EUROPEAN FX UPDATE: USD outguns major peers, Cable fades CPI-induced upside

USD: DXY +0.4%; 106.57

• After three sessions of losses, DXY is notably higher as the USD out-muscles all peers alongside a pick-up in US yields. Fresh macro drivers are on the light-side so it is hard to pin much of a macro narrative on the price action. As a reminder, this week is a quiet one in terms of data and therefore focus is on geopolitics and Trump cabinet picks with markets still guessing over who will take the Treasury Secretary role. Fed's Barr, Cook, Bowman & Collins due to speak later.
• DXY is currently in touching distance of yesterday's 106.63 peak with the next major targets coming via the 107 mark and the YTD peak @ 107.06.

EUR: EUR/USD -0.3%; 1.0561

• EUR swept up by the broadly firmer USD with EUR/USD's brief foray above 1.06 overnight very much in the rear-view mirror. The latest EZ wage data saw a jump in Q3 to 5.42% from 3.54% but this had little follow-through for EUR. EUR/USD is currently holding above yesterday's low @ 1.0523.
• ECB's Lagarde and de Guindos due to speak later in the session. As it stands, markets price a 50bps December ECB cut at 23%.
• EUR/USD opex: 1.0500 (1bln), 1.0525-30 (821mln), 1.0540-50 (2.4bln) 1.0585 (814mln), 1.0620-25 (2bln), 1.0640-50 (925mln).

JPY: USD/JPY +0.7%; 155.67

• Yesterday's geopolitically-induced support for JPY has proved to be short-lived with USD/JPY resuming its trend seen since the US election. USD/JPY has printed a fresh WTD peak @ 155.84 with the next obvious target being last Friday's multi-month high @ 156.74. The higher the pair goes, the more forceful Japanese jawboning is likely to be.
• USD/JPY opex:154.00 (330mln), 154.75-82 (1bln), 155.00 (1bln), 156.00 (1bln).

GBP: GBP/USD -0.1%; 1.2672

• Cable vaulted higher in early trade following across-the-board hotter-than-forecast inflation metrics. GBP/USD rose from sub 1.27 levels to a peak of 1.2714. However, gains faded as the USD picked up across the board and Cable returned to a 1.26 handle. Note, the Y/Y services print was in-fitting with MPC forecasts.
• Pricing for a December cut pulled back to 15% from 22% with a full 25bps cut not priced until March 2025. Note, BoE's Ramsden due @ 16:00GMT.
• UK CPI YY (Oct) 2.3% vs. Exp. 2.2% (Prev. 1.7%), Core CPI YY (Oct) 3.3% vs. Exp. 3.1% (Prev. 3.2%), CPI Services YY (Oct) 5.0% vs. Exp. 4.90% (Prev. 4.90%)

Antipodeans: AUD/USD -0.3%; 0.6512. NZD/USD -0.4%; 0.5887.

• Both softer vs. the broadly stronger USD and trimming recent gains with fresh macro drivers on the light side. AUD/USD made a fresh WTD peak overnight @ 0.6544 before running out of steam and returning to levels closer to 0.65; yesterday's low sits @ 0.6481. Similar price action for NZD/USD after advancing as high as 0.5921 before slipping back onto a 0.58 handle.