Euro bidding snapped a six-day win streak despite broad-market retreat into USD.
Rate cut expectations rule the roost as markets head into a new week.
EUR/USD churned on the low side of 1.1000 on Monday, failing to spark a meaningful pullback after dipping past the key physiological last week, but also not falling any further despite a slight miss in European Retail Sales figures. It’s all about rate cut hopes for the next few days, and upbeat US labor data has driven broad-market rate cut hopes into the floorboards.
European economic data remains tepid for most of the trading week, leaving Fiber traders to stew in their juices until Wednesday’s late-day print of the Federal Open Market Committee’s (FOMC) latest Meeting Minutes, which is sure to draw plenty of attention but unlikely to reveal anything new. The key datapoint this week from the US economic calendar will be Thursday’s latest US Consumer Price Index (CPI) inflation print.
According to the CME’s FedWatch Tool, rate traders now expect roughly an 80% chance of a single 25 bps rate trim from the Fed in November. Last week’s bumper Nonfarm Payrolls (NFP) eviscerated nearly all hopes for a double-wide rate cut in November, to the point rate traders are seeing a one-in-five chance of no rate cut at all on November 7, according to the CME’s FedWatch Tool.
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