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• The US dollar continues to trade with a bearish tone on Tuesday, as Trump's hardline approach on Iran has impacted US yields and the USD in tandem. Furthermore, broader optimism surrounding trade/tariff negotiations has boosted equities, supporting risk sensitive currencies in G10 to their best levels of the session.
• As such, the likes of EUR and AUD are trading with around 0.40% gains on the session, while CAD leads the G10 advance, appreciating 0.69%.
• Highlighting the broad offer for the greenback, USDCNH (0.46%) has also been extending its reversal south, briefly touching below 7.28, a dynamic that has also been solidly supporting emerging market currencies.
• For now, EURUSD gains are considered corrective, however the powerful recovery from yesterday’s cycle lows has seen the pair breach initial resistance at 1.0350, the Jan 31 low and Monday’s high. A stronger recovery would place the focus on 1.0446, the 50-day EMA and then 1.0533, the Jan 27 high and a key resistance.

• Spread set at MS + 90bps (IPTs were +120bp area, guidance: + 95bp area)
• Size: E2bln (MNI expected E1.5bln)
• Final books in excess of E4.4bln
• HR 88% vs 4.00% Jan-37 Bund
• Maturity: 11 February 2037 (12-year)
• Settlement: 11 February 2025 (T+5)
• ISIN: XS2997390153
• Joint Bookrunners: Erste Group, IMI-Intesa Sanpaolo/PBZ, ING (B&D), J.P. Morgan, Morgan Stanley
• Timing: Hedge deadline 16:05GMT / 17:05CET, pricing shortly after

From market source

• G10 FX gaining against the USD in recent trade, which is extending slippage into the London close, largely stemming from Trump's hardline approach on Iran. This drove the push lower in the front-end of the US yield curve and, in turn, has pressured the greenback.
• With spot GBP/USD through the overnight high at 1.2455, markets are now testing horizontal resistance layered between 1.2471-76 to confirm a full reversal of the weakness posted since the reopening of trade on Sunday evening.
• Strength today also narrows the gap with the 50-dma - a level that held as firm resistance in late January and now crosses at 1.2505. This level could prove key into the BoE decision on Thursday. We wrote earlier today on the growing expectations that the BoE will edge up their estimate of the neutral rate as part of Thursday's policy report - confirmation of which could work further against easing expectations this year - and strengthen GBP.