SPAIN AUCTION RESULTS: 7/10/20-year Oblis

• The USD sits higher against most others in G10 early Tuesday, although price action is generally contained, despite moderately lower equities from the off.
• JPY is in focus on the confirmation for Takaichi as prime minister, with Katayama taking the finance minister role, reinforcing expectations for a fiscal phase prioritizing an Abenomics-like policy set. Resultantly, JPY is weaker against all others in G10, helping USD/JPY to make light work of Y151.50 and reverse a large part of last week's late weakness. Finance Minister Katayama stopped well short of any critique of the Bank of Japan, instead referring to the currency, which should: "move stably, reflecting fundamentals".
• The recovery from last Friday’s low in USDJPY is beginning to highlight a stronger bullish signal. The pair has found support below the 20-day EMA and note that Friday’s price pattern is a hammer candle formation. If correct, the pattern signals the end of a corrective pullback that started Oct 10, and highlights the fact that support at the 50-day EMA, at 148.94, remains intact. The bull trigger is at 153.27, the Oct 10 high.
• AUD, NZD naturally underperform as a function of cautious risk sentiment and lower equity markets today. AUDUSD continues to trade both sides of the 0.6500 handle, retaining the phase of consolidation. A breach of 0.6440, the Oct 14 low, would cancel any reversal signal and reinstate a bear threat.
• Three CPI prints, Canada scheduled for today, the UK for tomorrow, and the US for Friday, provide the highlights for this week, with the UK release standing out in particular as a downside surprise could bring the potential for a notable BoE repricing. Elsewhere, we watch for fiscal policy signals in Takaichi's press conference later today. A set of ECB speakers is expected to mostly reiterate previous "rates are in a good place" rhetoric, while the Fed remains inside the media blackout.

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