There wasn’t a whole lot of movement in FX markets yesterday with the main currency pairs largely in consolidation mode, for now at least. The euro dipped to low of circa $1.15 against the dollar during the course of yesterday’s session but is back up to around $1.1530 this morning. Sterling is a touch weaker in response to comments from the UK Chancellor, Rachel Reeves, hitting the wires just now, slipping to around $1.31 against the dollar and to circa £0.88 against the euro.
Yesterday’s Events
Government bond yields are edging lower this morning amid weakness in equity markets, with yields down a couple of basis points in the main markets. Asian stocks were generally in the red overnight (the Nikkei in Japan was off almost 2%) and European markets are down more than 1% at the open this morning, while the futures market points to a decline in US stocks later today as well, with concerns about rich tech valuations and uncertainty about Fed interest rate policy cited as the reasons for the wobble.
Manufacturing activity in the US contracted for an eight month in a row in October according to the latest ISM survey, with the headline index falling to 48.7 from 49.1 in September. Output and new orders contracted again last month, albeit at a slower pace than in September, while manufacturers’ input cost rose again, although also more slowly than in September.
Fed Governor Cook believes “downside risks to employment are greater than the upside risks to inflation” and sees the current level of interest rates as still “modestly restrictive”. She also says “every meeting, including Decembers’s, is a live meeting,” suggesting she at least is open another cut in rates next month.
The Day Ahead
It is very quiet on the economic data front today, not helped of course by the government shutdown in the US, with little or nothing of note due for release. There are a large number of ECB members scheduled to speak over the course of the day.
Author: Laura Casey
Tel: 1800 30 30 03 / +353 (0)1 790 0000
3 Nov 2025
Today's Talking Points 03.11.2025
Market Commentary
The euro and sterling both lost ground against the dollar last week, shedding around one and two cents respectively (and two and three cents respectively for the month of October), most of this clocked up following Wednesday’s more hawkish than expected Fed meeting. The single currency (at $1.1530) is trading at the bottom end of the $1.15 to $1.18 range that has prevailed over the second half of 2025 to date (save for very brief forays down to $1.14 and up to $1.19), while sterling is trading at its lowest level ($1.3130) against the US currency since April and near year to date lows (£0.8780) against the euro. It is a potentially significant week ahead for the pound, with the Bank of England MPC due to announce its latest interest rate decision on Thursday. While the market is pricing in only about a 25% chance of a reduction in rates, softer than expected inflation and wage data recently could see a sizeable minority of the nine MPC members vote in favour of a cut. This could boost market expectations for a reduction in rates at the December meeting, which in turn could weigh on sterling.
Yesterday’s Events
US government bond yields edged down on Friday but still ended around 10bps higher on the week, while German and UK yields were flat and marginally lower respectively on the week. In equity markets, the Nasdaq in the US advanced by 0.6% on Friday to bring its gains for the month of October to almost 5%, while the S&P 500 gained 0.3% on the day and more than 2% on the month. European stocks ended lower on Friday but still gained around 2.5% in October.
The differing views among Fed members regarding the outlook for the US economy, which has made a cut in interest rates at the December meeting ‘far from assured’ according to Fed Chair Jerome Powell, were on full public display on Friday. While some said continuing downside risks to employment warrant another reduction in rates next month, others said still solid economic growth and upside risks to inflation argue for keeping rates on hold. The market, for its part, is pricing in about a 65% chance of a 25bps cut in December.
Headline inflation in the Euro area dipped to 2.1% in October (from 2.2% in September) according to Friday’s ‘flash’ reading, in line with the consensus forecast. Core inflation was a touch higher than expected at 2.4%, unchanged from September, with a second consecutive increase in services inflation (to 3.4% from 3.2% in September and its 2025 to date low of 3.1% in August) offsetting a decline in goods inflation (to 0.6% from 0.8%).
The Day Ahead
As well as the Bank of England interest rate decision on Thursday, economic data due include the ISM manufacturing and services surveys in the US today and Wednesday respectively, which should garner more attention than usual given the government shutdown-related absence of official data. The University of Michigan consumer confidence survey for November is also due in the US, on Friday, while Euro area retail sales are scheduled for Thursday.
Author: Laura Casey
Tel: 1800 30 30 03 / +353 (0)1 790 0000
31 Oct 2025
Today's Talking Points 31.10.2025
Market Commentary
While the ECB kept interest rates unchanged at 2% yesterday as widely expected, it was the continuing fallout from Wednesday’s more hawkish than expected Fed meeting – which dampened rate cut expectations and boosted the dollar – that drove the price action in FX markets. The euro and sterling fell to fresh post-meeting lows against the US currency during the course of yesterday’s session, of circa $1.1550 and $1.3120 respectively (the latter also the lowest level for GBPUSD since April), and both are only marginally firmer this morning, at about $1.1565 and $1.3140 respectively. EURGBP is little changed from yesterday morning at around £0.88.
Yesterday’s Events
US government bond yields were largely unchanged yesterday, after increasing sharply on Wednesday post the Fed meeting, while German and UK yields inched up a couple of basis points. In equity markets, US stocks sold off, led by the Nasdaq which shed around 1.6% (with the S&P 500 off around 1%), though the futures market point to a rebound at the open later today, while European stocks ended marginally lower.
To nobody’s surprise, the ECB stayed on hold at yesterday’s meeting. It said the Euro area economy has continued to grow despite the challenging global environment, inflation remains close to the 2% target, and the “Governing Council’s assessment of the inflation outlook is broadly unchanged,” while reiterating that it will “continue to follow a meeting-by-meeting approach” to determining the appropriate level of interest rates. The market expects rates to remain unchanged through the end of this year and into 2026.
GDP growth in the Euro area picked up to 0.2% q-o-q in Q3, from 0.1% in Q2, according to the flash ‘reading, slightly ahead of both the consensus forecast (+0.1%) and the ECB’s September projection (0.0%). Recent indicator data, including the October PMIs, point to a similar pace of growth in Q4. In yesterday’s post-meeting statement, the ECB noted that “the EU-US trade deal reached over the summer, the recently-announced ceasefire in the Middle East, and progress in the US-China trade negotiations have mitigated some of the downside risks to economic growth” in the zone, while “the robust labour market, solid private sector balance sheets and past interest rate cuts remain important sources” of support for the economy.
Business confidence in the UK rebounded this month according to the Lloyds Bank Business Barometer published earlier this morning, having declined sharply in September, with sentiment improving “across several regions and sectors.” Separately, house prices rose by 0.3% (seasonally adjusted) in October according to the Nationwide index, after rising 0.5% in September, pushing up the increase over the year to October to 2.4% (from 2.2% in September).
The Day Ahead
It is quiet for the remainder of the day in terms of economic data. A ‘flash’ CPI reading for October is due in the Euro area, with headline and core inflation expected to have nudged down to 2.1% and 2.3% respectively (from 2.2% and 2.4% in September) according to the consensus forecast. The ECB publishes it latest Survey of Professional Forecasters.
Author: Laura Casey
Tel: 1800 30 30 03 / +353 (0)1 790 0000
30 Oct 2025
Today's Talking Points 30.10.2025
Market Commentary
The Fed cut interest rates by 25bps to 3.75%-4% following yesterday’s meeting, as widely expected. However, Fed Chair Powell caused a stir in markets when he said at the post-meeting conference that “a further reduction at the December meeting is not a foregone conclusion, far from it.” Given that another 25bps cut in December had been almost fully priced in by the market, expectations for such a move were immediately lowered with a resulting spike in US government bond yields. The dollar strengthened initially as well, though it has since given back some of its gains. This sees EURUSD trading at around $1.1610 this morning, off its immediate post-meeting lows of about $1.1580, while GBPUSD is hovering around the $1.32 level, up from its lows of circa $1.3140. EURGBP is little changed, trading at £0.88. Today’s ECB meeting shouldn’t contain any surprises, with the central bank set to again keep the deposit rate on hold at 2%.
Yesterday’s Events
US government bond yields rose sharply as the market pared back the chances of a Fed rate cut at the December meeting (now around 65%), ending the day around 10bps higher across the curve, while German and UK have opened a touch higher this morning. US stocks gave up ground following the Fed meeting, ending flat on the day in the case of the S&P 500 and modestly higher (+0.5%) in the case of the Nasdaq. Earnings reports from some of the Big Tech companies elicited a mixed response in after-hours trading, while Trump’s “amazing” meeting with his Chinese counterpart – which saw the tariff truce between the two sides extended for a year, as well as a reduction in fentanyl-related tariffs on China (to 10% from 20%) – is having little impact on markets this morning.
The 25bps cut in US interest rates at yesterday’s meeting brings the cumulative reduction since September 2024 to 150bps. Regarding the Fed’s next meeting in December, Powell said “in the Committee’s discussions, there were strongly differing views about how to proceed in December (with) a further reduction in the policy rate not a forgone conclusion – far from it.”, adding that “we’re going to be looking at the data that we have and how that affects the outlook and the balance of risks” (and ultimately its decision on interest rates).
The Day Ahead
The focus today will be on the ECB’s latest interest rate announcement. With the Euro area economy expanding at a modest pace, inflation running close to the 2% target, and the deposit rate in neutral territory, the ECB is set to sit on its hands again and keep policy unchanged. The market also expects the deposit rate to remain on hold at 2% through the end of this year and into 2026, although it continues to price in some chance of one final 25bps cut in the current cycle. Meanwhile, there are a number of Euro area economic data releases scheduled for today, including the October Economic Sentiment Indicator; a ‘flash’ GDP reading for Q3, and the unemployment rate for August.
Author: Laura Casey
Tel: 1800 30 30 03 / +353 (0)1 790 0000
29 Oct 2025
Today's Talking Points 29.10.2025
Market Commentary
Sterling lost ground against both the euro and the dollar during yesterday’s session, which seemed to be related to an FT report suggesting the Chancellor of the Exchequer is facing a larger than expected ‘black hole’ in the UK public finances ahead of her budget next month. The pound is trading at a new 2025 low of £0.88 against the single currency this morning, and is down more than a cent against the dollar from yesterday morning at $1.3220. EURUSD is off yesterday’s best levels (of circa $1.1670) ahead of the Fed’s interest rate decision later today, trading at about $1.1630.
Yesterday’s Events
UK government borrowing costs were unaffected by the FT report with 10-year bond yields ending marginally lower on the day, while German and UK yields were little changed overall. In equity markets, the main US indices advanced again, led by the Nasdaq which gained around 0.8%, while European stocks were flat. Today sees the start of earnings results from some of the Big Tech companies.
Consumer confidence in the US fell for a third month in a row in October according to the Conference Board’s latest survey. Consumers’ assessment of current business and labour market conditions improved slightly this month, but the expectations index – based on consumers’ short-term outlook for income, business, and labour market conditions – fell again.
The ECB’s latest bank lending survey (BLS) reports “a small unexpected net tightening of credit standards for loans or credit lines to firms in the third quarter of 2025”, with “perceived risks to the industry or firm-specific situation” as well as “perceived risks to the economic outlook” contributed to tighter credit standards. The “current high level of geopolitical uncertainty and risks connected to trade” were cited as reasons for discriminating across sectors or firms when issuing new loans.
The Day Ahead
While the Fed is currently operating in something of a vacuum in setting monetary policy, given the US government shutdown-related absence of key economic data, it still looks set to cut interest rates again when it concludes its two-day monetary policy meeting later today. With employment growth (as best as can be gauged) remaining soft, the impact of increased tariffs on inflation proving less pronounced than expected, and the stance of monetary policy still “moderately restrictive”, another 25bps reduction in the federal funds rate, to a range of 3.75%-4%, is on the cards. This is in line with current market pricing, which also envisages another quarter-point cut at the Fed’s final meeting of this year in December and a further 50-75bps reduction in 2026.
Dealer Comments
Today's Talking Points 04.11.2025
Market Commentary
There wasn’t a whole lot of movement in FX markets yesterday with the main currency pairs largely in consolidation mode, for now at least. The euro dipped to low of circa $1.15 against the dollar during the course of yesterday’s session but is back up to around $1.1530 this morning. Sterling is a touch weaker in response to comments from the UK Chancellor, Rachel Reeves, hitting the wires just now, slipping to around $1.31 against the dollar and to circa £0.88 against the euro.
Yesterday’s Events
Government bond yields are edging lower this morning amid weakness in equity markets, with yields down a couple of basis points in the main markets. Asian stocks were generally in the red overnight (the Nikkei in Japan was off almost 2%) and European markets are down more than 1% at the open this morning, while the futures market points to a decline in US stocks later today as well, with concerns about rich tech valuations and uncertainty about Fed interest rate policy cited as the reasons for the wobble.
Manufacturing activity in the US contracted for an eight month in a row in October according to the latest ISM survey, with the headline index falling to 48.7 from 49.1 in September. Output and new orders contracted again last month, albeit at a slower pace than in September, while manufacturers’ input cost rose again, although also more slowly than in September.
Fed Governor Cook believes “downside risks to employment are greater than the upside risks to inflation” and sees the current level of interest rates as still “modestly restrictive”. She also says “every meeting, including Decembers’s, is a live meeting,” suggesting she at least is open another cut in rates next month.
The Day Ahead
It is very quiet on the economic data front today, not helped of course by the government shutdown in the US, with little or nothing of note due for release. There are a large number of ECB members scheduled to speak over the course of the day.
3 Nov 2025
Today's Talking Points 03.11.2025
Market Commentary
The euro and sterling both lost ground against the dollar last week, shedding around one and two cents respectively (and two and three cents respectively for the month of October), most of this clocked up following Wednesday’s more hawkish than expected Fed meeting. The single currency (at $1.1530) is trading at the bottom end of the $1.15 to $1.18 range that has prevailed over the second half of 2025 to date (save for very brief forays down to $1.14 and up to $1.19), while sterling is trading at its lowest level ($1.3130) against the US currency since April and near year to date lows (£0.8780) against the euro. It is a potentially significant week ahead for the pound, with the Bank of England MPC due to announce its latest interest rate decision on Thursday. While the market is pricing in only about a 25% chance of a reduction in rates, softer than expected inflation and wage data recently could see a sizeable minority of the nine MPC members vote in favour of a cut. This could boost market expectations for a reduction in rates at the December meeting, which in turn could weigh on sterling.
Yesterday’s Events
US government bond yields edged down on Friday but still ended around 10bps higher on the week, while German and UK yields were flat and marginally lower respectively on the week. In equity markets, the Nasdaq in the US advanced by 0.6% on Friday to bring its gains for the month of October to almost 5%, while the S&P 500 gained 0.3% on the day and more than 2% on the month. European stocks ended lower on Friday but still gained around 2.5% in October.
The differing views among Fed members regarding the outlook for the US economy, which has made a cut in interest rates at the December meeting ‘far from assured’ according to Fed Chair Jerome Powell, were on full public display on Friday. While some said continuing downside risks to employment warrant another reduction in rates next month, others said still solid economic growth and upside risks to inflation argue for keeping rates on hold. The market, for its part, is pricing in about a 65% chance of a 25bps cut in December.
Headline inflation in the Euro area dipped to 2.1% in October (from 2.2% in September) according to Friday’s ‘flash’ reading, in line with the consensus forecast. Core inflation was a touch higher than expected at 2.4%, unchanged from September, with a second consecutive increase in services inflation (to 3.4% from 3.2% in September and its 2025 to date low of 3.1% in August) offsetting a decline in goods inflation (to 0.6% from 0.8%).
The Day Ahead
As well as the Bank of England interest rate decision on Thursday, economic data due include the ISM manufacturing and services surveys in the US today and Wednesday respectively, which should garner more attention than usual given the government shutdown-related absence of official data. The University of Michigan consumer confidence survey for November is also due in the US, on Friday, while Euro area retail sales are scheduled for Thursday.
31 Oct 2025
Today's Talking Points 31.10.2025
Market Commentary
While the ECB kept interest rates unchanged at 2% yesterday as widely expected, it was the continuing fallout from Wednesday’s more hawkish than expected Fed meeting – which dampened rate cut expectations and boosted the dollar – that drove the price action in FX markets. The euro and sterling fell to fresh post-meeting lows against the US currency during the course of yesterday’s session, of circa $1.1550 and $1.3120 respectively (the latter also the lowest level for GBPUSD since April), and both are only marginally firmer this morning, at about $1.1565 and $1.3140 respectively. EURGBP is little changed from yesterday morning at around £0.88.
Yesterday’s Events
US government bond yields were largely unchanged yesterday, after increasing sharply on Wednesday post the Fed meeting, while German and UK yields inched up a couple of basis points. In equity markets, US stocks sold off, led by the Nasdaq which shed around 1.6% (with the S&P 500 off around 1%), though the futures market point to a rebound at the open later today, while European stocks ended marginally lower.
To nobody’s surprise, the ECB stayed on hold at yesterday’s meeting. It said the Euro area economy has continued to grow despite the challenging global environment, inflation remains close to the 2% target, and the “Governing Council’s assessment of the inflation outlook is broadly unchanged,” while reiterating that it will “continue to follow a meeting-by-meeting approach” to determining the appropriate level of interest rates. The market expects rates to remain unchanged through the end of this year and into 2026.
GDP growth in the Euro area picked up to 0.2% q-o-q in Q3, from 0.1% in Q2, according to the flash ‘reading, slightly ahead of both the consensus forecast (+0.1%) and the ECB’s September projection (0.0%). Recent indicator data, including the October PMIs, point to a similar pace of growth in Q4. In yesterday’s post-meeting statement, the ECB noted that “the EU-US trade deal reached over the summer, the recently-announced ceasefire in the Middle East, and progress in the US-China trade negotiations have mitigated some of the downside risks to economic growth” in the zone, while “the robust labour market, solid private sector balance sheets and past interest rate cuts remain important sources” of support for the economy.
Business confidence in the UK rebounded this month according to the Lloyds Bank Business Barometer published earlier this morning, having declined sharply in September, with sentiment improving “across several regions and sectors.” Separately, house prices rose by 0.3% (seasonally adjusted) in October according to the Nationwide index, after rising 0.5% in September, pushing up the increase over the year to October to 2.4% (from 2.2% in September).
The Day Ahead
It is quiet for the remainder of the day in terms of economic data. A ‘flash’ CPI reading for October is due in the Euro area, with headline and core inflation expected to have nudged down to 2.1% and 2.3% respectively (from 2.2% and 2.4% in September) according to the consensus forecast. The ECB publishes it latest Survey of Professional Forecasters.
30 Oct 2025
Today's Talking Points 30.10.2025
Market Commentary
The Fed cut interest rates by 25bps to 3.75%-4% following yesterday’s meeting, as widely expected. However, Fed Chair Powell caused a stir in markets when he said at the post-meeting conference that “a further reduction at the December meeting is not a foregone conclusion, far from it.” Given that another 25bps cut in December had been almost fully priced in by the market, expectations for such a move were immediately lowered with a resulting spike in US government bond yields. The dollar strengthened initially as well, though it has since given back some of its gains. This sees EURUSD trading at around $1.1610 this morning, off its immediate post-meeting lows of about $1.1580, while GBPUSD is hovering around the $1.32 level, up from its lows of circa $1.3140. EURGBP is little changed, trading at £0.88. Today’s ECB meeting shouldn’t contain any surprises, with the central bank set to again keep the deposit rate on hold at 2%.
Yesterday’s Events
US government bond yields rose sharply as the market pared back the chances of a Fed rate cut at the December meeting (now around 65%), ending the day around 10bps higher across the curve, while German and UK have opened a touch higher this morning. US stocks gave up ground following the Fed meeting, ending flat on the day in the case of the S&P 500 and modestly higher (+0.5%) in the case of the Nasdaq. Earnings reports from some of the Big Tech companies elicited a mixed response in after-hours trading, while Trump’s “amazing” meeting with his Chinese counterpart – which saw the tariff truce between the two sides extended for a year, as well as a reduction in fentanyl-related tariffs on China (to 10% from 20%) – is having little impact on markets this morning.
The 25bps cut in US interest rates at yesterday’s meeting brings the cumulative reduction since September 2024 to 150bps. Regarding the Fed’s next meeting in December, Powell said “in the Committee’s discussions, there were strongly differing views about how to proceed in December (with) a further reduction in the policy rate not a forgone conclusion – far from it.”, adding that “we’re going to be looking at the data that we have and how that affects the outlook and the balance of risks” (and ultimately its decision on interest rates).
The Day Ahead
The focus today will be on the ECB’s latest interest rate announcement. With the Euro area economy expanding at a modest pace, inflation running close to the 2% target, and the deposit rate in neutral territory, the ECB is set to sit on its hands again and keep policy unchanged. The market also expects the deposit rate to remain on hold at 2% through the end of this year and into 2026, although it continues to price in some chance of one final 25bps cut in the current cycle. Meanwhile, there are a number of Euro area economic data releases scheduled for today, including the October Economic Sentiment Indicator; a ‘flash’ GDP reading for Q3, and the unemployment rate for August.
29 Oct 2025
Today's Talking Points 29.10.2025
Market Commentary
Sterling lost ground against both the euro and the dollar during yesterday’s session, which seemed to be related to an FT report suggesting the Chancellor of the Exchequer is facing a larger than expected ‘black hole’ in the UK public finances ahead of her budget next month. The pound is trading at a new 2025 low of £0.88 against the single currency this morning, and is down more than a cent against the dollar from yesterday morning at $1.3220. EURUSD is off yesterday’s best levels (of circa $1.1670) ahead of the Fed’s interest rate decision later today, trading at about $1.1630.
Yesterday’s Events
UK government borrowing costs were unaffected by the FT report with 10-year bond yields ending marginally lower on the day, while German and UK yields were little changed overall. In equity markets, the main US indices advanced again, led by the Nasdaq which gained around 0.8%, while European stocks were flat. Today sees the start of earnings results from some of the Big Tech companies.
Consumer confidence in the US fell for a third month in a row in October according to the Conference Board’s latest survey. Consumers’ assessment of current business and labour market conditions improved slightly this month, but the expectations index – based on consumers’ short-term outlook for income, business, and labour market conditions – fell again.
The ECB’s latest bank lending survey (BLS) reports “a small unexpected net tightening of credit standards for loans or credit lines to firms in the third quarter of 2025”, with “perceived risks to the industry or firm-specific situation” as well as “perceived risks to the economic outlook” contributed to tighter credit standards. The “current high level of geopolitical uncertainty and risks connected to trade” were cited as reasons for discriminating across sectors or firms when issuing new loans.
The Day Ahead
While the Fed is currently operating in something of a vacuum in setting monetary policy, given the US government shutdown-related absence of key economic data, it still looks set to cut interest rates again when it concludes its two-day monetary policy meeting later today. With employment growth (as best as can be gauged) remaining soft, the impact of increased tariffs on inflation proving less pronounced than expected, and the stance of monetary policy still “moderately restrictive”, another 25bps reduction in the federal funds rate, to a range of 3.75%-4%, is on the cards. This is in line with current market pricing, which also envisages another quarter-point cut at the Fed’s final meeting of this year in December and a further 50-75bps reduction in 2026.