Federal Reserve Chair Jerome Powell signaled a lack of urgency regarding monetary policy shifts, appearing to support the Fed’s recent dot plot projection, which indicated two potential quarter-point rate cuts by the end of the year, contingent on economic conditions. This stance boosted the U.S. dollar yesterday, a trend that has continued into today's trading. The greenback strengthened across all G10 currencies and emerging market currencies.
With markets in China, Hong Kong, and South Korea closed due to holidays, regional activity was subdued. U.S. stock index futures showed little movement, while gold stabilized after losing over $23 yesterday, marking its steepest drop in more than a month. After a brief correction over the past two sessions, November WTI crude oil prices slid again today, dropping to nearly $66, their lowest level since September 11.

Asia-Pacific Markets
Expectations of a rate hike by the Bank of Japan (BOJ) this month were already low, and with the announcement of a snap election later this month, they have diminished further. Additionally, recent data indicated easing price pressures and weaker-than-expected industrial output.
The dollar climbed to session highs near JPY144.00, briefly trading above JPY144.50.
The Australian dollar, which had stalled near $0.6940, was pushed down to $0.6900 by the dollar’s rally on Powell’s comments. However, eager buyers quickly drove the Aussie back up to $0.6925. A consolidative tone is emerging in the market today.

European Markets
The eurozone's four largest economies reported September inflation falling below 2%. The aggregate figure dipped by 0.1%, bringing the year-over-year rate down to 1.8% from 2.2% in August, the lowest since June 2021.
In response, the euro fell to around $1.1115 following Powell’s remarks. While dip buyers emerged, the single currency gained less than a fifth of a cent before resuming its decline.

American Markets
Today, at 10:00 a.m. ET, the September ISM manufacturing survey and the JOLTS report on job openings are set to be released, with the final manufacturing PMI arriving shortly beforehand, though it is not expected to significantly impact markets. Job openings are anticipated to have decreased for the third consecutive month, which would match the longest streak of declines since 2008.
In his comments to the National Association for Business Economics yesterday, Powell emphasized the lack of urgency for large rate cuts, suggesting a high threshold for a 50-basis point cut in November. Market expectations for such a cut dropped to about 35%, down from nearly 55%.