The USD is mixed, but little changed. The EURUSD is up 0.06% (lower USD). The USDJPY is up 0.13% (higher USD) and the GBPUSD is up 0.22% (lower USD). Gold is above $4200 and trading to a new record. US stocks are higher. The video above outlines the technicals that are driving the 3 major currency pairs - the EURUSD, USDJPY and GBPUSD.
There was a slew of economic data released out of the UK today. The data came in mostly better than expected, led by strong rebounds in manufacturing and industrial output, while construction was the lone weak spot. GDP growth was steady, signaling moderate recovery momentum heading into Q4.
GDP m/m: 0.1% (MET; exp. 0.1%, prev. -0.1%)
Construction Output m/m: -0.3% (MISS; exp. -0.1%, prev. 0.2%)
Goods Trade Balance: -21.2B (BEAT; exp. -21.8B, prev. -20.6B)
Index of Services 3m/3m: 0.4% (MET; exp. 0.4%, prev. 0.4%)
Industrial Production m/m: 0.4% (BEAT; exp. 0.2%, prev. -0.9%)
Manufacturing Production m/m: 0.7% (BEAT; exp. 0.2%, prev. -1.1%)
Fed Governor Miran (dove) has been speaking already today. He said he does not see a recession resulting from the renewed U.S.-China tensions, though he acknowledged the return of economic uncertainty that had previously dissipated. He warned that if manufacturers are unable to secure rare earth materials, it could be highly disruptive to production and the broader economy. Miran believes the Federal Reserve should cut interest rates by 50 basis points, but expects policymakers will likely opt for a smaller 25 bps move instead. He also noted that while tariffs could eventually lead to higher inflation, he does not see evidence of that yet.
Miran spoke yesterday, and said that two rate cuts this year still seem realistic and that monetary policy remains more restrictive than many realize due to shifts in the neutral rate. He explained that recent structural changes, including AI investment and immigration trends, are influencing the neutral rate and may be raising it over time. Miran emphasized that his differences with colleagues lie mainly in the pace of rate cuts rather than the ultimate policy destination. He holds a more optimistic view on inflation, citing expectations for cooling housing costs, but added that he would reassess if data comes in hotter than expected.
Fed Governor Waller (dove), speaking live on Bloomberg TV, said he had a good interview with Treasury Secretary Bessent for the Fed Chair role. He noted that the Fed hasn’t received much new data over the past six weeks and that private sector indicators show little change during that period.
Waller reaffirmed that cutting rates is the right course of action, emphasizing that not much has changed since the last policy meeting. However, he cautioned against moving too aggressively, suggesting the Fed should proceed carefully in 25-basis-point increments to avoid a policy mistake.
He also discussed broader economic risks, pointing to tariff uncertainty and ongoing questions about AI’s impact on productivity, which he said have made CEOs more hesitant to hire. He sees downward pressure on mortgages. If loose financial causes a boom, it should be seen in the labor market. He see inflation moving toward 2.5% and that GDP may weaken at the end of the year.
Note: Waller remains one of the more dovish members of the FOMC and, along with Bowman, previously dissented when the Committee voted to keep rates unchanged several months ago.
Fed’s Barkin (2027 voter) said there has been a noticeable shift in the job market, with executives reporting a large number of applicants for every position, suggesting labor market conditions are easing. He noted that overall demand remains solid, particularly among higher-income consumers, indicating spending resilience despite the labor softening.
ECB’s Muller said there’s a good case for keeping rates where they are, noting that current levels are not restraining investment or activity. He suggested a rate cut would only be justified if the economy performed significantly worse than expected and added that the inflationary period appears to be over.
Meanwhile, ECBs Kocher echoed a similar stance, saying the ECB is at or very near the end of the rate-cut cycle. He maintained a neutral tone, emphasizing the importance of keeping policy flexibility for potential future shocks while judging the current stance as balanced and appropriate.
France PM survived two vote of confidence votes as expected
Looking at the earnings released pre-open. The results reinforce a picture of healthy margins and stable demand, with the financial sector outperforming and corporate earnings momentum holding firm into Q4.
Travelers Companies (TRV) Q3 2025:
Adj. EPS $8.14 (BEAT; exp. $6.01), Revenue $12.47B (BEAT; exp. $11.82B)US Bancorp (USB) Q3 2025:
EPS $1.22 (BEAT; exp. $1.12), Revenue $7.33B (BEAT; exp. $7.14B)Infosys (INFY) Q2 2025:
Net Profit ₹73.64B (BEAT; exp. ₹72.01B), Revenue ₹444.9B (BEAT; exp. ₹439.29B)Marsh & McLennan (MMC) Q3 2025:
Adj. EPS $1.85 (BEAT; exp. $1.79), Revenue $6.351B (BEAT; exp. $6.31B)Bank of New York Mellon (BK) Q3 2025:
Adj. EPS $1.91 (BEAT; exp. $1.78), Revenue $5.08B (BEAT; exp. $4.97B)
US stocks are higher in premarket trading with the Dow industrial average up 188 points. The S&P index is up 30 point to the NASDAQ index is up 144 points. The
In the US debt market, yields are lower
- 2-year yield 3.4972%, -0.8 basis points.
- 5 year yield 3.612%, -1.8 basis points.
- 10 year yield 4.018%, -2.4 basis points
- 30 year yield 4.608%, -3.1 basis points
The Philadelphia Fed will release its business index at 8:30 AM with expectations of 8.5 versus 23.2. Yesterday the regional Empire manufacturing data came in better than expected. At 10 AM, the NAHB housing market index is expected at 33 versus 32 last month.
