes Of Another OPEC Delay

Yen's gains for last week were pared through Friday trade. Yen lost a little over 0.70% for the session. We track near 156.25/30 in early Monday dealings, little changed from end Friday levels in NY. Yen was still up 0.90% last week, the best performer in the G10 space. 

• Last week's pullback in USD/JPY didn't breach the 50-day EMA support zone (154.92). This leaves the pullback corrective, at least for now. A return higher and a breach of 158.87, the Jan 10 high, would confirm a resumption of the uptrend and open 159.45, the Jul 12 ‘24 high. These highs are some distance away though.  
• EUR/JPY recovered some ground on Friday, testing around 161.00, which weighed on yen performance. USD sentiment softened as headlines crossed of a Trump-Xi phone call. This aided broader risk appetite, as descriptions of a positive tone for China/US relations provided a boost. Global equities were higher, the SPX rose 1.00%. However, aggregate USD weakness was contained. The USD BBDXY index only fell a modest 0.23% last week.
• Locally, we have core machine orders on tap today for Nov, along with Nov final IP and capacity utilization. The tertiary index for Nov also prints. This comes ahead of Friday's BoJ meeting outcome, where the economic consensus and market pricing has shifted to strong hike odds.
• Closer focus will rest on Trump's upcoming inauguration, with FX and broader market risk sentiment likely most sensitive to any tariff announcements.  

• Philippines To Sell PHP 7.0Bln 91D Bills (PH0000058455).
• Philippines To Sell PHP 7.0Bln 182D Bills (PH0000058927).
• Philippines To Sell PHP 8.0Bln 364D Bills (PH0000059800).
• Bank of Korea to Sell KRW1.2Tn 91-Day Bonds.
• South Korea to Sell KRW2.4tn 10-Year Bonds.

The G10 were down against the US dollar on Friday but the Aussie was one of the better performers as risk appetite improved following news that President-elect Trump had requested a trip to China to meet President Xi signalling possibly better-than-expected relations between the two. AUDUSD rose to 0.6227 on the news before trending lower to 0.6193 to be down 0.3% on Friday. It is currently around 62c. The USD index rose 0.3%.

• The bearish trend in AUDUSD continues with lower lows and lower highs. Moving-average studies are also in a bear mode. On Friday the pair fell to 0.6165. Initial support is at 0.6131, January 13 low, and resistance at 0.6233, 20-day EMA.
• With the yen underperforming in the better risk environment, AUDJPY rose 0.4% to 96.79 after a high of 97.17. AUDNZD is 0.1% higher at 1.1092 after a low of 1.1065. AUDEUR was down slightly at 0.6029. AUDGBP is 0.2% higher at 0.5089.
• Equities rallied with the S&P up 1% and Euro stoxx +0.8%. Oil prices were lower with Brent falling 0.7% to $80.79/bbl. Copper fell 2% on Friday while LME base metals rose 1.9% on the week. Iron ore is around $101.50/t.
• Today there are no data or events in Australia.