FRANCE DATA: A Beat For Q4 Wages But Still Implies Y/Y Easing Ahead

Little reaction in wider gilts to the Mar-30 auction. Cover solid enough at 3.00x, while the tail was tighter than the previous offering.

• Light pressure was seen into the auction, with some stabilisation seen in the time since given the solid enough metrics outlined above.
• Yields little changed to 1bp lower across the curve on the dat.

• Aggregate G10 FX moves have been relatively muted in early Wednesday trade, with the US dollar slightly firmer (DXY approaching 109.00 once more) as we approach the FOMC minutes later in the session.
• EURUSD has been slowly eroding the rally from earlier in the week, that was underpinned by higher-than-expected German inflation and hints that US tariffs could be more selective than first thought. With the underlying bullish dollar trend prevailing, EURUSD is now ~120 pips off the week’s highs and notably back below the prior breakdown point of 1.0335.
• The bullish trend for USDCHF since the US election remains firmly intact, and yesterday’s Swiss CPI data has assisted the pair back above the 0.91 handle during this morning’s session. Cycle highs reside at 0.9137, and above here, the medium-term targets at 0.9158 and 0.9224 appear well defined. Prior pullbacks have been well supported by the 20-day exponential moving average, which now intersects at 0.9015.
• Notably, EURCHF has been consolidating back above 0.9400 and a resumption of strength would place the technical focus on a cluster of September highs around the 0.95 handle.
• AUDUSD sits a little softer on the session as the trimmed mean measure of Australia CPI eased 0.3pp to 3.2%. However, given the RBA continues to focus on quarterly CPI data and it wants to be confident that inflation will return sustainably to the band, downside AUD momentum failed to materialise given it may be too early to tell if monthly inflation is trending lower again.
• US ADP employment and jobless claims headline the Wednesday data calendar before the FOMC minutes. FOMC Member Waller is on the speaker schedule, while ECB’s Villeroy speaks in Paris.