BRAZIL: January Trade Due Today, IPCA Inflation Next Week

New 10-year - record book for a single tranche

• Size: E13bln (MNI expects E10bln)
• Spread set earlier at Feb-35 BTP + 7bp (guidance was + 9bps area)
• Books in excess of E142bln (ex JLM interest) - record single tranche book
• Maturity: 1 August 2035

New Green 20-year

• Spread set at 4.45% Sep-43 BTP +5bp (guidance was + 8bps area)
• Books in excess of E127bln (ex JLM interest) pre-rec
• Size previously set: E5bln WNG
• Maturity: 30 April 2046

• Significant pressure on UK Gilts is filtering through to a weaker currency, with the firm dollar bid prompting GBPUSD (-1.1%) to slide the best part of 120pips in short order. Momentum picked up through the early session lows of 1.2440, with spot printing lows of 1.2335 so far.
• The trend condition in GBPUSD remains bearish and the sharp sell-off on Jan 2 confirmed a resumption of the medium-term downtrend. The bear trigger of 1.2353 (Jan 2 low) has been breached and below here, the focus will be on the 2024 lows at 1.2300 and 1.2266, the Nov 14 2023 low.
• The US dollar is firmly bid, with topside momentum gaining amid reports that Trump is considering a national economic emergency declaration to allow for new tariff program. As such, EURUSD (-0.61%) has been eroding the rally from earlier in the week, and is now ~160 pips off the week’s highs and notably back below the prior breakdown point of 1.0335. The bear trigger has been defined at 1.0226, the Jan 2 low. 
• The broad dollar bid has helped AUDUSD (-0.64%) back below 0.6200 to near 2-year lows. Recent weakness maintains the price sequence of lower lows and lower highs, highlighting a dominant downtrend. Scope is seen for an extension towards 0.6158 next, a Fibonacci projection.
• 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.
• 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.

SFIM5 96.15/96.45/96.75c fly, bought for 2 in 6k total.