FOREX: FX OPTION EXPIRY - Large in the EUR Thursday

NOK moves to the top of the G10 leaderboard. No obvious headline trigger for the move but it comes alongside a fresh extension higher for oil and equity futures. NOKSEK is now up 0.5% on the session to 0.9490, its highest since July 7. However, a move beyond the July 3 high at 0.9542 is required to reinstate a bullish theme. 

• Initial support is the July 7 low at 0.9377, clearance of which would expose the June 26 low at 0.9329.
• A reminder that Norwegian June inflation was slightly higher than expected last week, but was still consistent with expectations for a quarterly pace of Norges Bank cuts continuing in September, in our view.
• This week’s Norwegian data calendar is essentially empty, leaving focus on cross-asset dynamics to dictate NOK rates and FX.
• A reminder that NOK liquidity tends to dry up in the summer months with many participants on holiday, which can exacerbate intraday volatility. 

As noted elsewhere, little in the way of definitive explainers when it comes to the recent cross-asset moves (DXY off highs and equities off lows), with some perhaps eying the potential for U.S. President Trump to moderate his latest tariff threats against both the EU & Mexico via some form of last-minute deals.

• Crude oil futures also trade to fresh session highs, aided by the USD pullback. U.S. sanctions risk surrounding Russia also a potential driver here.

• EUR has shrugged off Trump's tariff pledge, signalling that a 30% levy was either the core expectation, or that markets see a decent chance of a short-term reprieve ahead of the August 1st White House deadline. EUR is mid-table, with EUR/JPY retaining the underlying bullish bias that's kept the RSI in overbought territory for much off the rally across July.
• This shifts near-term focus to any reciprocal pushback from Brussels, as well as the circulating reports that the EU are looking to work more closely with other tariff target nations, to help alleviate the impact on trade flows.
• Equity futures are edging higher through the European open, helping support AUD/NZD and putting the cross above the 200-dma for the first time since late March. This extends the winning streak in the cross to six consecutive sessions, shifting the upside target to 1.0975 - the 61.8% retracement of the downleg posted off the February high.
• Looking beyond today, tomorrow's CPI print will look to resolve the latent Fed pricing for the July meeting (currently a negligible 1.6bps of cuts priced), but we also see risks around the beginning of quarterly earnings season.
• Reporting kicks off in earnest tomorrow, with financials the usual early focus. 9.4% of the S&P 500 are set to report this week. Tariffs remain a key buzzword in corporate reports. Heavy industry including General Electric, Snap-On and 3M which be watched for possible impacts, Markets will be particularly focused on any signs of frontloading of corporate purchases, the rate at which firms will passthrough costs to the consumer, and the expected impacts of tariffs on the bottom-line for consumer staples.