Economic Indicators - The dollar index (DXY00) increased by +0.20% due to short covering ahead of the FOMC meeting, with the dollar gaining after October JOLTS job openings unexpectedly rose to a 5-month high of 7.670 million, indicating a stronger labor market than the expected decline to 7.117 million [1][3] - The markets are pricing in a 90% chance that the FOMC will cut the federal funds target range by 25 basis points at the conclusion of the upcoming FOMC meeting [3] Currency Movements - The euro (EUR/USD) decreased by -0.11% amid the dollar's strength and weaker-than-expected German trade news, with German October exports rising by +0.1% month-over-month, below the expected +0.2%, and imports falling by -1.2% month-over-month, worse than the anticipated -0.5% [4][5] - The yen (USD/JPY) rose by +0.53%, reaching a 2-week low against the dollar, pressured by comments from BOJ Governor Ueda regarding the pace of increase in long-term Japanese bond yields and the potential for increased bond buying by the BOJ [6]

Core Viewpoint - The dollar index has declined due to weak labor market expectations and concerns over a potential US government shutdown, while the euro has strengthened supported by positive economic indicators and central bank divergence. Group 1: Dollar Performance - The dollar index (DXY00) fell by -0.22% on Monday, influenced by speculation regarding weak US labor market news prompting potential interest rate cuts by the Fed [1] - The dollar's decline was also affected by the risk of a US government shutdown, which is weighing on market sentiment [1] - Despite the decline, the dollar recovered slightly after August pending home sales rose by +4.0% month-over-month, exceeding expectations of +0.4% [2] Group 2: Labor Market and Fed Outlook - The September Dallas Fed manufacturing activity survey unexpectedly fell by -6.9 to -8.7, indicating weaker manufacturing activity than anticipated [3] - Comments from Fed officials were mixed, with New York Fed President suggesting a lower interest rate stance due to receding inflation risks, while Cleveland Fed President indicated inflation may not reach the Fed's 2% target until late 2027 or early 2028 [4] - Markets are pricing in an 89% chance of a -25 basis point rate cut at the next FOMC meeting on October 28-29 [4] Group 3: Euro Performance - The EUR/USD rose by +0.23% on Monday, driven by a weaker dollar and supportive economic news from the Eurozone [5] - The Eurozone's September economic confidence index unexpectedly rose by +0.2 to 95.5, surpassing expectations of 95.3, which bolstered the euro [6] - ECB Governing Council member Makhlouf stated that the ECB is "near the bottom" of its rate-cutting cycle, indicating a more hawkish stance compared to the Fed [7]