![\"\"](\"\/wp-content\/uploads\/2025\/10\/image-135.png\")
<\/figure>\n\n\n\nGBP \u2013 BoE decision next week<\/h2>\n\n\n\n
Cable seems to be ceding ground across the board. In particular, the cable for the week has been in the reds against the EUR,USD,CAD,AUD and the JPY, showcasing a wider weakness on behalf of the sterling. On a fundamental level, this coming month is the release of the UK\u2019s November budget which we anticipate will garner significant attention. In this author\u2019s view, the UK November budget will come with some very harsh realities over the state of the Government\u2019s finances and how the gaping budget hole will need to be addressed with unpopular measures. On a monetary level, we note that the BoE\u2019s interest rate decision is set to occur next week, with the majority of market participants currently anticipating the bank to remain on hold at 4.00% with GBP OIS currently implying a 72.6% probability for such a scenario to materialize. Hence, our attention will turn to the bank\u2019s accompanying statement and as to how each member voted, in order to gauge where the overall sentiment in the BoE currently stands. Overall, should it appear that the bank may be preparing to cut rates in the near future it could weigh on the sterling and vice versa. On a macroeconomic level, we would like to note that the UK\u2019s manufacturing PMI figure for October is due out on Monday. Should the figure showcase an improvement or even enter expansionary territory it may provide support for the sterling and vice versa.<\/p>\n\n\n\n
Analyst\u2019s opinion (GBP)<\/p>\n\n\n\n
\u201cWe\u2019ve noted our concerns about the upcoming November budget and with the finish line now less than a month away, we may see market participants positioning themselves in anticipation of the aforementioned release. Furthermore, for the BoE it is this author\u2019s view that a more dovish tone may emerge from policymakers if they are also concerned about the measures the Government may take to cover the budget hole that has been created. Hence, the BoE\u2019s meeting next week may have a dual purpose for participants.\u201d<\/p>\n\n\n\n On a monetary level, the BOJ remained on hold at 0.50% as was widely expected by market participants. Moreover for the second meeting in a row, the bank\u2019s members where split with 7 favouring to remain on hold and two members opting for a rate hike. Yet, the main event was BOJ Governor Ueda\u2019s press conference following the bank\u2019s monetary policy in which he stated per the FT \u201cAt present, we do not recognise any elevated concern that we are falling behind the curve\u201d which tends to point towards a prolonged \u201cholding pattern\u201d for the bank. In turn, the possibility of the bank remaining on hold for a prolonged period of time could possibly weigh on the JPY. On a macroeconomic level, we would like to note Japan\u2019s Tokyo CPI rates for October which were released earlier on today and showcased an acceleration of inflationary pressures in the Japanese economy which in turn could provide some support for the JPY.<\/p>\n\n\n\n Analyst\u2019s opinion (JPY)<\/p>\n\n\n\n \u201cThe main issue for us is the BOJ\u2019s continued holding pattern, as by now we wouldn\u2019t have been surprised if they had decided to hike rates. Moreover, with the new Government external pressure may be building on the BOJ to resume their rate hiking path. Yet, a failure to clearly showcase a willingness to hike rates could weigh on the JPY\u201d<\/p>\n\n\n\n For the EUR on a monetary policy level we must of course note the ECB\u2019s interest rate decision yesterday. The bank remained on hold as was widely expected and thus attention turned towards ECB President Lagarde\u2019s post decision press conference and the bank\u2019s accompanying statement where it was noted that \u201cThe EU-US trade deal reached over the summer, the recently announced ceasefire in the Middle East and today\u2019s announcement of progress in the US-China trade negotiations have mitigated some of the downside risks to economic growth\u201d and with president Lagarde stating that \u201cThe Governing Council is not pre-commiting to a particular rate path\u201d showcases that the bank may remain on a prolonged holding period. In turn this could be perceived as slightly hawkish in nature and may have provided the EUR with the opportunity to claw back some of its losses against the dollar. On a macroeconomic level we would like to note the Zone\u2019s preliminary Core CPI rate for October came in hotter than expected at 2.4% yet the headline rate came in at 2.1% thus validated the anticipated easing of inflationary pressures in the Eurozone. Moreover, the Zone\u2019s preliminary GDP rate for Q3 came in better than expected which may aidf the EUR in the long run. For next week we would like to note the composite PMI figure for the Zone, France\u2019s services PMI figure and Germany\u2019s manufacturing PMI figures all for October.<\/p>\n\n\n\n Analyst\u2019s opinion (EUR)<\/p>\n\n\n\n \u201cThe EUR is an interesting one but as we had anticipated, the ECB appears to be done with cutting interest rates in the near future. Moreover, for next week the EUR may cede control of its direction to other stronger currencies\u201d<\/p>\n\n\n\n The RBA\u2019s interest rate decision is set to occur in the coming week and could thus garner significant attention from Aussie traders. Specifically the majority of market participants are currently anticipating the bank to remain on hold, with AUD OIS currently implying a 93% probability for such a scenario to materialize. Hence our attention will turn to the bank\u2019s accompanying statement which we would not be surprised to mention the positive economic implications as a result of the recent agreements made between China and the US to prevent a full-blown trade war. Moreover, considering that Australia\u2019s CPI rates for Q3 exceeded expectations by economists and showcase a significant acceleration of inflationary pressures the Aussie may have gained support during the week. Furthermore as a result of the hotter than expected inflation print we would not be surprised to see the RBA adopting a more hawkish tone in their accompanying statement which could aid the Aussie.<\/p>\n\n\n\n Analyst\u2019s opinion (AUD)<\/p>\n\n\n\n \u201cThe recent trade developments between the US and China may have been well received in Australia considering that China is their trading partner. Moreover, the hotter than expected inflation print may have further boosted the Aussie and considering the RBA\u2019s meeting next week, we wouldn\u2019t be surprised to see a hawkish tone emerging which could further aid the AUD\u201d<\/p>\n\n\n\n The Bank of Canada cut rates by 25 basis points as was widely expected by market participants. In their accompanying statement it was stated that “If inflation and economic activity evolve broadly in line with the October projection, Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment\u201d showcasing that the bank appears to be ready to remain on hold for a prolonged period of time. Yet has kept the door open should they need to revisit their policy. Nonetheless, the comments may have been perceived as relatively hawkish in nature which could provide some support for the CAD. On a macroeconomic level the nation\u2019s GDP rate on a month on month basis for August came in lower than expected, showcasing a contraction in economic growth for the Canadian economy, which may have weighed slightly on the CAD as the weeks comes to a close. For next week traders may be interest in the release of Canada\u2019s manufacturing data.<\/p>\n\n\n\n Analyst\u2019s opinion (CAD)<\/p>\n\n\n\n \u201cThe BOC in our view may be heavily influenced from developments to the Canadian economy and in particular their economic relationship with the US as the situation and relationship between the two nations continues to be volatile.\u201d<\/p>\n\n\n\n As an epilogue, in the FX market we expect the USD to maintain the initiative over its counterparts and we must continue to raise our concern over the ongoing US Government shutdown. Moreover, it remains to be seen as to whether we will received the US Employment data next week. In other news the US Equities markets appear to have benefited from the recent trade talks between China and the US which seem to have borne fruit and thus allowed the two nations to avoid a full blown trade war. In turn, the return of some normality may have weighed on gold\u2019s price as it may have seen some safe haven outflows. Politically we must note that the situation in Venezuela remains volatile and we wouldn\u2019t be surprised to see the US conducting more strikes on alleged cartel members which could further intensify the tensions in the region.<\/p>\n\n\n\n![\"\"](\"\/wp-content\/uploads\/2025\/10\/image-136.png\")
<\/figure>\n\n\n\nJPY \u2013 BoJ sticks to their guns at 0.50%<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2025\/10\/image-137.png\")
<\/figure>\n\n\n\nEUR \u2013 ECB keeps rates unchanged<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2025\/10\/image-138.png\")
<\/figure>\n\n\n\nAUD \u2013 RBA Decision next week<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2025\/10\/image-139.png\")
<\/figure>\n\n\n\nCAD \u2013 BoC cuts rates as expected<\/h2>\n\n\n\n
General Comment<\/h2>\n\n\n\n