<p>Headlines:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/10-year-treasury-yields-retreat-back-below-4-20221101/“>10-year Treasury yields retreat back below 4%</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/dollar-slides-further-amid-strong-bid-in-bonds-20221101/“>Dollar slides further amid strong bid in bonds</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/rbas-lowe-need-to-strike-a-balance-between-doing-too-much-and-too-little-20221101/“>RBA’s Lowe: Need to strike a balance between doing too much and too little</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-lagarde-we-will-have-further-rate-increases-in-the-future-20221101/“>ECB’s Lagarde: We will have further rate increases in the future</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/japans-suzuki-further-sharp-yen-weakening-is-unfavourable-with-inflation-being-an-issue-20221101/“>Japan’s Suzuki: Further sharp yen weakening is unfavourable with inflation being an issue</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/germany-september-import-prices-09-vs-06-mm-expected-20221101/“>Germany September import prices -0.9% vs +0.6% m/m expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/uk-october-nationwide-house-prices-09-vs-00-mm-prior-20221101/“>UK October Nationwide house prices -0.9% vs 0.0% m/m prior</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/uk-october-final-manufacturing-pmi-462-vs-458-prelim-20221101/“>UK October final manufacturing PMI 46.2 vs 45.8 prelim</a></li></ul><p>Markets:</p><ul><li>NZD leads, USD lags on the day</li><li>European equities higher; S&P 500 futures up 0.9%</li><li>US 10-year yields down 13.8 bps to 3.938%</li><li>Gold up 1.3% to $1,653.51</li><li>WTI crude up 1.3% to $87.66</li><li>Bitcoin up 0.5% to $20,525</li></ul><p style=““ class=“text-align-justify“>There was a rumour floating about in Asia trading suggesting that China is looking to take steps to assess a potential move away from its zero-Covid policy. The setting up of a so-called ‚re-opening committee‘ was enough to produce a surging rally in Chinese equities and the positive momentum spilled over into European trading as well.</p><p style=““ class=“text-align-justify“>US futures ticked higher and that set up a buoyant open in Europe, which continued throughout. The mood is also helped by a bid in bonds with Treasury yields slumping heavily during the session, with 10-year yields down back below 4% today.</p><p style=““ class=“text-align-justify“>As such, the dollar was offered with the yen among the strong gainers. USD/JPY fell from 148.40 to 147.00 during the session while EUR/USD advanced from 0.9900 to 0.9947 with large option expiries nearby the top.</p><p style=““ class=“text-align-justify“>The dollar also slumped against the commodity currencies with USD/CAD dipping by 0.6% to 1.3535 and AUD/USD erasing its post-RBA retreat, moving up from 0.6410 to 0.6450 levels.</p><p style=““ class=“text-align-justify“>It is shaping up to be a choppy start to proceedings this week and putting aside the headline from China above, the main focus will be on the Fed tomorrow. That will shape up how things will go for much of the remainder of this year as well.</p>

This article was written by Justin Low at forexlive.com.

<p style=““ class=“text-align-justify“>The dollar is trading to the lows for the day with USD/JPY now close to clipping 147.00, down over 1% at the moment:</p><p style=““ class=“text-align-justify“>There’s a lot at stake this week when it comes to the Fed. The price action today suggests that broader markets are not settled or that traders and investors think something big is coming. Think along the lines of a Fed pivot. That’s the most important narrative that needs to be sorted out as we look towards the FOMC meeting tomorrow.</p><p style=““ class=“text-align-justify“>Sure, the rumour about China setting up steps to re-open is also a big step in the right direction but until there is any real truth to that, the Fed will remain the major focus point this week.</p><p style=““ class=“text-align-justify“>If there is any crack in the resolve by the Fed tomorrow, it’s not that they risk a misstep in the battle against inflation. It is more so that they risk credibility and that is something markets will look to punish. Any slight softening in their messaging will no doubt result in a whopping rally for risk trades.</p><p style=““ class=“text-align-justify“>For the dollar? That might be what signals a top.</p>

This article was written by Justin Low at forexlive.com.