Suggestions out of the U.S. re: an agreement on the Hamas-held Israeli hostages moving closer and regional bias to sell the USD combined to weigh on the USD in Asia, with continued assessment of the outlook for Fed policy/rate cuts also factoring in.

• The broader BBDXY has breached last week’s base and registered the lowest print since early September in the process, with the USD finding itself at the foot of the G10 FX table.
• Desks flagged comfortably above average interbank activity in the FX space in Asia, pointing to turnover that was 35-40% above the recent norms.
• A bid in the Hang Seng and beta to broader USD performance would have helped the Antipodeans to outperform. A further uptick in oil (linked to supply route worry and continued speculation re: OPEC+ production) would have also helped.
• Meanwhile, the GBP finds itself in the middle of the pack after a weekend barrage of pre-fiscal statement speculation/headline flow.
• The weekend also saw PIMCO reveal long JPY exposure. USD/JPY had a brief look below key support in Tokyo trade, finding a base around Y148.70, before rebounding to Y149.15 last. A break of session lows would expose the Oct 10 base (148.17).
• The broader G10 FX docket is light to start the week, with comments from Fed’s Barkin set to provide the highlights. Various ECB and BoE speakers will cross, but the topics/recency of addresses from the speakers limits the potential for market moving news there. That will leave participants on cross-market/headline watch for much of the day.