• EURGBP is expected to test the 0.8700 cushion amid escalating Russia-Poland tensions.
• The speech from ECB Lagarde will dictate the likely monetary policy action ahead.
• Bifurcation of tax hikes and spending cuts to cover a debt of GBP 60bln in the Autumn Statement will be keenly watched.

The EURGBP pair has turned back-and-forth in a 0.8720-0.8740 range in early Tokyo after a perpendicular decline from the round-level resistance of 0.8800. The cross is expected to resume its downside journey and may find an intermediate cushion around 0.8700 amid escalating geopolitical tensions.

The sentiment of Eurozone investors has been dented as Russia expanded its military activity to NATO-member Poland after crippling Ukraine. Investors need fresh impetus for further action and the outcome of the NATO ambassadors meeting called by Poland will provide the same. Further escalation in geopolitical tensions may accelerate supply chain disruptions in the trading bloc.

Apart from that, the speech from European Central Bank (ECB) President Christine Lagarde will remain in focus. ECB President is expected to provide cues about the likely monetary policy action ahead. Also, guidance on inflationary pressures will be of utmost importance.

On the UK front, the release of the inflation data and dictation of the first Autumn Statement under the leadership of Prime Minister Rishi Sunak and Chancellor Jeremy Hunt will be of utmost importance.

The headline Consumer Price Index (CPI) is seen extremely higher at 10.7% vs. the prior release of 10.1%. While the core CPI that excludes oil and food prices may decline marginally to 6.4% against the former release of 6.5%.

For Autumn Budget, investors will focus on the bifurcation of tax hikes and spending cuts to meet the GBP 60bln fiscal hole. Treasury sources told Sky News the financial "black hole" could be as large as £60bn - which may require up to £35bn of spending cuts and an extra £25bn raised through taxation. Also, cap figure for energy bills will be of significant importance.