[MARKET ANALYSIS] DXY mildly gains as energy benchmarks lift, GBP awaits PM Burnham

Snapshot: G10s are broadly lower against the USD this morning. GBP leads vs peers, whilst the Swiss Franc is the underperformer. Focus has been on geopolitics, which has been on two fronts. Starting in the Middle East, the Houthis launched a deadly attack on an airport in Saudi’s capital, which could see the US enter on this front. Over in Russia-Ukraine, President Trump announced an “energy ceasefire”, which caught both Ukraine and Russia by surprise. Russia continued its strikes on Ukraine over the weekend. Speaking on the deal, President Zelensky said that he had found out about it through the media, though mentioned that he is ready to sign ceasefire guarantees. Russia has yet to respond. Given the aforementioned geopolitical updates, DXY is a touch firmer this morning, currently holding at the upper end of a 102.10 to 102.32 range. Aside from that, the docket is exceptionally thin, with newsflow also likely to remain light on account of Columbus Day. Attention for the week will remain solely on US CPI on Wednesday, which will be a key report heading into the October confab. Whilst money markets assign only a 20% chance of a hike this month, it could help strengthen tightening bets for later in the year. GBP is the slight outperformer this morning, ahead of PM Burnham’s speech today, where he is expected to speak on improving the UK’s relationship with the EU. Any progress to improving relations with the bloc could likely be seen as a positive for domestic growth, but will be clouded by what specifically the UK must cough up to strike a deal with the EU. The EUR is under mild pressure this morning, in continuation of the action seen last week (speculative net-short position hit its largest since 2020, via CFTC). Downside which was facilitated by ongoing French fiscal woes; the next point of friction will be on October 13th, when lawmakers will formally begin debate on the draft budget. The final vote is scheduled for 20th October.