POWER: Swiss Hydro Stocks Widen Deficit to Five-Year Average

• USDJPY extended overnight gains through the European open, briefly printing 156.43, but stalling ahead of 156.58 resistance, the November 28 high. While interest rate correlations have been weaker in recent months, this week's corrective strength has been underpinned by hawkish repricing across core FI markets. A subsequent 30 pip fade off highs coincided with a downtick in the US 10y yield, followed by a Ueda interview which does little to dispel BOJ hiking expectations for December.
• AUD outperforms in the aftermath of the RBA, with the latest downtick for the DXY propelling AUDUSD back towards session highs. 0.6650 has continued to hold across the last three sessions, and a break above would likely prompt some momentum demand. Alongside the RBA’s expected hold at 3.6%, the board sees the balance of risks tilted toward a potential rate hike in 2026 to contain inflation, with cuts firmly off the table, according to Governor Bullock. 0.6707 remains the key AUDUSD resistance, the Sep 17 high.
• It is worth highlighting that NZDUSD has traded all the way back to its medium-term pivot at 0.5800, potentially providing an opportunity to re-establish longs in AUDNZD, which has been in a very strong uptrend across the second half of 2025. The cross has remained well supported by the 50-day EMA, intersecting around the 1.14 mark.
• Ahead of the AUD, the Swedish Krona tops the G10 leaderboard amid the stable risk backdrop Tuesday. Recent domestic data has suggested an economic recovery is taking hold in Sweden, helping EURSEK narrow the gap to support at 10.8815.
• BOE Deputy Governors Lombardelli and Ramsden, and external rate-setters Mann and Dhingra speak at Parliament's Treasury Committee later today. The data calendar sees the US weekly ADP release, NFIB small business index, weekly redbook retail sales, and JOLTS job openings ahead of tomorrow's FOMC.

TYG6 112/111 put spread vs. 114 calls paper paid 0-06 on 10K for the put spread.