EU CREDIT SUPPLY: BMW: FRN Priced

• The softer dollar backdrop has been prevailing on Tuesday, prompting the DXY to extend this week’s decline to 0.7% and notably return to last week’s lows at 97.87. The likes of AUD and NZD continue to be well supported by positive equity sentiment, while USDCAD has also gathered downside momentum this morning.
• A break of multiple daily lows at 1.3727 is noteworthy, placing USDCAD at the lowest level since late July as we now press below 1.3700. Overall, USDCAD has now extended its 1-month selloff to around 3%, with the breach of the bull channel in early December exacerbating declines.
• Notably, spot is also testing below another trendline support this morning, drawn from the June 16 low. A daily close below this mark would further bolster the bearish conditions in place for the pair. A small retracement support is seen at 1.3682, however, more notable targets for the move are located at 1.3637 (July 25 low) and 1.3540 (June 16 low).
• GDP data from both the US and Canada should keep the focus on USDCAD later today. As a reminder, Canada's economy rebounded much faster than expected in Q3 led by a drop in imports. However, a contraction in October's flash GDP suggested weakness ahead – whether this manifests or not could be an important driver for CAD heading into year-end.

• In FX, the trend in EURUSD remains bullish and this week’s rally so far, highlights the end of the recent corrective pullback. The first important support lies at 1.1683, the 20-day EMA. A clear breach of this average would signal scope for a deeper retracement, allowing an overbought condition to unwind. Key short-term resistance has been defined at 1.1804, the Dec 16 high. Clearance of this hurdle would confirm a resumption of the uptrend and open 1.1848, the Sep 18 high.
• The trend condition in GBPUSD remains bullish and this week’s strong start reinforces current conditions. The pair has traded to a fresh short-term cycle high, confirming a resumption of the uptrend that started early November. Note that moving average studies have recently crossed and are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.3527, the Oct 1 high. Initial firm support is 1.3306, the 50-day EMA.
• The trend structure in USDJPY is bullish and the latest pullback is considered corrective - for now. Note that MA studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 157.89, the Nov 20 high and a bull trigger. A break of this hurdle would confirm a resumption of the uptrend. Support to watch lies at 154.40, the 50-day EMA. A clear breach of it would undermine the bull theme and signal scope for a deeper corrective pullback.

OI data points to net short setting dominating as Tsy futures ticked lower on Monday, with that theme only interrupted by very modest net long cover in FV futures.

• The biggest net positioning swing (in both outright and DV01 terms) came in TU futures.
• Nearly $6mln DV01 of fresh net short exposure was added in that contract over Friday & Monday.