A turnaround in equity markets during the course of yesterday’s session, as they erased most of their initial losses, also saw the dollar retreat from its best levels of the day. Comments from Fed Chair Jerome Powell, which left the door open to another cut in US interest rates at the end of this month, also weighed a little on the currency. EURUSD is trading back above the $1.16 level this morning, at around $1.1640, off lows yesterday of just under $1.1550, while GBPUSD has rebounded by more than a cent from its lows to trade at about $1.3350. EURGBP is little changed as it continues to hover around the £0.87 mark.
Yesterday’s Events
In government bond markets, UK yields fell by 5-7bps across the curve following softer than expected labour market data, while French 10-year yields ended about 8bps lower on the back of some grounds for optimism regarding the survival of the newly installed government. Elsewhere, both US and German yields were marginally lower on the day. In equity markets, European stocks closed down 0.3%, having been off almost 1.5% during the day’s session, while the S&P 500 in the US closed just slightly lower as well having been down more than 1% at one stage.
In his latest comments, Fed Chair Powell said “based on the data that we do have, it is fair to say that the outlook for employment and inflation does not appear to have changed much since our September meeting four weeks ago.”. He noted that recent “goods price increases primarily reflect tariffs rather than broader inflationary pressures,” while “downside risks to employment appear to have risen”. Concern about increased risks to employment means it’s likely the Fed will cut rates again at its meeting later this month (28th-29th).
The IMF expects the Fed to cut rates by another 50bps to 3.5-3.75% by the end of this year according to its updated forecasts, and to 2.75-3.0% by around the end of 2028, even as it revised up slightly its projections for GDP growth this year and next year, to 2.0% and 2.1% respectively. For the Euro area, the IMF expects growth of 1.2% this year (up from 0.9% in 2024) and 1% in 2026, with the ECB expected to keep the deposit rate “steady at 2%.”
The Day Ahead
It is another quiet day ahead on the economic data front. Industrial production is due in the Euro area, while in the US the Fed publishes its latest Beige Book, which as Powell said yesterday provides “valuable insights” into how the US economy is doing. There are a number of Fed/ECB/BoE members scheduled to speak over the course of the day.
Today's Talking Points 15.10.2025
Market Commentary
A turnaround in equity markets during the course of yesterday’s session, as they erased most of their initial losses, also saw the dollar retreat from its best levels of the day. Comments from Fed Chair Jerome Powell, which left the door open to another cut in US interest rates at the end of this month, also weighed a little on the currency. EURUSD is trading back above the $1.16 level this morning, at around $1.1640, off lows yesterday of just under $1.1550, while GBPUSD has rebounded by more than a cent from its lows to trade at about $1.3350. EURGBP is little changed as it continues to hover around the £0.87 mark.
Yesterday’s Events
In government bond markets, UK yields fell by 5-7bps across the curve following softer than expected labour market data, while French 10-year yields ended about 8bps lower on the back of some grounds for optimism regarding the survival of the newly installed government. Elsewhere, both US and German yields were marginally lower on the day. In equity markets, European stocks closed down 0.3%, having been off almost 1.5% during the day’s session, while the S&P 500 in the US closed just slightly lower as well having been down more than 1% at one stage.
In his latest comments, Fed Chair Powell said “based on the data that we do have, it is fair to say that the outlook for employment and inflation does not appear to have changed much since our September meeting four weeks ago.”. He noted that recent “goods price increases primarily reflect tariffs rather than broader inflationary pressures,” while “downside risks to employment appear to have risen”. Concern about increased risks to employment means it’s likely the Fed will cut rates again at its meeting later this month (28th-29th).
The IMF expects the Fed to cut rates by another 50bps to 3.5-3.75% by the end of this year according to its updated forecasts, and to 2.75-3.0% by around the end of 2028, even as it revised up slightly its projections for GDP growth this year and next year, to 2.0% and 2.1% respectively. For the Euro area, the IMF expects growth of 1.2% this year (up from 0.9% in 2024) and 1% in 2026, with the ECB expected to keep the deposit rate “steady at 2%.”
The Day Ahead
It is another quiet day ahead on the economic data front. Industrial production is due in the Euro area, while in the US the Fed publishes its latest Beige Book, which as Powell said yesterday provides “valuable insights” into how the US economy is doing. There are a number of Fed/ECB/BoE members scheduled to speak over the course of the day.
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