OPTIONS: Expiries for Dec01 NY cut 1000ET (Source DTCC)
- EUR/USD: $1.1525(E2.7bln), $1.1600(E1.5bln), $1.1795(E1.5bln)
- USD/JPY: Y155.00($744mln)
- GBP/USD: $1.2950(Gbp714mln)
- AUD/USD: $0.6550(A$522mln)
- USD/CAD: C$1.4025-30($1.1bln), C$1.4050($642mln)
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US: Speaker Johnson Won't Bring House Back To Pass New CR As Shutdown Continues
House Speaker Mike Johnson (R-LA) has ruled out bringing the House of Representatives, which has been recessed for 40 days, back into session to pass a new funding bill.
- Johnson told reporters, "Wouldn't that be a futile exercise when we have a CR that's been sitting over there since Sept. 19? If I brought the House back and we passed another CR, it would meet the exact same fate from [Senate Minority Leader] Chuck Schumer [D-NY]. He would mock it, they would spike it, and they would try to blame it on us. So, what would be the point of that?"
- Senate Majority Leader John Thune (R-SD) indicated to reporters yesterday that bipartisan talks have “picked up”, but there doesn’t appear to be an immediate offramp out of the shutdown as the two sides remain dug in on healthcare.
- Thune is likely to recess the Senate after a 14th vote on the House-passed CR on Thursday. The shutdown will enter its 35th day on Tuesday, November 4, equalling the record for the longest ever US government shutdown.
- According to Polymarket, the most likely shutdown end date is November 23. That is beyond the timeframe for the Continuing Resolution passed by the House in late September, which extends funding until November 21.
Figure 1: When will the Government Shutdown End?
- Source: Polymarket
EGBS: 10-year BTP/Bund Spread Ignoring Pullback In Euro Equities
This afternoon’s pullback in European equity futures has not spilt over into the 10-year BTP/Bund spread. A stronger-than-expected set of Italian GDP data tomorrow could set the stage for a fresh round of tightening, with the 70bp figure the next downside target.
- The spread has been steadily grinding lower since yesterday morning, now at a fresh year-to-date (and multi-year) low of 76bps.
- Note that EUR 3m10y vol has also moved to its lowest since Q4 2021, fully unwinding the modest uptick seen in the first two weeks of October. BTPs remain a popular vehicle for carry trades, which are favoured in lower vol environments.
- Note that our latest Europe Pi publication saw BTP futures remain in their habitual “very long” territory. See here for more: https://media.marketnews.com/MNI_P28102025_e9a1a7977a.pdf
- Consensus sees Italian Q3 flash GDP at 0.1% Q/Q (vs -0.1% prior). The September unemployment rate is also due tomorrow, with analysts expecting an unchanged reading of 6.0%.
MACRO ANALYSIS: Eurozone Macro Developments Since The Last ECB Decision
Download Full Report Here
One of the more notable recent updates were surprisingly strong PMIs in the flash October report on Friday, supporting prior ECB arguments about the resilience of economic growth. Inflation meanwhile has come in largely as expected, albeit with some recent softer services momentum vs an acceleration in core goods momentum. The timing of the meeting does however come at an awkward time for digesting latest trends. Flash Q3 national accounts and September unemployment for the Eurozone are released on the day of the ECB decision along with Germany and Spain October HICP inflation, before Eurozone wide HICP inflation for October and German retail sales for September are released the day after the decision.
- Growth: Resilient But Tepid Hard Data Before Recent PMI Optimism
- Inflation: ECB Confidence In Its Forecast Intact
- Labour Market: Unemployment Rate Close To Lows, Wages Remain On Cooling Track
