With numerous upcoming events, let's first examine the developments from the last 24 hours and how they set the stage for today. The European PMIs had little effect on the markets, though the specifics were somewhat weaker. The key focus was on the NFPs, which managed to please various stakeholders. October saw payrolls decrease by 105, primarily due to significant voluntary cuts by the Federal government, while November slightly exceeded expectations, and private payrolls reported solid job growth. The unemployment rate ticked up, but participation rate improved, though wage growth remained tepid. Retail sales saw a decline of 0.1%, even as the control group outperformed by 0.4 percentage points, coupled with soft PMI data. Nothing in these figures would sway the FED's current perspective, with January pricing staying stable at 6bps. Despite high expectations, the USD ended the London trading session flat, even amidst robust demand from hedge funds and real-money investors. While frustrating, overnight developments have revitalized the markets. The failure of EURUSD to surpass 1.1800 was disappointing, leading me to take profits on some long positions. Additionally, remarks from the Trump administration about potential retaliation against EU companies over the digital tax further pressured the euro.

An overnight Kyodo report indicating that Japan's 2026 government budget will exceed YEN120 trillion, surpassing estimates, caused USDYEN to rebound 100 points from the low, which I welcomed after purchasing some USDYEN in the 154 range ahead of the BOJ meeting on Friday. GBP inflation came in softer than predicted, resulting in a sell-off of GBP and nearly confirming an anticipated rate cut from the BOE tomorrow. I found the movement above 12.00 in EURNOK excessive, leading me to sell the cross, which continued to decline following a rebound in oil prices due to Trump's decision to blockade sanctioned oil tankers in Venezuela, though this effect may be temporary. After the inflation release, I sold some GBP and we've been waiting for a chance to re-enter, with the BOE's forward guidance tomorrow anticipated to be significant. Recent overnight events have enabled USD to perform well, yet I still plan to hold a short position—except against YEN. The attention now shifts to tomorrow's US inflation report for further support of this stance. I remain short on EURSEK, and for those of you who know the rationale, you understand why. Lastly, we have Fed speakers today, with Waller being particularly noteworthy.