STIR: RONIA picked up to 4.13% yesterday

SX5E (17th July) 5200/4650ps 1x2, bought for 2.7 in ~8.9k.

SX7E (21st Nov) 245c x1 vs (19th Dec) 265c x1.5, suggest sold the Nov at 3.225 in 13k (13k x 19.5k).

• Despite the recovery for the greenback overnight which has prompted a ~30pip move higher for the USD index, USDCAD has largely shrugged off the move, actually trading lower on the session and consolidating close to recent lows around the 1.40 mark.
• As a reminder, USDCAD came under firm pressure last Friday following the above-consensus employment data. The pair notably fell back below the prior breakout level at 1.4080, and the subsequent extension lower has seen USDCAD move further away from strong touted resistance, the top of a bull channel, drawn from the July 23 low.
• Having highlighted this area as a key obstacle to further USDCAD strength, price has subsequently failed there on two occasions, bolstering the potential of a short-term bearish signal. Indeed, this week’s consolidation just above 1.40 highlights this bearish threat.
• The immediate focus will be on the 50-day EMA, which we have not closed below since September. The average intersects at 1.3957. Below here, key support is at 1.3888, the Oct 29 low, a level that would coincide with the bottom of said bull channel.
• Canada Oct CPI data is due next Monday, the final inflation data before the Dec 10 BOC meeting. Importantly, the jobs data showed gains even in areas thought to be hit hardest by U.S. tariffs, suggesting the central bank will be more comfortable with its view interest rates are low enough to support the economy and keep inflation on target.