G20: Foreign Ministers' Meeting Set To Start With US' Rubio A Notable Absence

• In the aftermath of the WSJ report induced volatility, EURCHF rose to a near four-month high at 0.9461, notably piercing above the pre-US election highs situated just below the 0.9450 mark. While the cross has pulled back today, price has been consolidating above 0.94 and moving average indicators are turning more bullish in tandem.
• With this in mind, a cluster of daily highs around the 0.95 handle remain a key target for the move should the Swiss Franc continue to underperform. This might closely coincide with USDCHF returning to cycle highs around 0.9200 and the key medium term resistance area between 0.9224/44.
• As a reminder last week, Bank of America recommended buying a 3m 0.92/0.9450 USDCHF call spread, citing "trade uncertainty, strong growth and policy divergence" behind a stronger Dollar alongside bullish technical conditions and a forward discount / carry factors supporting the position.
• The Swiss calendar remains light until CPI data on February 13, with the SNB not meeting again until March 20.

Schatz Swap related trade, suggest more Paying flows:

• DUH5 ~11.6k at 106.615.

French OAT has now also closed its opening gap, following on the Bund and Tnotes (TYH5).

Next support in Bund will be seen at 131.50, was not only Yesterday's low, but also Friday's low.

• Tariff headlines continue to dominate proceedings after President Trump said last night that he thinks 25% tariffs on Canada and Mexico will be enacted from Feb 1, dashing some optimism after reports yesterday had anticipated no tariffs would be unveiled on “day one”.
• Canadian premiers and officials are still working on a response, with Minister for Intergovernmental Affairs (and recently promoted FM) LeBlanc saying none of this should be surprising with Canada still committed to talks on border security.
• USDCAD currently at 1.4443 is back to just 20-25 pips below levels seen prior to the market-moving WSJ report yesterday. That’s via yesterday’s low of 1.4262 (clearing multiple supports) before spiking to 1.4516 overnight for fresh highs since early in the pandemic and before that 2016.
• Those swings have established wide initial technical levels, with further resistance seen at 1.4539 (Fibo projection) and support at 1.4230 (50-day EMA).
• Surprisingly, whilst under heavy pressure having slid 0.9% against the US dollar, CAD isn’t bottom of the G10 FX pack and is broadly in line with AUD and NZD whilst outperforming NOK with oil prices pushing lower.
• CORRA futures are trading up to 3 ticks firmer on the day, whilst BoC-dated OIS prices 19bp of cuts for next Wednesday’s BoC decision.
• Today’s CPI report offers some near-term focus. MNI Canada CPI Preview: https://media.marketnews.com/Canada_CPI_Prev_Jan2025_c2d4f416b4.pdf