FREIGHT: Shadow Fleet Could Face Oversupply of VLCCs: Kpler

• US Data/Speaker Calendar (prior, estimate). All times ET
• 12/17 0700 MBA Mortgage Applications (4.8%, --)
• 12/17 0815 Fed Gov Waller economic outlook (no text, Q&A)
• 12/17 0830 Chicago Fed CARTS Retail Indicator
• 12/17 0900 Manheim Used Vehicle Prices
• 12/17 0905 NY Fed Williams opening remarks FX conf, livestreamed
• 12/17 1130 US Tsy $69B 17W bill auction
• 12/17 1230 Atlanta Fed Bostic moderated discussion (no text)
• 12/17 1300 US Tsy $13B 20Y Bond re-open (912810UQ9)
• Source: Bloomberg Finance L.P. / MNI

Tuesday's Europe rates/bond options flow included:

• RXG6 126.50/124.50ps, bought for 27.5 in 6k
• ERM6 97.87/97.81ps vs 98.00/98.06cs, bought the ps for flat in 7.5k
• SFIZ6 96.90/97.00cs vs 96.30/96.20ps, bought the cs for half in 3k

• The long-awaited release of the latest US employment report painted a mixed picture of the US labour market, prompting a volatile session for the US dollar. Despite the higher-than-expected headline NFP change of +64k, the -105k adjustment in October certainly dampened the release, while the above consensus unemployment rate at 4.564% contributed to an immediate extension lower for the US dollar.
• This resulted in the dollar index printing fresh pullback lows at 97.87, the lowest level since October 03. However, the slightly messy release and associated uncertainty surrounding DOGE deferred resignations made the initial greenback pessimism short-lived. Indeed, with the heavy central bank calendar ahead and US inflation data due Thursday, momentum quickly stalled and two-way price action within a relatively contained range persisted across the US session.
• With that said, the DXY is holding 0.3% declines on the session as we approach the APAC crossover and GBP has maintained its position at the top of the G10 leaderboard, rising 0.45% to 1.3435.
• Price action was assisted by a strong set of labour market figures in the UK, with firmer-than-expected wage data denting prospects of easy policy through 2026. Cable bridged the gap to 1.3452, the 61.8% retracement of the Sep 17 - Nov 4 bear leg, and clearance of this hurdle would strengthen a bull theme and open 1.3527, the Oct 1 high. UK inflation data is scheduled tomorrow before Thursday’s BOE decision.
• USDJPY has also tracked lower, initially dented overnight by souring equity sentiment across the APAC session, and the overall adjustment lower for US yields confirming the negative bias for the pair. Lows today came within 5 pips of the December 05 low at 154.35, and also narrow the gap to the key 50-day EMA located just above the 154 handle. A clear breach of this average would undermine the bull theme and signal scope for a deeper retracement.
• Elsewhere, EURUSD had a very brief test above 1.1800 before settling closer to 1.1775. US inflation and the ECB decision/press conference will keep the pair in focus as the week progresses. Above here, 1.1848 is a notable chart point, the Sep 18 high.