President-elect Trump has issued a threat to impose a 25% tariff on all Mexican and Canadian goods and an additional 10% tariff on Chinese goods, as one of his first executive orders. FX markets saw sharp knee-jerk reactions lower though CAD, CNH and MXN have recovered slightly from session lows. JPY up 0.3% intraday though limited catalysts behind the move. Leveraged USD long stops drove EURUSD back above 1.05, ECB speak was looked through. US equity futures hold steady, while USTs are modestly weaker across the curve.
Keep a close eye on the labor market differential within US Conf Board data at 10:00 EST which saw a surprise uptick last month, headline should remain strong. New Home Sales printing simultaneously is expected to contract MoM reflecting higher mortgage rates. FOMC minutes (14:00 EST) could arguably be stale given the focus on incoming data. In EM, BRL IBGE Inflation at 07:00 will be important for Dec Copom expectations.