EUR LONGS AT RISK OF FURTHER DOWNSIDE
* USD is mixed. Today: hawkish Fed Lacker & ISM non‐manu.
* USD—Brainard departs Treasury fueling speculation she is Fed bound.
* CAD is flat; however oil pricing is a medium‐term weight for CAD.
* EUR is weak as the market begins to price in risk of an interest rate cut on Thursday—our base case is a dovish ECB with a December cut.
* GBP is strong after a jump in services PMI to a 16‐year high of 62.5.
* JPY is strong, back from holidays; Kuroda suggest CPI target will be achieved but market doesn’t believe (either do we).
* AUD is flat after the RBA fails to introduce a dovish bias but raises concern over the level of AUD, noting it is “uncomfortably high”.
* CNY flat as HSBC services PMI is strong, Li suggest China needs 7.2% GDP to maintain employment level; PBoC hints at CNY flexibility.
Read full report: FX Daily
Scotiabank