AUDUSD TECHS: Bearish Trend Structure

European Equities will be set for a positive open, futures have also reversed some of Yesterday's price action, they sold off, as Govies rallied on FTQ.

VGZ4 is still short of where it was trading at pre sell off was at 4810.00, while Yesterday's high stands at 4821.00.

The early focus will likely be on the FTSE following the UK CPI Beat an hour ago.

• Calls: Estox 50: +0.82%, Dax: +0.65%, CAC: +0.64%, FTSE +0.11%, SMI +0.66%.

Euribor futures are -0.5 to -3.5 ticks softer through the blues, tracking modest weakness in Bund futures this morning. 

• A Reuters source report suggesting President Putin is open to discussing a Ukraine ceasefire deal with Donald Trump weighed slightly on core FI earlier, which was followed by the firmer-than-expected UK CPI report.
• German PPI was in line with consensus on a monthly basis (0.2% M/M) and a tenth softer on an annual comparison at -1.1% Y/Y (vs -1.4% prior).
• ECB-dated OIS price 137.5bps of easing through the end of next year (vs 139bps at yesterday’s close), towards the hawkish end of this week’s range.
• There are 29bps of easing priced through the December ’24 meeting, with several ECB speakers leaning in favour of a 25bp cut in recent commentary.
• ECB’s Escriva is scheduled to speak at 0930GMT/1030CET, with de Guindos, Stournaras and Makhlouf due this evening (though we have already heard from the latter three this week).
• The ECB’s Q3 negotiated wages indicator is due at 1000GMT. 

The firmer-than-expected UK CPI data drives hawkish repricing in GBP STIRs.

• BoE-dated OIS now prices 1bp of cuts for next month, 17.5bp through February, 24.5bp through March, 43.5bp through June and 61.5bp through December '25.
• That compares to 2bp, 20bp, 28bp, 47bp and 67bp late yesterday.
• SONIA futures flat to -5.0, month-to-date lows intact across the strip.
• Today’s CPI data can be viewed as marginally higher than expected.
• We still don't see a near-term domestic macro driver that can really change the course of quarterly cuts across February and May.
• Following the Budget there is too much uncertainty stemming from the employer NIC increase and the NLW increase, which could keep inflation higher than BoE's forecasts for longer.
• Elsewhere, the latest report from the Resolution Foundation pointed to a healthier labour market than statistics from the ONS suggest, providing another background driver for the early hawkish price action.
• Comments from BoE’s Ramsden (16:00 London) headline the UK calendar today.