It has been a trip at the moment between a combined non-farm payrolls report and Fed commentary.
With the playing cards now all on the desk, the market is shifting away from 50 foundation factors. Odds are right down to 23% from as excessive as 57% within the fast aftermath of the roles report.
On the identical time, there are 70 bps priced in for the November 7 assembly and 112 bps for yr finish. That highlights a really excessive chance of not less than one 50 bps within the months forward.
For now although, the one factor that issues to the market is the upcoming assembly and the danger aversion in inventory markets is resulting in a greenback bid. That is regardless of Treasury yields down 4-9 bps throughout the curve (with the entrance finish main). The message there may be that if the Fed would not minimize 50 now, it should minimize extra later.
In concept, that ought to damage the US greenback however the market is extra centered on the flight to security proper now, notably the commodity currencies. A few of which may be tied to the weakening of the AI commerce with NVDA down one other 5.3% at the moment and Broadcom down nearly 10% after earnings.
With that, the commodity currencies are notably tender and the Aussie is down 1%.
AUD/USD 1 hour
