The USD is lower to start the US session. In the video above I take a look at the 3 major currency pairs – the EURUSD, the USDJPY and the GBPUSD. What is driving the technicals for those three major currency pairs.
Yesterday
On inflation and tariffs:
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Powell warned that the slow pass-through of tariffs could start to resemble persistent inflation, creating a challenge for policy calibration.
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He emphasized that while inflation has moderated, the Fed must avoid easing too quickly, which could leave “the inflation job unfinished.”
On the labor market and employment
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The labor market shows significant downside risks, with clear signs of softening since July.
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Powell noted the breakeven rate of job growth (the pace needed to keep unemployment stable) has fallen substantially, possibly even turning negative, given a ±50K margin of error.
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Despite this, the unemployment rate’s stability is remarkable, reflecting labor-market resilience even amid slower hiring.
On the Policy approach.
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As risks evolve, Powell said the Fed’s stance needs to move toward a more neutral position, balancing inflation and employment mandates.
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He underscored that policy operates with long and variable lags, and recent research shows these lags are lengthening for both inflation and jobs.
The comments were dovish enough to keep the expectations for a rate cut in November and December intact.
The earnings today continued to show the financials doing well. Morgna Stanley and Bank of America, both beat expectations on the top and bottom lines Abbott Laboratories met expectations. Below are the results.
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Abbott Laboratories (ABT) Q3 2025 (USD): EPS $1.30 (MET; exp. $1.30), Revenue $11.4B (MET; exp. $11.42B). FY adj. EPS view $5.12–$5.18 (exp. $5.15).
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Morgan Stanley (MS) Q3 2025 (USD): EPS $2.80 (BEAT; exp. $2.09), Revenue $18.22B (BEAT; exp. $16.71B).
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Bank of America (BAC) Q3 2025 (USD): EPS $1.06 (BEAT; exp. $0.95), Revenue $28.1B (BEAT; exp. $27.38B).
The major US indices are higher after a mixed session yesterday saw the Dow higher but the S&P and Nasdaq moving lower (with the Nasdaq the biggest loser at -0.76%). A snapshot of major indices shows:
- Dow industrial average up 239.54 points
- S&P index up 44.11 points
- NASDAQ index up 210.43 points
The US debt market is little changed to start the US session:
- 2-year yield 3.478%, -0 point basis points
- 5 year yield 3.602% unchanged
- 10 year yield 4.016%, -0 point basis points
- 30 year yield 4.613%, -1.0 basis points
Today, we do get and economic releases in the form of the NY Manufacturing Index for October. The expectations is for -1.4 versus -8.7 last month.We will also get the Canada manufacturing sales data for August with expectations of -1.5 versus +2.5 last month. The wholesale trade for Canada is expected at -1.3 versus 1.2 last month.
