- Do keep a watchful eye on EUR/CHF
- Gold drops amid yet another volatility spike, profit-taking
- Heads up: ECB president Lagarde to speak later today
- What are the main challenges for Japan’s first female prime minister Takaichi?
- Japan’s Nippon Ishin co-head Fujita says this is a genuine conservative reform government
- What are the main events for today?
- Switzerland September trade balance CHF 4.07 billion vs CHF 4.10 billion prior
- FX option expiries for 21 October 10am New York cut
- Japanese yen falls as Takaichi wins key vote to become next prime minister
- Sanae Takaichi wins Japan lower house vote, set to become first female prime minister
- In this market, just “buy shiny stuff” – SocGen
- Waiting on that TACO moment
- Standard Chartered lifts its China’s 2025 GDP forecast to 4.9% (from 4.8%)
It’s been an empty session in terms of data releases and newsflow. Nevertheless, we saw some interesting moves across markets.
The Japanese Yen weakened across the board as Sanae Takaichi became the first female Prime Minister. Recall, she’s a fiscal dove, so the market expects dovish policies ahead and a delay in BoJ rate hikes.
We have also seen a pullback in precious metals with silver falling by more than 5% at some point. There was no catalyst for the move, so it might have been just usual profit-taking. Given the parabolic surge of the last months, aggressive pullbacks could become the normal, unless we finally get a bearish catalyst to trigger an even bigger correction.
In the FX market, the US dollar remains a tad stronger but overall the performance has been mixed. Bitcoin is down more than 2% on the day with the crypto market diverging from the equity market despite the positive risk sentiment. US Treasury yields pulled back a bit but remain above Friday’s lows.
In the American session, the main highlight will be the Canadian CPI report. The CPI Y/Y is expected at 2.3% vs 1.9% prior, while the M/M figure is seen at 0.0% vs -0.1% prior. The underlying inflation measure, the CPI Trimmed Mean Y/Y, is expected at 3.0% vs 3.0% prior (it’s been hovering around 3% since February 2025).
BoC Governor Macklem spoke last week and he delivered a couple of dovish comments that suggested a rate cut in October was coming no matter what. The market increased the probabilities from 68% to 86% now. By the end of 2026 the market expects one more rate cut bringing the terminal rate to 2.00%, which would be below the lower bound of the BoC’s estimated neutral range (2.25%-3.25%).
This article was written by Giuseppe Dellamotta at investinglive.com.