The dollar strengthened against a broad range of currencies yesterday, although its gains were modest enough (a bit more than 0.5%), amid some paring back of Fed rate cut expectations and higher US bond yields. EURUSD and GBPUSD are trading at around $1.1740 and $1.3460 respectively this morning, down from Tuesday’s closing levels of $1.1815 and $1.3525 (but a touch above yesterday’s intra-day lows), with both still well within the fairly tight ranges that have prevailed through the month of September to date. EURGBP is little changed from yesterday morning’s levels at about £0.8730.
Yesterday’s Events
US government bonds underperformed yesterday. Yields increased by 2-4bps across the curve as Fed rate cut expectations softened a touch, in contrast to largely unchanged yields in the case of both German and UK bonds (this in the context of narrow trading ranges for yields generally this week). In equity markets, US stocks retreated some more from Monday’s record highs although losses were small (about o.3% in the case of the S&P 500), while the Euro Stoxx 600 was flat on the day.
In remarks yesterday, Bank of England Governor Andrew Bailey said monetary policy remains in “restrictive” territory and “there is still some further journey down in interest rates to go.” He cautioned though that “exactly when that will be and how much it will be will depends on the path of inflation”. The market sees little chance of the BoE lowering rates again this year and is not pricing in another full quarter-point reduction until April next year.
Business confidence in Germany fell in September according to the latest ifo survey, with the Business Climate Index dipping by more than expected to 87.7 (down from 88.9 in August and its lowest level since May). Sentiment amongst manufacturing and (particularly) services companies declined this month, but there was an improvement in confidence in the construction sector.
The Day Ahead
Looking to the day ahead, economic data due include money supply & credit growth in the Euro area and jobless claims, durable goods orders, existing home sales, and a third estimate of Q2 GDP growth in the US. A large number of Fed members are due on the wires over the course of the day as well.
Author: Brian Cuddy
Tel: 1800 30 30 03 / +353 (0)1 790 0000
25 Sep 2025
Today's Talking Points 24.09.2025
Market Commentary
Movements in the main currency pairs were modest enough yesterday. The euro and sterling both ended the day little changed against the dollar from Monday’s close, while EURGBP was also largely flat on the day. The flash PMIs for September were broadly in line with expectations in the case of the Euro area but weaker than forecast for the US and the UK, while pointing to modest growth in all three economies. Fed Chair Powell gave no nod in the direction of another rate cut as soon as next month’s meeting in remarks on the US economy but did say the current stance of monetary policy is “still mildly restrictive”, which leaves scope for a further reduction in rates. EURUSD and GBPUSD are trading at around $1.1790 and $1.3490 respectively this morning, down from highs yesterday of about $1.1820 and $1.3535, while EURGBP is trading at £0.8740, in sight of its high this year so far of about £0.8770.
Yesterday’s Events
The price action in government bond markets was limited enough. US and UK yields ended slightly lower on the day, by around 2-4bps across the curve, partly reflecting the softer PMIs, while German yields ended broadly flat. In equity markets, US stocks retreated from Monday’s all-time highs, with the Nasdaq leading the way (shedding almost 1%), while European indices ended with gains of around half a percent.
In updated economic forecasts published yesterday, the OECD says global GDP growth is projected to slow from 3.3% in 2024 to 3.2% in 2025 and 2.9% in 2026 “as higher tariffs and ongoing policy uncertainty slow down investment and trade.” Growth in the US is forecast to “fall sharply” from 2.8% in 2024 to 1.8% in 2025 and 1.5% in 2026 “owing to higher tariff rates, moderating net immigration and reductions in the federal government workforce,” while Euro area growth “experiences a slowdown from 1.2% in 2025 to 1.0% in 2026 with increased trade frictions and geopolitical uncertainty somewhat offset by stronger public investment and easier credit conditions.”
In his speech on the US economy, Fed Chair Powell said “increased downside risks to employment” prompted the central bank “to take another step toward a more neutral policy stance” by lowering interest rates (by 25bps to 4-4.25%) at last week’s meeting. He also noted that the current stance of policy is “still modestly restrictive”, which leaves scope for a further reduction in rates to a neutral level, though he gave no indication the Fed might cut again as soon as next month’s meeting.
The Day Ahead
It is a quiet enough day ahead in terms of economic data with the Ifo index of business confidence in Germany and new home sales in the US the only releases of note. Fed member Daly speaks on the outlook for US monetary policy, while the BoE’s Greene speaks on monetary policy in the UK.
Author: Brian Cuddy
Tel: 1800 30 30 03 / +353 (0)1 790 0000
23 Sep 2025
Today's Talking Points 23.09.2025
Market Commentary
Following its post-Fed meeting rally over the latter part of last week, the dollar gave up some ground during the course of yesterday’s session. The euro is back up to about $1.1785 against the US currency this morning, from lows early yesterday of around $1.1725, while sterling is trading just north of $1.35, up from its lows yesterday of circa $1.3450. The pound continues to trend down against the euro though and at £0.8720 is not far off its year-to-date low of about £0.8770 in late July. The main economic data releases today are the flash PMIs for September due in the Euro area, UK and US.
Yesterday’s Events
It was relatively quiet in government bond markets. US yields nudged higher and are now around 10-15bps off their pre-Fed meeting lows (of around 3.50% and 4% in the case of 2-and 10-year yields respectively), while German and UK yields were both broadly flat. It was another day, another record high for US stocks, with the Nasdaq gaining around 0.7% and the S%P 500 up half a percent. European equities underperformed, shedding about 0.3% on the day.
A number of Fed members yesterday cautioned about further cuts in interest rates, citing concerns about upside risks to the outlook for inflation. This was in contrast to Fed Governor (and Trump appointee), Steve Miran, who reiterated his call for another 125bps reduction in rates, saying leaving rates where they are risks “unnecessary layoffs and higher unemployment.”
ECB member Nagel says he’s “not concerned about the current valuation level of the euro,” noting that “simply looking at the euro’s gains against the US dollar exaggerates the extent to which (Euro area exports) are being burdened.” While the single currency has risen by around 14% against the dollar so far this year, it’s gains against a basket of currencies of the Euro area’s main trading partners has been around half this at just under 7%.
The Day Ahead
For the day ahead, as mentioned, flash PMIs for September are scheduled in the main economies, while the current account balance and a couple of regional manufacturing surveys are also due in the US.
Author: Brian Cuddy
Tel: 1800 30 30 03 / +353 (0)1 790 0000
22 Sep 2025
Today's Talking Points 22.09.2025
Market Commentary
It was something of a “game of two halves” across bond, equity, and currency markets last week. In FX, the dollar fell to its lows for the week on Wednesday following the Fed’s rate cut before rebounding strongly on Thursday-Friday. This saw EURUSD end the week largely unchanged from the previous Friday’s close at just under $1.1750 but a good bit off its fleeting high of circa $1.1920 immediately following the Fed rate announcement. Sterling finished about three-quarters of a cent lower on the week against the dollar at $1.3475, well down from Wednesday’s (post-Fed) high of $1.3725, and about three-quarters of a penny lower against the euro at around £0.8720, with Friday’s worse than expected UK government borrowing figures for August adding to the currency’s decline at the end of the week. For the coming week, the economic data calendar is relatively light (particularly outside the US) with flash PMIs for September in the main economies (Tuesday) and PCE inflation for August in the US (Friday) the main releases of note. There is plenty of “Fed-speak” over the course of the week though, including Chair Powell on Tuesday, to keep markets interested.
Yesterday’s Events
Now that the latest central bank meetings are out of the way, market expectations for rates are not much different from those prevailing before the meetings, with the Fed seen cutting by another 50bps (to 3.5%-3.75%) by next January at the latest and by a further 50bps by July; the ECB on hold with some chance of one final cut (to 1.75%); and the next 25bps cut from the Bank of England (to 3.75%) not fully priced in until April next year with some chance of a further quarter-point reduction by end-2026. Perhaps reflecting this, short-dated bond yields across the main markets were not much changed last week either, though they ended off their mid-week lows, while yields further out the curve rose by 5-7bps. In equity markets, the S&P 500 closed at a new all-time high on Friday on the back of gains of just over 1% on the week, while the Euro Stoxx 50 advanced by a little over 1% as well.
Fed member Kashkari says he supports another 50bps reduction in interest rates by the end of this year, which is in line with the median projection in the Fed’s latest ‘dot-plot’. He believes the risk of a “rapid further weakening of the labour market” is greater that the risk of “a large upside inflation surprise”, noting that economic cycles show that “when labour markets weaken, they can weaken quickly and non-linearly.”
ECB’s Stournaras says the central bank is in “a good equilibrium” in terms of interest rates – which is the consistent message coming from ECB members – and that “it would take a substantial change in our outlook to change our position.” The ECB latest forecasts show inflation in the Euro area is expected to run close to, albeit slightly below, the 2% target over the next couple of years.
The Day Ahead
It is very quiet today in terms of economic data today with consumer confidence in the Euro area the only release of note. As mentioned, flash PMIs for September are due in the main economies tomorrow, while a final estimate of US third-quarter GDP is scheduled for Thursday ahead of the PCE inflation data on Friday.
Author: Brian Cuddy
Tel: 1800 30 30 03 / +353 (0)1 790 0000
19 Sep 2025
Today's Talking Points 19.09.2025
Market Commentary
The dollar remains on the front foot for now as it extends its post-Fed meeting gains. The Bank of England MPC left policy on hold yesterday, as expected, and remains cautious about the prospects for further rate cuts, which also came as no surprise to markets. Retail sales data released in the UK a short while ago matched the consensus forecast, but public sector borrowing data, released as well, were worse than expected. The latter is weighing on sterling, which has weakened to around £0.8715 against the euro and to $1.3515 against the dollar. The euro is well off its week’s highs against the US currency, trading at about $1.1775 this morning.
Yesterday’s Events
US bond yields nudged up further yesterday, having spiked higher following Wednesday’s Fed meeting, increasing by 2-4bps across the curve. German and UK yields played catch-up with the jump in US yields, increasing by 5-8bps in the 10- and 30-year areas of the curve. Equity markets had a positive session, with European stocks rallying by 1.5% and the S&P 500 in the US closing at new record highs on the back of gains of around half a percent.
According to this morning’s UK data, public sector net borrowing was £18.0 billion in August, £3.5 billion more than in August 2024 and the highest August borrowing for five years. Borrowing for the first five months of the current financial year (April-August) was £83.8 billion, some £16 billion ahead of the corresponding period of 2024. Meanwhile, retail sales volumes rose for a third consecutive month in August, increasing by 0.5% from June, though spending over the June-August period was still slightly lower than in the three months to May.
The Bank of England MPC voted 7-2 to keep interest rates unchanged at 4% with the two dissenters voting for a 25bps cut to 3.75%. The MPC remains cautious about the outlook for further rate cuts, saying “the timing and pace of future reductions in the restrictiveness of policy will depend on the extent to which underlying disinflationary pressures continue to ease.” The MPC also voted to reduce the Bank’s stock of gilts by £70bn during Oct 25-Sept 26, with active gilt sales of £21bn (though the share of long-dated bond sales will be reduced).
The Day Ahead
It is a quiet end to the week in terms of economic data with little or nothing of note due for release today.
Dealer Comments
Today's Talking Points 25.09.2025
Market Commentary
The dollar strengthened against a broad range of currencies yesterday, although its gains were modest enough (a bit more than 0.5%), amid some paring back of Fed rate cut expectations and higher US bond yields. EURUSD and GBPUSD are trading at around $1.1740 and $1.3460 respectively this morning, down from Tuesday’s closing levels of $1.1815 and $1.3525 (but a touch above yesterday’s intra-day lows), with both still well within the fairly tight ranges that have prevailed through the month of September to date. EURGBP is little changed from yesterday morning’s levels at about £0.8730.
Yesterday’s Events
US government bonds underperformed yesterday. Yields increased by 2-4bps across the curve as Fed rate cut expectations softened a touch, in contrast to largely unchanged yields in the case of both German and UK bonds (this in the context of narrow trading ranges for yields generally this week). In equity markets, US stocks retreated some more from Monday’s record highs although losses were small (about o.3% in the case of the S&P 500), while the Euro Stoxx 600 was flat on the day.
In remarks yesterday, Bank of England Governor Andrew Bailey said monetary policy remains in “restrictive” territory and “there is still some further journey down in interest rates to go.” He cautioned though that “exactly when that will be and how much it will be will depends on the path of inflation”. The market sees little chance of the BoE lowering rates again this year and is not pricing in another full quarter-point reduction until April next year.
Business confidence in Germany fell in September according to the latest ifo survey, with the Business Climate Index dipping by more than expected to 87.7 (down from 88.9 in August and its lowest level since May). Sentiment amongst manufacturing and (particularly) services companies declined this month, but there was an improvement in confidence in the construction sector.
The Day Ahead
Looking to the day ahead, economic data due include money supply & credit growth in the Euro area and jobless claims, durable goods orders, existing home sales, and a third estimate of Q2 GDP growth in the US. A large number of Fed members are due on the wires over the course of the day as well.
25 Sep 2025
Today's Talking Points 24.09.2025
Market Commentary
Movements in the main currency pairs were modest enough yesterday. The euro and sterling both ended the day little changed against the dollar from Monday’s close, while EURGBP was also largely flat on the day. The flash PMIs for September were broadly in line with expectations in the case of the Euro area but weaker than forecast for the US and the UK, while pointing to modest growth in all three economies. Fed Chair Powell gave no nod in the direction of another rate cut as soon as next month’s meeting in remarks on the US economy but did say the current stance of monetary policy is “still mildly restrictive”, which leaves scope for a further reduction in rates. EURUSD and GBPUSD are trading at around $1.1790 and $1.3490 respectively this morning, down from highs yesterday of about $1.1820 and $1.3535, while EURGBP is trading at £0.8740, in sight of its high this year so far of about £0.8770.
Yesterday’s Events
The price action in government bond markets was limited enough. US and UK yields ended slightly lower on the day, by around 2-4bps across the curve, partly reflecting the softer PMIs, while German yields ended broadly flat. In equity markets, US stocks retreated from Monday’s all-time highs, with the Nasdaq leading the way (shedding almost 1%), while European indices ended with gains of around half a percent.
In updated economic forecasts published yesterday, the OECD says global GDP growth is projected to slow from 3.3% in 2024 to 3.2% in 2025 and 2.9% in 2026 “as higher tariffs and ongoing policy uncertainty slow down investment and trade.” Growth in the US is forecast to “fall sharply” from 2.8% in 2024 to 1.8% in 2025 and 1.5% in 2026 “owing to higher tariff rates, moderating net immigration and reductions in the federal government workforce,” while Euro area growth “experiences a slowdown from 1.2% in 2025 to 1.0% in 2026 with increased trade frictions and geopolitical uncertainty somewhat offset by stronger public investment and easier credit conditions.”
In his speech on the US economy, Fed Chair Powell said “increased downside risks to employment” prompted the central bank “to take another step toward a more neutral policy stance” by lowering interest rates (by 25bps to 4-4.25%) at last week’s meeting. He also noted that the current stance of policy is “still modestly restrictive”, which leaves scope for a further reduction in rates to a neutral level, though he gave no indication the Fed might cut again as soon as next month’s meeting.
The Day Ahead
It is a quiet enough day ahead in terms of economic data with the Ifo index of business confidence in Germany and new home sales in the US the only releases of note. Fed member Daly speaks on the outlook for US monetary policy, while the BoE’s Greene speaks on monetary policy in the UK.
23 Sep 2025
Today's Talking Points 23.09.2025
Market Commentary
Following its post-Fed meeting rally over the latter part of last week, the dollar gave up some ground during the course of yesterday’s session. The euro is back up to about $1.1785 against the US currency this morning, from lows early yesterday of around $1.1725, while sterling is trading just north of $1.35, up from its lows yesterday of circa $1.3450. The pound continues to trend down against the euro though and at £0.8720 is not far off its year-to-date low of about £0.8770 in late July. The main economic data releases today are the flash PMIs for September due in the Euro area, UK and US.
Yesterday’s Events
It was relatively quiet in government bond markets. US yields nudged higher and are now around 10-15bps off their pre-Fed meeting lows (of around 3.50% and 4% in the case of 2-and 10-year yields respectively), while German and UK yields were both broadly flat. It was another day, another record high for US stocks, with the Nasdaq gaining around 0.7% and the S%P 500 up half a percent. European equities underperformed, shedding about 0.3% on the day.
A number of Fed members yesterday cautioned about further cuts in interest rates, citing concerns about upside risks to the outlook for inflation. This was in contrast to Fed Governor (and Trump appointee), Steve Miran, who reiterated his call for another 125bps reduction in rates, saying leaving rates where they are risks “unnecessary layoffs and higher unemployment.”
ECB member Nagel says he’s “not concerned about the current valuation level of the euro,” noting that “simply looking at the euro’s gains against the US dollar exaggerates the extent to which (Euro area exports) are being burdened.” While the single currency has risen by around 14% against the dollar so far this year, it’s gains against a basket of currencies of the Euro area’s main trading partners has been around half this at just under 7%.
The Day Ahead
For the day ahead, as mentioned, flash PMIs for September are scheduled in the main economies, while the current account balance and a couple of regional manufacturing surveys are also due in the US.
22 Sep 2025
Today's Talking Points 22.09.2025
Market Commentary
It was something of a “game of two halves” across bond, equity, and currency markets last week. In FX, the dollar fell to its lows for the week on Wednesday following the Fed’s rate cut before rebounding strongly on Thursday-Friday. This saw EURUSD end the week largely unchanged from the previous Friday’s close at just under $1.1750 but a good bit off its fleeting high of circa $1.1920 immediately following the Fed rate announcement. Sterling finished about three-quarters of a cent lower on the week against the dollar at $1.3475, well down from Wednesday’s (post-Fed) high of $1.3725, and about three-quarters of a penny lower against the euro at around £0.8720, with Friday’s worse than expected UK government borrowing figures for August adding to the currency’s decline at the end of the week. For the coming week, the economic data calendar is relatively light (particularly outside the US) with flash PMIs for September in the main economies (Tuesday) and PCE inflation for August in the US (Friday) the main releases of note. There is plenty of “Fed-speak” over the course of the week though, including Chair Powell on Tuesday, to keep markets interested.
Yesterday’s Events
Now that the latest central bank meetings are out of the way, market expectations for rates are not much different from those prevailing before the meetings, with the Fed seen cutting by another 50bps (to 3.5%-3.75%) by next January at the latest and by a further 50bps by July; the ECB on hold with some chance of one final cut (to 1.75%); and the next 25bps cut from the Bank of England (to 3.75%) not fully priced in until April next year with some chance of a further quarter-point reduction by end-2026. Perhaps reflecting this, short-dated bond yields across the main markets were not much changed last week either, though they ended off their mid-week lows, while yields further out the curve rose by 5-7bps. In equity markets, the S&P 500 closed at a new all-time high on Friday on the back of gains of just over 1% on the week, while the Euro Stoxx 50 advanced by a little over 1% as well.
Fed member Kashkari says he supports another 50bps reduction in interest rates by the end of this year, which is in line with the median projection in the Fed’s latest ‘dot-plot’. He believes the risk of a “rapid further weakening of the labour market” is greater that the risk of “a large upside inflation surprise”, noting that economic cycles show that “when labour markets weaken, they can weaken quickly and non-linearly.”
ECB’s Stournaras says the central bank is in “a good equilibrium” in terms of interest rates – which is the consistent message coming from ECB members – and that “it would take a substantial change in our outlook to change our position.” The ECB latest forecasts show inflation in the Euro area is expected to run close to, albeit slightly below, the 2% target over the next couple of years.
The Day Ahead
It is very quiet today in terms of economic data today with consumer confidence in the Euro area the only release of note. As mentioned, flash PMIs for September are due in the main economies tomorrow, while a final estimate of US third-quarter GDP is scheduled for Thursday ahead of the PCE inflation data on Friday.
19 Sep 2025
Today's Talking Points 19.09.2025
Market Commentary
The dollar remains on the front foot for now as it extends its post-Fed meeting gains. The Bank of England MPC left policy on hold yesterday, as expected, and remains cautious about the prospects for further rate cuts, which also came as no surprise to markets. Retail sales data released in the UK a short while ago matched the consensus forecast, but public sector borrowing data, released as well, were worse than expected. The latter is weighing on sterling, which has weakened to around £0.8715 against the euro and to $1.3515 against the dollar. The euro is well off its week’s highs against the US currency, trading at about $1.1775 this morning.
Yesterday’s Events
US bond yields nudged up further yesterday, having spiked higher following Wednesday’s Fed meeting, increasing by 2-4bps across the curve. German and UK yields played catch-up with the jump in US yields, increasing by 5-8bps in the 10- and 30-year areas of the curve. Equity markets had a positive session, with European stocks rallying by 1.5% and the S&P 500 in the US closing at new record highs on the back of gains of around half a percent.
According to this morning’s UK data, public sector net borrowing was £18.0 billion in August, £3.5 billion more than in August 2024 and the highest August borrowing for five years. Borrowing for the first five months of the current financial year (April-August) was £83.8 billion, some £16 billion ahead of the corresponding period of 2024. Meanwhile, retail sales volumes rose for a third consecutive month in August, increasing by 0.5% from June, though spending over the June-August period was still slightly lower than in the three months to May.
The Bank of England MPC voted 7-2 to keep interest rates unchanged at 4% with the two dissenters voting for a 25bps cut to 3.75%. The MPC remains cautious about the outlook for further rate cuts, saying “the timing and pace of future reductions in the restrictiveness of policy will depend on the extent to which underlying disinflationary pressures continue to ease.” The MPC also voted to reduce the Bank’s stock of gilts by £70bn during Oct 25-Sept 26, with active gilt sales of £21bn (though the share of long-dated bond sales will be reduced).
The Day Ahead
It is a quiet end to the week in terms of economic data with little or nothing of note due for release today.