investingLive European FX news wrap: Risk-off mood despite lack of catalysts

• Earnings Analysis: Large-Caps Turn Sharply Negative After Market Close Yesterday
• ECB’s Patsalides: European economy is showing resilience
• SNB’s Chairman Schlegel: Inflation should rise slightly in the next quarters
• JPY intervention cheat sheet: from verbal to physical action
• Japanese yen leads the major currencies space amid risk selloff
• UK’s Reeves: Since last year’s budget, the world has thrown more challenges our way
• European indices off to a rough start to the day
• What are the main events for today?
• SNB’s Tschudin: We will only use negative rates when necessary
• Eurostoxx futures -0.9% in early European trading
• ECB’s Rehn: Uncertainty about future economic developments remains high
• FX option expiries for 4 November 10am New York cut
• US futures look to reverse the start of the week gains on the day
• Japan prime minister Takaichi says inflation yet to sustainably hit BOJ’s price target
• RBA governor Bullock: We are not moved by outside commentary on policy
• RBA governor Bullock: We did not considering cutting rates
• China president Xi reaffirms pledge for cooperation, close communication with Russia

It’s been a boring day in terms of data and news releases. RBA’s Bullock remained neutral and didn’t offer much in terms of forward guidance. She said that “it’s possible that there’s no more rate cuts but also possible that there will be some more”. It will of course depend on economic data but they will need a significant deterioration in the labour market to force them to cut more.

We also heard from UK Chancellor Reeves and despite her not saying much, the GBP weakened across the board. That’s not the first time we see the pound weakening just because Reeves speaks. Interesting pattern there.

Lastly, we got SNB’s Tschudin repeating that interest rates are where they should be, basically pushing back on speculations about negative rates as the bar to go back into NIRP remains high.

In the markets, we’ve been seeing risk-off moves pretty much across the board despite lack of clear catalysts. When this happens, it usually reverses in the American session. We’ll see.

The main thing weighing on the markets is of course the recent hawkish turn from Fed Chair Powell. The hawkish repricing led to dollar strength and a pullback in stocks and bonds. We don’t have much in the American session, but tomorrow we will get the US ADP report and the US ISM Services PMI. Given the shutdown, they are the only key US releases this week.

This article was written by Giuseppe Dellamotta at investinglive.com.