POWER: Lativan TSO to Conduct Isolation Tests Ahead of EU Sync

SX5E (18/06/27) 3600/3500ps, bought for 12.1 in 4k.

• The RBA rate decision worked against the AUD, as the bank are reportedly "gaining some confidence" over the trajectory of inflation. As a result, markets (and sell-side) have bought forward their view for the next likely rate cut in Australia. As a result, AUD/USD faded to 0.6380 intraday, keeping support under pressure at the December pullback low of 0.6373.
• EUR/GBP has broken to new YTD lows, with spot dropping to new pullback lows, and the lowest levels in over two-and-a-half years as markets re-enter a previously-tested area of demand. We had noted across the past few weeks a clear area of demand in the cross layered between 0.8260-87 that coincides with the longer-term range-defining support. Note that this equates to 1.21 in GBP/EUR - a psychological resistance level that often draws attention, and has not been meaningfully broken since 2016 and the year of the Brexit referendum.
• EUR/USD spot has been led lower by the uptick in US yields, putting spot through yesterday's lows and within range of 1.0517, the 38.2% retracement for the upleg off the cycle low from mid-November, and next major support. Overnight EUR vols have crested just above 14 points - below the prevailing levels seen pre-NFP last week. With tomorrow's print the last of the year and likely directly influencing next week's rate decision, an outside-of-consensus print will test the sustainability of the USD Index's stabilisation above December lows.
• Tuesday data and speaker schedule is light, with no notable US releases outside of nonfarm productivity stats and unit labour costs. The Fed remain inside their pre-rate decision media blackout period - keeping the calendar clear.