SNB: Press conference seems to be more collaborative than the Jordan era

GBP/USD's break lower Tuesday extends the pullback off the late September high to ~4.75%, trimming the YTD gains in the pair to just 0.5%. USD strength clearly the driver here, with the re-opening of US rates after yesterday's holiday allowing US yields to drift higher and underpin the greenback once again.

• The currency failed to find support from this morning's wages numbers, allowing EUR/GBP to continue to straddle the 0.83 handle - a key long-term level. Should the cross recover off these lows, GBP/USD could come under further pressure, prompting markets to consider medium-term support.
• Today's spot weakness has pressed GBP/USD below the 200-dma on an intraday basis for the first time since May, after the level held well as support in August. 1.2799 undercuts as modest support, but seen stronger into 1.2665.
• Bailey's appearance at Mansion House this week provides the key risk event, who speaks alongside Chancellor Reeves - however it would be unusual for him to mark a notably different tone on monetary policy. Read more here: https://marketnews.com/boe-upcoming-mpc-speakers-1-2

Little new from ECB Governing Council member Rehn as he tells BBG TV that the Bank is data-dependent, not datapoint-dependent, reiterating the central message of President Lagarde and alluding to the likelihood of another rate cut in December.

• He also reiterated that the direction of travel for the Bank’s policy settings is clear, with the speed of easing dependent on the evolution of the data, suggesting that the Bank may leave “restrictive” territory in spring ’25.
• He attributed the deterioration of Eurozone growth to the manufacturing sector, a widely known issue/fact, with the growth slowdown clearly contributing to his view on the need for cuts (aided by disinflation being “well on track”).
• Sticky services inflation was once again highlighted as a worry, with Rehn placing more focus on that issue than wage growth at present.
• He also warned against the inflationary impact of tariffs/a trade war after Donald Turmp’s victory in the U.S. election.
• No tangible movement in EUR STIRs around the time he spoke, leaving ECB-dated OIS roughly around levels that we flagged earlier today (detailed below).