Based on yesterday’s price action, we reiterate our view that the USD’s rebound is getting tired and probably requires some hawkish repricing to keep going. As discussed over the week, we don’t think tomorrow’s US CPI will offer that opportunity as we expect a consensus 0.3% MoM core print. But surely with 50bp of easing fully priced in by year-end, any hot print could offer good support to the US Dollar (USD), ING's commodity experts Ewa Manthey and Warren Patterson note.

Ultimate impact on Russian Oil flows might be limited

"FX volatility remains quite subdued in general, and well below the average of the past 12 months. This remains a good environment for carry trades, and the yen’s funding appeal could delay the recovery in spot despite markets looking more relaxed about Japan’s domestic story."

"On geopolitical news, Trump has denied reports that the US will allow Ukraine to use long-range missiles, just as the US has announced new sanctions on Russia, including on oil producers Rosneft and Lukoil, which produce more than 5m barrels per day. Oil prices have rallied around 4% on the news, but the move has merely unwound October’s losses so far, and we’d likely need to see Brent heading to 70$ to result in tangible support for USD."

"The key question at this stage is whether sanctions effectively reduce Russian oil flows (primarily to India). Back in January, oil markets overreacted to similar news, but the ultimate impact on Russian flows was limited. So it's probably too early to conclude whether these sanctions are enough to shift the range structurally higher for oil prices."