FED: FT Echoes Fox’s Gasparino On Wall Street Warnings Of Hassett As Fed Chair

• RES 4: 1.3527 High Oct 1     
• RES 3: 1.3471 High Oct 17 and a key short-term resistance    
• RES 2: 1.3393 50-day EMA
• RES 1: 1.3249/3322 Low Oct 14 / 20-day EMA 
• PRICE: 1.3145 @ 16:25 GMT Nov 3
• SUP 1: 1.3097 Low Oct 31
• SUP 2: 1.3041 Low Apr 14
• SUP 3: 1.2971 1.382 proj of the Sep 17 - 25 - Oct 1 price swing
• SUP 4: 1.2945 50.0% retracement of the Jan 13 - Jul 1 bull leg           

A bear cycle in GBPUSD remains intact and last week’s impulsive sell-off strengthens current conditions. The pair has breached key support at 1.3142, the Aug 1 low. The break confirms a resumption of the downtrend that started Sep 17. Sights are on 1.3041 next, the Apr 14 low. Initial firm resistance is 1.3322, the 20-day EMA.  Note that the trend is in oversold territory, a recovery would allow this condition to unwind.               

RRP usage retreats to $23.792B with 18 counterparties going into month end - from $51.802B Friday. Compares to $2.435B on October 24 (lowest level since mid-March 2021) and the year's highest usage of $460.731B on June 30.

• Fed Funds implied rates hold a reversal of a dovish move on a broadly disappointing ISM manufacturing survey, with subsequent moves with a broader fixed income sell-off that’s hard to pin a driver on.
• Cumulative cuts from an assumed 3.86% effective (after a surprise dip on Friday from 3.87%): 14.5bp Dec, 23bp Jan, 31.5bp Mar, 37.5bp Apr and 52bp June.
• SOFR futures see muted moves on the day, between +0.015 (Z5) and -0.01 (M7-Z7) when looking out to end-2027, with front end outperformance reversing some underperformance last week.
• The terminal implied yield at 3.11% (H7) currently would mark its joint highest close since August.
• Still ahead, possibly notable remarks from Fed Gov. Cook (voter) at 1400ET for her first comments on monetary policy since August when President Trump tried to force her resignation and then fire her in what's been a lengthy legal process.
• SF Fed’s Daly (non-voter) hasn’t moved the needle in her Q&A, noting that Fed officials should “keep an open mind” for the December FOMC with a need to keep pressure on inflation without hurting jobs. The economy is in a good place but is more vulnerable to shocks and she sees more vulnerability in consumer spending data.
• Fed Gov. and CEA’s Miran (voter) meanwhile earlier reiterated that policy remains too restrictive with “neutral quite a ways below”, citing recent signs of stress in credit markets.