Forexlive European FX news wrap: Treasury yields extend the gains

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• ING says an October ECB cut is not guaranteed
• All eyes on Chinese equities after last week’s bank holidays
• US 10-year treasury yields back above 4%
• Risk is trading mostly cautious so far across major asset classes
• Eurozone retail sales YY 0.8% vs 1.0% expected
• Reserve Bank of India Urges Banks to Avoid Large Short Bets as Rupee Nears Record Low
• Euro Zone Investor Morale Rebounds in October Amid Rising Expectations
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• Weekly update on interest rate expectations
• Japanese firms anticipate prolonged China slowdown, BoJ official reveals
• Goldman Sachs Slashes US Recession Odds Following Strong Jobs Report
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• German retail sector faces economic uncertainty, no growth in consumer spending expected
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• UK House Prices Rise in September, Beating Expectations Actual: 0.3% Expected: 0.2%
• German Factory Orders Plunge in August -5.8% Expected: -1.9% Previous: 2.9%
• BOJ Report: Price Hikes and Wage Increases Spreading Across Japan
• Japan’s Leading Index Falls Short of Expectations in August Report

It’s been a a quiet session in terms of data releases with the Eurozone retail sales being the only highlight. The data came in better than expected but the market ignored the release.

The most notable movers in the markets have been Treasury yields and crude oil. Regarding the former, the market priced out all the agressive rate cuts expectations and it’s now even leaning on a more hawkish side compared to the Fed’s projections. Speaking of the latter, the tensions in the Middle East remain high and that’s been supporting the price alongside a better macro outlook.

In the FX space, we are seeing a bit of a pullback in the US Dollar given that the market has already priced out the rate cuts. Looking forward, it’s now about the US CPI on Thursday as a hot report could see the market pricing in a pause for the Fed and give the greenback an extra boost.

In the American session, we have some Fedspeak. All of the scheduled speakers are known hawks, so some hawkish comments after the NFP report shouldn’t be surprising.

This article was written by Giuseppe Dellamotta at www.forexlive.com.