OIL: Safety Inspections of Russian Vessels Through Danish Straits

Firmer-than-expected German CPI data keeps ECB-dated OIS pinned to pricing ~100bp of cuts through ’25, 15-20bp less dovish than the levels that prevailed in the run up to the Christmas break.

• Hawkish inflation data counters most of the impact of the dovish source reports that pointed to a potential moderation in incoming U.S. President Trump's tariff policies (when compared to the hard line adopted during his election campaign).
• A 25bp cut at this month’s ECB meeting is still near enough fully discounted and remains the base case for the sell-side.
• Euribor futures 3.0-5.5 lower, at/just off session lows.
• Early ’25 has seen ERZ5 break the uptrend line drawn off the mid-June lows. Next downside target is 8.0 below prevailing levels, at the November low (97.8550).

Fig. 1: Euribor '25 Futures (ERZ5)

Source: MNI - Market News/Bloomberg

• The Dollar takes another leg lower, a continuation since the Trump Washington Post story on Tariffs earlier, testing broader base lows against the Yen, GBP, EUR, CZK, CNY, AUD, NOK, and NZD.
• AUD is the best performer now in G10, up 1.32% and testing the 0.6300 handle, this area also represent levels AUDUSD was trading at the pre last Hawkish FOMC on the 18th December.
• Small immediate resistance is seen at 0.6308.

• 5,000 SFRU5 95.62/95.81 put spds 7.0 vs. 10,000 96.75/97.12 call spds, 4.5, 2.0 net package at 0823:06ET