Markets are quiet but stable this morning after the massive rally in risk last week following the FOMC rate decision, the subsequent press conference with Fed Chair Powell, and Friday’s lower-than-expected headline US payrolls data.

Over the course of last week, the S&P 500 rallied almost 6%, US 10-year Treasury yields dropped over 30 basis points, and the USD fell almost 1.75% across a basket of currencies, with all of these asset classes close-to-flat on the day this morning. While the news of the Fed keeping rates unchanged last week was expected, the tone of Fed Chair Powell’s press conference was interpreted by the greater market as an end to rate hikes. He reiterated the “higher for longer” premise but even that was brushed off as odds that rate cuts would begin earlier increased as per Fed Fund futures. Capping this sentiment was slower headline US payrolls growth on Friday, a dovish indication implying slower economic growth (although Average hourly earnings ticked higher on a year-over-year basis.)

As with all large moves, there is plenty of skepticism abound. Some analysts have called these moves a “bear market rally” and Warren Buffet’s Berkshire Hathaway announced its largest ever cash position at $157 billion in the latest quarter as it finds a lack of investment opportunities.

Given the lack of major data this week, all eyes will be on numerous Fed official speeches for further color into last week’s decision, as per below:

Monday: Fed’s Cook speaks

Tuesday: Canada Ivey Index, Eurozone PPI, Brazil Central Bank Meeting Minutes. Fed’s Kashkari, Barr, Schmid, Waller Williams, and Logan speak.

Wednesday: US Mortgage Applications, Bank of Canada Meeting Minutes, Eurozone Retail Sales. Fed’s Powell, Cook, Barr, and Jefferson speak

Thursday: US Initial Jobless Claims, Mexico CPI, Mexico Rate Decision. Fed’s Powell, Bostic, and Barkin speak.

Friday: US UMich Indices, United Kingdom GDP. Fed’s Logan and Bostic speak.

EUR/USD is slightly higher on the day, extending a 2.25% rally from last week’s lows. While German factory orders rose unexpectedly in September, a consecutive gain, this move appears to be exclusively based on USD weakness. While publicly the ECB’s concern has been inflation-focused, Eurozone growth slowdown has certainly been on the radar as well. Tuesday’s PPI data will provide some additional color on this debate.

USD/CAD is slightly lower this morning, extending an-almost 2% drop from last week’s highs. While the USD was the primary mover, Canada’s own employment figures also came in lower than expected, and hourly wage figures dropped as well. Combining this dovish data with the 5% drop in oil prices from last week as well as the lower GDP data from Tuesday, there isn’t a particularly bullish case for the CAD. Nonetheless, USD weakness continues to lead the way.

GBP/USD is higher on the day, extending an almost 3% gain from last week’s lows, even as some analysis shows that the United Kingdom is likely already in a recession. Growth concerns in the UK have swelled as of late, topping those of in the European Union. Inflation has remained higher than peers and stagflation concerns have dominated many conversations. While the pair has moved significantly higher on the back of a weaker USD, Friday GDP print will provide some insight into the scale of economic growth concerns.

USD/MXN is close-to-unchanged on the day as last week’s 3.5% move lower breached the 200-day moving average for the first time since early October. While the Peso has certainly been at the mercy of the USD, Mexican October CPI and the next Banxico rate decision due this Thursday may take over as the leading market movers. The Central Bank of Mexico is expected to keep rates unchanged at 11.25%.

USD/BRL is slightly lower on the day, extending the 3.5% move lower from last week’s highs. The Brazilian central bank voted to cut rates 50 basis points as expected last week to 12.25%, still amongst the highest. Politically, the focus this week will be on continued concerns about the Lula da Silva administration’s push to change the government’s zero fiscal deficit target in 2024. Data-wise, the central bank’s meeting minutes will be released for further insight into last week’s decision.