USD
Loads of events on the periphery and starting to add up and form a comprehensive view of what traders expect of markets next year. The Reserve Bank of Australia held rates last night and gave a hawkish statement of intent for the future. The Bank of Japan is expected to hike its main interest rate come the 19th of this month, accelerating the ongoing unwinding of the decades old carry trade.
All of these "smaller" events are adding up and traders are getting more and more on edge that it might be catching for the Fed.
Implied 1 week volatility in EURUSD topped 6%, similar to GBPUSD, whilst USDJPY implied volatility climbed near 9%. This has less to do with the Fed tomorrow and more to do with the Non-Farm Payroll jobs figures we have on the 16th. With Septembers jobs figures so robust, a confirmation of an ongoing revival or at least robustness in the US labour market could scatter expectations of early 2026 rate cuts from the Fed.
This would upset the entire cosy narrative USD traders have built up hitherto and could have consequences far beyond the US.
Markets Today
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Major Economic Releases (All times in GMT)
15:00 - US JOLTS Job Openings Data