OIL: More detail from Bloomberg on the roadmap for reciprocal tariffs

• over +128,600 TYH5 108.5 calls on the day from 27 to 29 vs. futures from 107-08.5 to -11 on an appr 0.30% delta

RRP usage retreats to $160.219B this afternoon from $183.669B on Monday. Compares to $98.356B on Friday, December 20 - the lowest level since mid-April 2021. The number of counterparties rises to 59 from 51.

• The ICE USD index sits half a percent lower on the session Tuesday, as the greenback extends a moderate retreat ahead of the key CPI data tomorrow. Softer-than-expected PPI data helped the greenback consolidate overnight weakness, with higher long-end US yields and lower equities unable to support the dollar.
• It is clear that the Fed will hold in January, with the first plausibly “live” meeting not until March. But with pricing having shifted so quickly away from 2025 cuts, it’s a good juncture to assess whether markets have gotten too hawkish, with the greenback potentially vulnerable to a deeper correction.
• Price action has seen EURUSD briefly climb back to the 1.0300 handle, rising 0.5% on the session. Higher German yields have been supportive of the single currency at the margin, further evidenced by EURGBP rising to a 4-month high of 0.8451.
• As noted, a sustained breach of 0.8448 resistance would signal scope for a move towards 0.8494, the August 26 high. Separately, the August highs reside at 0.8625, which could garner attention should UK fiscal concerns/uncertainty deteriorate further. Both the 20-day and 50-day EMA’s represent initial support for the cross, currently intersecting around 0.8325. UK CPI is due early Wednesday.
• Overall, broad pressure on core fixed income continues to weigh on the Japanese yen, with EURJPY extending its intra-day advance to 0.8% and now 260 pips above the Monday lows around the psychological 160.00 mark. USDJPY has also risen back to 158.00, as market participants continue to weigh rhetoric from Japanese officials ahead of the January BOJ decision.