European FX Open - Softer Japan PMIs

Overnight, the Jibun Bank composite PMI fell away in early October to 49.4 from 52.0 the month previous amid a material drop in the services component.

The YEN though is in rebound mode after falling to 153.19 yesterday as Japan’s Finance Minister Kato said he sees one-sided, rapid moves in the FX market.

It will be interesting to see how the flash/preliminary PMIs fare out of Europe, particularly as slowing data has been an increasing theme in H2 so far. Forecasts wise, the EMU and UK versions are not expected to pull back much.

We also get French confidence surveys and UK CBI business optimism this morning.

In the second half, US flash PMIs are also due, while plenty of attention will be on the latest initial claims, consensus of 242k.

GBP starts the day a relative underperformer after BOE governor Bailey said UK disinflation is happening faster than officials had anticipated, the latest hint that the Bank will continue cutting interest rates next month.

Monetary policy stays front and centre. BOJ Governor Ueda hinted that more interest rate hikes are coming. Figuring out the right size and timing for further normalization of Japan’s easy monetary policy is Ueda's overarching preoccupation. The BOJ is widely expected to keep its target rate at 0.25% next week.

And, RBNZ chief Orr remarked the Committee is still thinking about lingering price pressures, even as it cuts interest rates to reflect a lower inflation outlook. Orr stated he wishes more people would read the Bank’s detailed report on its policy deliberations rather than relying on journalists or analysts!

This session, we are scheduled to hear from the likes of BOE's Mann and ECB's Kazaks, with Lane due after hours as well as the Norges Bank's Wolden Bache.

Overnight, ECB's Panetta said the EMU’s recent CPI slowdown and its weakening economy call for further rate cuts.

Elsewhere, US stock futures are mixed as Boeing workers rejected a tentative wage deal and will remain on strike, but Tesla beat the street in Q3 EPS.

And, as Trump and Harris continue to dish out barbs, a WSJ poll says Trump has a 2% lead. Another, the Bloomberg News/Morning Consult poll, shows the Republican and Democrat presidential candidates are in a dead heat among likely voters in seven swing states at 49% support each. Harris was 1.7 points ahead in Pennsylvania, but Trump held an advantage on the economy, with 50% trusting him more to handle it.

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