The USD is trading narrowly mixed on the session so far, with equity markets edging a little higher while major bond markets are a little softer.

US Treasurys are underperforming, giving the USD some mild support. Treasurys caught a bid off of headlines out of the Middle East (a US drone was shot down) and the 10Y yield ended with the lowest daily close since September 22 near 4.50%.

Yields have edged a bit higher again this morning, with markets perhaps focused on today’s event risk (Fed speakers).

We got little from the top Fed speakers yesterday, with neither Powell nor Williams commenting on the outlook.

EUR/USD - The EUR is a relative underperformer on the session, easing 0.2% on the USD. Soft Chinese data and some widening in Eurozone/US spreads are combining to pull spot back. ECB policy makers continue to push back on market pricing for rate cuts early next year (75% probability of a 25bps cut is reflected in the April OIS) but the comments had little impact on spot.

GBP/USD - Four days of consecutive losses for the GBP are showing scant signs of slowing or reversing. Sterling is a little lower on the session. BoE economist Pill said that rates were restrictive enough to bear down on inflation but policy needed to remain tight to achieve the BoE inflation target.

USD/CAD - The CAD is a moderate outperformer on the session by virtue of holding little changed on the USD overnight. Yesterday’s BoC’s summary of deliberations for the October policy decision delivered a bit more bite than we are used to seeing with this release. The content sounded more hawkish on the face of it than the policy statement/ press conference last month where inflation concerns were balanced by a nod to slowing growth.

Yesterday’s summary dwelt on the “considerable concern” around core inflation, noted that some senior policy makers thought that rates would need to rise again and mulled over the potential for the neutral rate to drift higher. The messaging has tempered market expectations for rate cuts next year (April pricing for around 12bps yesterday has been cut back to around 8bps of easing today.