[MARKET ANALYSIS] USD mildly firmer, whilst EUR digests regional unrest; AUD benefits from strong Chinese data

G10s are mixed against a firmer USD. The Aussie holds towards the top of the pile, benefiting from strong Chinese activity data. The Loonie also outperforms, with Trump touting an “amazing” deal with Canada, at some point. To the downside resides the EUR, which digests ongoing civil unrest in France.  DXY started the London session flat, but gradually moved higher as the morning progressed; currently sits at the upper end of a 101.76 to 102.08 range. The US data docket is light for the day, and remains that way for the remainder of the week; the Fed is on blackout ahead of next week’s confab, where rates are expected to remain on hold. Money markets assign a 14% chance of a hike next week; 75% chance of a hike in December. The pressure in the index seen last week was partly due to tech sell-off, and debt concerns surrounding AI spending. This appears to have abated at the start of this week, with CoreWeave +1.8% in pre-market trade. Given that the data and speaker docket is light this week, USD action will likely be dictated by the AI theme (Mag-7 earnings due this week), some also bring attention to Taiwan chip exports to signal a top in equities (due tomorrow). EUR/USD is currently underperforming vs peers; it fell beneath the 1.12 mark, to currently trade at the midpoint of a 1.1182-1.1234 range. Pressure potentially factors in the civil unrest in France, with protests reportedly causing damages of “hundreds of millions of euros”, in the region. As such, the OAT-Bund spread has once again widened to c. 144bps (vs recent peaks of 151bps). The Aussie is the clear outperformer this morning, taking positive leads from strong Chinese Activity Data overnight. In brief, Q3 GDP, Industrial Production and Retail Sales all topped forecasts; figures which lessen the odds of further near-term stimulus within the region. Nonetheless, the PBoC Governor has been on the wires this morning, where he mentioned that "we will launch a liquidity support tool for large-scale redemptions by non-bank institutions". More interestingly is that the Governor mentioned that the open market overnight reverse repo rate will correspondingly become the main policy rate. A change, which in theory, allows the PBoC greater control over policy and improves the stability of the CNY. Whilst no move was seen on the announcement itself, CNY will likely take positive leads from improving regional data and the shift in the PBoC’s framework. USD/CNY currently holds at the bottom end of a 6.6805 to 6.6862 range.