Altcoin Leverage Surges Ahead of Fed Decision, Raising Volatility Risks

Economic

Cryptocurrency

Summary:

Traders are significantly increasing leveraged positions on altcoins ahead of a crucial Federal Reserve policy announcement this week, a move that may spark heightened volatility in crypto markets...

Rising Leverage in Altcoins

Open interest for altcoins has surged from $30 billion on September 1 to $38.6 billion as of Monday, now approaching Bitcoin’s $40 billion and surpassing Ethereum’s $30 billion, according to Coinalyze. While open interest alone does not predict price direction, it signals that sophisticated traders are positioning ahead of the Fed’s expected rate cut.

Stephen Gregory, founder of crypto trading platform Vtrader, noted that the increase in altcoin leverage reflects traders’ anticipation of an “alt season,” with funds temporarily rotating out of Bitcoin into altcoins in the short term.

Potential Market Dynamics

Gregory cautioned that larger traders may attempt to “front run” the Fed’s anticipated rate cut on Wednesday, which could trigger complex dynamics: retail investors may interpret the cut as bullish, while whales could leverage shorts to force liquidation events.

Shawn Young, chief analyst at MEXC Research, highlighted rising one-week at-the-money implied volatility and 25-delta skews as indicators of expected short-term price fluctuations. Traders should prepare for heightened activity and adjust strategies to navigate potential volatility.

Macro Context

The Fed faces pressure from President Donald Trump and Treasury Secretary Scott Bessent, who have publicly called for substantial rate cuts, even urging Fed Chair Jerome Powell’s resignation at times this year. This political backdrop contributes to uncertainty in both traditional and crypto markets, amplifying the stakes for leveraged trading positions.

In summary, crypto markets are entering a potentially turbulent period, with altcoin leverage surging and the Fed’s policy decision poised to be a catalyst for significant short-term volatility.

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Risk Warnings and Disclaimers

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Gerik

Economic

Canadian Canola Redirected to Vietnam

Three traders attending an international industry conference in Jakarta said that Vietnamese feed mills have been importing around 30,000 metric tons of Canadian canola meal per month over the past few months. While this volume is smaller than what China previously bought, it represents an opportunity for Vietnamese companies to take advantage of discounted prices.

Currently, Vietnamese feed makers are paying around $220 per metric ton, including cost and freight, compared to $300–310 per ton that Chinese buyers paid before the duties were imposed in March.

Reason for the Shift

China, the world’s largest importer of canola, imposed preliminary anti-dumping duties of 75.8% on Canadian canola seed in August, following a 100% retaliatory tariff on Canadian rapeseed meal and oil, effective March 20. Many shipments that arrived in China after the 100% duty took effect are now stuck in bonded warehouses. Trading companies are seeking to redirect these shipments to Vietnam to avoid the high duties.

Up to 400,000 metric tons of canola meal are currently held in secure warehouses near Chinese ports, where importers would face a 100% tariff if released into the domestic market. Redirecting this supply to Vietnam offers a temporary solution to move the stock and reduce financial risk.

Impact and Outlook

Although Vietnam’s demand is smaller than China’s, traders expect more deals in the coming months. This presents an opportunity for Vietnamese feed producers to lower their input costs, while Canada can access alternative markets for its excess supply.

Ongoing discussions between Canadian and Chinese officials regarding the duties continue, but redirecting shipments to Vietnam serves as an effective short-term workaround for both sides.

Source: Reuters

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IC Markets

Commodity

Forex

Economic

What happened in the Asia session?

The Asia trading session on September 16, 2025, was dominated by optimism surrounding expected Federal Reserve rate cuts, which drove major stock indices to historic highs in Japan and South Korea. However, China’s disappointing economic data served as a reminder of underlying regional challenges. The combination of Fed dovishness, improving US-China trade dynamics, and strong corporate earnings supported risk assets, while safe-haven flows into gold reflected ongoing global uncertainties.

What does it mean for the Europe & US sessions?

Today’s trading environment is dominated by Fed expectations, with traders positioned for the first rate cut of 2025. While markets appear confident in a 25bp reduction, the real focus will be on Fed guidance for future policy paths. Economic data, particularly retail sales, will provide insights into consumer resilience amid this monetary policy transition. The combination of dovish Fed expectations, record-low yields, and geopolitical uncertainties creates a complex backdrop requiring careful risk management across all asset classes.

The Dollar Index (DXY)

The US Dollar faced its most significant challenge in months on September 16, 2025, as a confluence of factors – including dovish Fed expectations, intensifying political pressure from President Trump, and technical selling momentum – pushed the currency to multi-month lows. With the Fed’s rate cut decision virtually certain, focus has shifted to the magnitude of the reduction and forward guidance about future policy moves. The dollar’s near-term trajectory will likely depend on the Fed’s ability to balance economic data with political pressures while maintaining its independence, alongside upcoming economic indicators that could either support or challenge the current dovish narrative.Central Bank Notes:

● The Federal Open Market Committee (FOMC) voted, by majority, to lower the federal funds rate target range by 25 basis points to 4.00%–4.25% at its September 16–17, 2025, meeting, marking the first policy rate adjustment since December 2024 after five consecutive holds.

● The Committee maintained its long-term objective of achieving maximum employment and 2% inflation, acknowledging recent labor market softening and continued tariff-driven price pressures.

● Policymakers expressed elevated concern about downside risks to growth, citing a stalling labor market, modest job creation, and an unemployment rate drifting up toward 4.4%. At the same time, inflation remains above target, with CPI at 3.2% and core inflation at 3.1% as of August 2025; higher energy and food prices, largely attributable to tariffs, continue to weigh on headline measures.

● Although economic activity expanded at a moderate pace in the third quarter, the growth outlook has weakened. Q3 GDP growth is estimated near 1.0% (annualized), with full-year 2025 GDP growth guidance revised to 1.2%, reflecting slowing household consumption and tighter financial conditions.

● In the updated Summary of Economic Projections, the unemployment rate is projected to average 4.5% for the year, with headline PCE inflation revised up slightly to 3.1% for 2025. The Committee anticipates core PCE inflation to remain stubborn, requiring sustained vigilance and a flexible approach to risk management.

● The Committee reiterated its data-dependent approach and openness to further adjustments should employment or inflation deviate meaningfully from current forecasts. Several members dissented, either advocating a larger 50 basis point cut or preferring no adjustment at this meeting, revealing heightened divergence within the Committee.

● Balance sheet reduction continues at a measured pace. The monthly Treasury redemption cap remains at $5B and the agency MBS cap at $35B, as the Board aims to support orderly market conditions in the face of evolving global and domestic uncertainty

● The next meeting is scheduled for 28 to 29 October 2025.

Next 24 Hours BiasMedium Bearish

Gold (XAU)

Gold’s record-breaking performance on September 16, 2025, reflects a confluence of supportive factors, including near-certain Fed rate cut expectations, US dollar weakness, robust ETF inflows, and ongoing geopolitical tensions. While central bank purchases have moderated due to high prices, they remain positive, and technical indicators suggest further upside potential toward the $3,700-$3,800 range. The metal’s 43% year-to-date gain underscores its continued appeal as both an inflation hedge and safe-haven asset in an environment of monetary policy uncertainty and global instability.Next 24 Hours Bias Strong Bullish

The Euro (EUR)

The Euro demonstrated resilience on September 16, 2025, reaching $1.1778 despite significant regional challenges. The ECB’s hawkish pivot, signaling an end to rate cuts, provided fundamental support for the currency. However, persistent concerns remain around France’s fiscal crisis, German economic weakness, and escalating trade tensions with both the US and China.Central Bank Notes:

● The Governing Council kept the three key ECB interest rates unchanged at its September 11, 2025, meeting. The main refinancing rate remains at 2.15%, the marginal lending facility at 2.40%, and the deposit facility at 2.00%. These levels have been maintained after the cuts earlier in 2025, reflecting the Council’s confidence that the current stance is consistent with the price stability mandate.

● Evidence that inflation is running close to the ECB’s medium-term target of 2% supported the decision to hold rates steady. Domestic price pressures are easing as wage growth continues to moderate, and financing conditions remain accommodative. Policymakers reaffirmed a data-dependent, meeting-by-meeting approach to further policy moves, with no pre-commitment to a predetermined path amid ongoing global and domestic risks.

● Eurosystem staff projections foresee headline inflation averaging 2.0% for 2025, 1.8% for 2026, and 2.0% in 2027. The 2025 and 2026 forecasts reflect a downward revision, primarily on lower energy costs and exchange rate effects, even as food inflation remains persistent. Core inflation (excluding energy and food) is expected at 2.0% for both 2026 and 2027, with only minor changes since prior rounds.

● Real GDP growth in the euro area is projected at 1.1% for 2025, 1.1% for 2026, and 1.4% for 2027. A robust first quarter—partly due to firms accelerating exports ahead of anticipated tariff hikes—cushioned a weaker outlook for the remainder of 2025. While business investment continues to face uncertainty from ongoing global trade disputes, especially with the US, government investment and infrastructure spending are expected to provide some support to the outlook..

● Household spending is backed by rising real incomes and continued strength in the labor market. Despite some fading tailwind from previous rate cuts, financing conditions remain broadly favorable and are expected to underpin the resilience of private consumption and investment against outside shocks. Moderating wage growth and profit margin adjustments are helping to absorb residual cost pressures.

● All future interest rate decisions will continue to be guided by the integrated assessment of economic and financial data, the inflation outlook, and underlying inflation dynamics, and the effectiveness of monetary policy transmission—without any pre-commitment to a specific future rate path.

● The ECB’s Asset Purchase Programme (APP) and Pandemic Emergency Purchase Programme (PEPP) portfolios are declining predictably, as reinvestment of maturities has ceased. Balance-sheet normalization continues in line with the ECB’s previously communicated schedule.

● The next meeting is on 29 to 30 October 2025

Next 24 Hours BiasWeak Bullish

The Swiss Franc (CHF)

The Swiss Franc enters mid-September 2025 from a position of considerable strength, supported by safe-haven flows, contained inflation, and Switzerland’s economic stability. While the upcoming SNB meeting on September 25 is expected to maintain current policy settings, the central bank’s new transparency measures signal an important communication evolution. US trade tensions remain a significant economic challenge, though Switzerland’s diversified economy and the franc’s reserve currency status continue to provide resilience in an uncertain global environment.Central Bank Notes:

● The SNB eased monetary policy by lowering its key policy rate by 25 basis points, from 0.25% to 0% on 19 June 2025, marking the sixth consecutive reduction.

● Inflationary pressure has decreased further as compared to the previous quarter, decreasing from 0.3% in February to -0.1% in May, mainly attributable to lower prices in tourism and oil products.

● Compared to March, the new conditional inflation forecast is lower in the short term. In the medium term, there is hardly any change from March, putting the average annual inflation at 0.2% for 2025, 0.5% for 2026, and 0.7% for 2027.

● The global economy continued to grow at a moderate pace in the first quarter of 2025, but the global economic outlook for the coming quarters has deteriorated due to the increase in trade tensions.

● Swiss GDP growth was strong in the first quarter of 2025, but this development was largely because, as in other countries, exports to the U.S. were brought forward.

● Following the strong first quarter, growth is likely to slow again and remain rather subdued over the remainder of the year; the SNB expects GDP growth of 1% to 1.5% for 2025 as a whole, while also anticipating GDP growth of 1% to 1.5% for 2026.

● The SNB will continue to monitor the situation closely and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.

● The next meeting is on 25 September 2025.

Next 24 Hours BiasMedium Bullish

The Pound (GBP)

Sterling’s strength on Tuesday reflects broad US Dollar weakness ahead of the Fed’s anticipated rate cut, despite concerning domestic economic fundamentals. While the Pound benefits from relative outperformance against other major currencies, underlying challenges include stagnant growth, elevated inflation, and a cautious Bank of England. The combination of a dovish Fed and resilient UK inflation expectations continues to support Sterling in the near term, though technical resistance levels and domestic economic headwinds present potential challenges ahead.Central Bank Notes:

● The Bank of England’s Monetary Policy Committee (MPC) voted on 7 August 2025 by a majority (exact split likely 5–3–1 or similar, based on expectations) to cut the Bank Rate by 25 basis points to 4.00%. Multiple members supported the move, citing fragile economic growth and signs of disinflation, while others preferred a larger reduction, and at least one member voted to hold the rate steady due to concerns about persistent inflation.

● The Committee unanimously decided to continue reducing the stock of UK government bond purchases held for monetary policy purposes by £100 billion over the next 12 months, targeting a balance of £558 billion by October 2025. As of 7 August, the gilt stock stands at £590 billion.

● Disinflation has been substantial since 2023 owing to policy tightening and the fading of external shocks. However, an unexpected uptick in headline CPI inflation—to 3.6% in June—reflects pass-through from regulated prices and earlier energy price rises, as well as signs of sticky core inflation.

● Headline CPI inflation is now 3.6%, above the Bank’s 2% target, reflecting regulated and energy price effects. The Committee expects inflation to remain around this level through Q3 before resuming its downward trend into 2026.

● UK GDP growth remains weak. Business and consumer surveys point to lackluster activity, and the labor market continues to loosen, with increasing evidence of slack. Wage growth has softened but remains above pre-pandemic norms.

● Pay growth and employment indicators have moderated further, and the Committee expects a significant slowing in pay settlements over the rest of 2025.

● Global uncertainty remains elevated, especially with rising energy prices and supply disruptions linked to conflict in the Middle East and renewed trade tensions. These factors prompt the MPC to remain vigilant in monitoring cost and wage shocks.

● The risks to inflation are considered two-sided. With the outlook for growth subdued and inflation persistence less clear, the Committee argues that a gradual and careful approach to further easing is warranted, with future policy decisions highly data-dependent.

● The Committee’s bias is still towards maintaining monetary policy at a restrictive stance until there is firmer evidence that inflation will return sustainably to the 2% target over the medium term. Further adjustments to policy will be decided on a meeting-by-meeting basis, with scrutiny of developments in demand, costs, and inflation expectations.

● The next meeting is on 18 September 2025.Next 24 Hours BiasMedium Bullish

The Canadian Dollar (CAD)

Tuesday’s developments reflect a Canadian dollar caught between supportive factors like higher oil prices and manufacturing resilience, versus significant headwinds from labor market deterioration and expected monetary easing. The currency’s performance in the coming days will largely depend on the Bank of Canada’s communication strategy and whether policymakers signal a prolonged easing cycle. With both the BoC and Fed expected to cut rates on Wednesday, the relative magnitude and forward guidance from each central bank will be crucial for the USD/CAD direction.Central Bank Notes:

● The Bank of Canada maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70% as of July 30, marking the third consecutive meeting with rates on hold.

● The Council cited ongoing U.S. tariff adjustments and unresolved trade negotiations as key drivers of elevated economic uncertainty. The persistence of tariffs at levels well above those of early 2025 continues to present downside risks to growth and keeps inflation expectations elevated, supporting a cautious approach to monetary easing.

● The lack of a clear U.S. policy path, plus frequent threats of additional tariffs, led the Bank to highlight risks to Canadian exports and broader demand, amplifying uncertainty about future growth.

● Canada’s economic growth in the first quarter came in at 2.2%, slightly stronger than the original forecast, while the composition of GDP growth was largely as expected. Consumption slowed from its very strong fourth-quarter pace, but continued to grow despite a large drop in consumer confidence.

● Canadian GDP growth is expected to be near 0% in Q2 2025, closely aligned with the more optimistic scenario outlined earlier in the year. Weakness in manufacturing activity—driven by both U.S. trade disruptions and sector-specific challenges like wildfires—contributed to softer output. A partial recovery is anticipated in Q3 due to rebuilding efforts and stronger retail sales in June.

● Consumer spending slowed, especially as households front-loaded durable goods purchases ahead of tariffs. Housing activity remains subdued, with resales and construction still soft despite some government tax relief measures.

● Headline CPI inflation continued to ease, holding close to 1.7% in June, aided by declines in energy prices following the removal of the fuel charge. However, the Bank’s measures of core inflation and underlying price pressures moved up further due to higher import costs from tariffs and lingering supply disruptions.

● The Governing Council reiterated that it will carefully weigh ongoing upward inflation pressure from tariffs and cost shocks against the gradual downward pull from economic weakness. While additional rate cuts remain possible, timing and scale will depend on trade policy developments and inflation’s path.

● The next meeting is on 17 September 2025.

Next 24 Hours BiasMedium Bearish

Oil

Oil markets on September 16, 2025, are caught between conflicting forces. While immediate supply disruption risks from Ukrainian attacks on Russian infrastructure and anticipated Federal Reserve rate cuts are providing near-term price support, fundamental market conditions point to significant oversupply ahead. The EIA’s projection of massive inventory builds and OPEC+’s continued production increases suggest substantial downward price pressure through 2026, with Brent potentially falling to $50 per barrel despite current geopolitical tensions. The market is essentially pricing in short-term disruption risks while bracing for longer-term oversupply challenges.

Next 24 Hours BiasWeak Bearish

Source: IC Markets

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Economic

Commodity

Accelerating Decline Rates

According to the IEA, global oil and gas fields are depleting faster than before. The average annual post-peak decline rates are 5.6% for conventional oil and 6.8% for conventional natural gas. These rates have risen significantly over the past decade, reflecting the shift to less mature, technically challenging resources such as shale and deep offshore deposits.

Without sustained investment, the world could lose the equivalent of Brazil and Norway’s combined oil output every year, highlighting the critical importance of maintaining upstream activity.

Investment Mostly Offsetting Decline

IEA Executive Director Fatih Birol emphasized that nearly 90% of upstream investment goes toward replacing declining output rather than meeting new demand. This “decline offset” dominates oil and gas capital expenditures globally, making decline rates a central factor in planning and policy discussions.

If investment were to halt, oil supply could shrink by 5.5 million barrels per day annually, up from around 4 million bpd in 2010. For natural gas, annual losses would rise to 270 billion cubic metres (bcm), up from 180 bcm a decade ago.

By 2024, approximately 80% of global oil production and 90% of natural gas production came from fields that had already passed peak output. This aging production base underscores why companies must continually invest in maintenance, enhanced recovery, and new field development just to sustain current supply levels.

Implications for Markets and Policy

The accelerated decline of conventional resources poses risks for energy security, market volatility, and pricing. It also intensifies the tension between investment in fossil fuel production and global climate targets. The IEA has faced criticism from U.S. policymakers for its growing focus on clean energy, highlighting the broader geopolitical and policy challenges tied to the energy transition.

As decline rates climb, balancing the twin goals of energy security and climate commitments will become increasingly complex, requiring careful strategic planning by producers, investors, and governments worldwide.

Source: Reuters

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Pepperstone

Economic

Forex

Unemployment held steady at 4.7% in the three months to July, for the third month running, though one must continue to interpret the figures with some degree of caution, as the data remains plagued by numerous quality issues.

Earnings growth, meanwhile, remains at a pace incompatible with a sustainable return to the 2% inflation target. Overall pay rose 4.7% YoY in July, while regular pay rose 4.8%, the latter metric dipping below 5% for the first time since the middle of 2022

Turning to the more timely PAYE payrolls metric, data pointed to payrolled employment having fallen by a relatively modest 8k in August, though this still marks the 7th straight monthly decline in payrolls, while also meaning that payrolled employment has now fallen in every month, bar one, since the Budget last year.

Taking a step back, while the employment backdrop looks to have stabilised a touch, risks overall remain tilted to the downside, not only as broader economic momentum remains anaemic at best, but also as the 26th November Budget looms, with uncertainty in the run up to Chancellor Reeves's announcement likely to keep a lid on business activity for the time being.

The figures are also unlikely to meaningfully alter the near-term Bank of England policy outlook, with Bank Rate set to be maintained at 4.00% in a 7-2 vote this Thursday; the MPC will have had advanced sight of today's data in any case. The next 'live' MPC meeting shan't come until November where, providing the current 'gradual and careful' guidance is maintained this week as expected, a 25bp cut remains the base case. That, though, hinges almost entirely on the inflation outlook, most importantly the September CPI print due 22nd October, where a print at, or below, the BoE's current peak 4% forecast will be required in order for further easing to remain on the cards this year.

Source: Pepperstone

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Commodity

Record Exports Defy Predictions

China is on track to export between 115 and 120 million metric tons of steel in 2025, marking a 4% increase from last year. Analysts had initially expected exports to fall due to unprecedented global trade barriers. The surge reflects both domestic overcapacity China’s steel consumption peaked in 2020 amid the property market collapse and the urgency among steelmakers to move metal before additional restrictions take effect.

To sustain exports, Chinese steelmakers are pivoting toward emerging markets with lower trade barriers, including the Middle East, Central Asia, and North Africa. Baosteel, China’s largest listed steelmaker, projects 10 million tons of exports to these regions this year. Exports to Saudi Arabia, Malaysia, and Thailand rose 24%, 14%, and 13%, respectively, in the first seven months of 2025, even as shipments to Vietnam and South Korea fell due to anti-dumping measures.

Another strategy has been a product shift from higher-value finished steel to lower-value semi-finished products, such as steel billets and rebar, which face fewer tariffs. Billet exports tripled in the first seven months, while rebar shipments rose 77%. Meanwhile, hot-rolled thin steel, frequently targeted by tariffs, declined 23%. Despite higher volumes, the export value fell slightly, reflecting this move toward less complex products.

Trade Tensions and Government Concerns

China’s export drive risks provoking further protectionist measures. Since 2024, 54 tariffs and trade barriers have been imposed on Chinese steel more than in the preceding five years combined. The European Union and Mexico have signaled additional restrictions, while domestic authorities are concerned that exporting low-value products could undermine long-term competitiveness. Beijing is reportedly considering higher export taxes to encourage value-added production.

While 2025 may set a record, analysts expect China’s steel exports to peak this year or next. Forecasts for 2026 suggest a decline to 100–105 million tons, though even this level would surpass the output of most steel-producing nations except India. Rising trade disputes, protectionist policies, and saturated overseas markets are likely to constrain further growth.

As Baosteel’s general manager Baojun Liu stated, “As a steel company at the current scale, we must export,” highlighting the tension between corporate imperatives and evolving trade realities.

China’s record steel exports underscore the global interdependence of supply chains and the fragility of international trade policies. While short-term volume growth alleviates domestic overcapacity, the shift toward semi-finished products may increase tensions with trade partners, potentially accelerating protective measures that could reshape the global steel market.

Source: Reuters

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Stocks

Forex

Political

Economic

WHERE WE STAND – Markets began the new trading week, yesterday, in a very similar vein to how we finished the last, amid a broad lack of conviction across the board, in a continuation of the ‘calm before the storm' vibe that we saw on Friday.At risk of repetition, the cagey and tentative nature of trade makes a lot of sense considering that the week ahead brings 5x G10 central bank decisions, plus a ton of impactful economic data releases. With such a packed slate of event risk looming large, it makes sense to see participants taking down position size, or even choosing to sit on the sidelines altogether.

The lack of impactful news- or data-flow through the day certainly didn't give participants much reason to enter the fray either, besides a brief wobble in risk on news that China have found Nvidia to be violating anti-monopoly laws. Quite why this matters, though, when the Nvidia assume no sales to China in their guidance, and when China are advising firms not to buy Nvidia chips anyway, is beyond me. Still, I struggle to turn my laptop on most mornings, so perhaps am not best placed to comment on the tech sector!

Speaking of Nvidia, though, I did some digging yesterday, given that endless common inches seem to be getting taken up recently on the issue of equity market concentration, and narrow market breadth. For all that brouhaha, the best performing ‘Magnificent Seven' stock this year – Nvidia – is only the 58th best performer in the S&P 500 at large. That hardly screams that we should be panicking about a tightly concentrated market, quite the opposite in fact, with the rally being relatively broad-based in nature.

That said, I do see some cause for caution in the short-term, even as the SPX & NDX hit new record highs. With money markets discounting ~70bp of Fed cuts by year-end, the bar for a dovish surprise from the FOMC tomorrow night is a high one, potentially an impossibly high one to meet. Hence, with a 25bp cut fully discounted, any guidance that J-Pow offers is likely to be interpreted as hawkish relative to how markets are positioned. As a result, it increasingly feels as if Wednesday's FOMC meeting could shape up as a classic ‘buy the rumour, sell the fact' event, especially with spoos having rallied 7% in five weeks since the August lows.

Still, even if some headwinds may crop up in the short-term, my faith in the longer-run bull case remains, hence I'd be viewing any equity dips as a buying opportunity. The underlying economy remains resilient, earnings growth is solid, calmer tones continue to prevail on the trade front, and an easier monetary policy backdrop over the next 6-12 months should also give the rally a nice helping hand. We might, though, if the FOMC proves a ‘sell the news' event, need to get over the hump of typically negative EoM/EoQ seasonality first.

Away from the equity complex, there wasn't overly much signal to be extracted from yesterday's market moves – Treasuries firmed across the curve, albeit remaining inside last week's ranges, while the dollar ticked a touch softer against most DM peers, in turn seeing gold advance once more & print a new record high.Although that USD demand faded somewhat as the day progressed, it was enough to take cable to its best levels since early-July. To be completely clear, this is not some sort of sudden vote of confidence in UK Plc, but almost purely a reflection of a broadly firmer greenback, again helping to re-affirm my longstanding view that the best way to play the ‘bearish UK' theme remains either short GBP in the crosses or, perhaps more simply, being short the long-end of the Gilt curve.

LOOK AHEAD – That deluge of event risk that I've been harping on about, starts today.

Last month's US retail sales figures highlight the docket, with headline sales seen having risen just 0.2% MoM in August which, if realised, would be the slowest monthly rise since May. While the control group metric, which broadly represents the GDP basket, is set to post a healthier 0.4% MoM rise, participants will be watching the release closely for any signs that a stalling labour market may be seeing consumers begin to tighten their belts.

Elsewhere, the US also releases industrial production stats for August today, with production data also due from the eurozone. On this side of the pond, though, focus will fall firstly on this morning's UK employment report, set to show unemployment having held steady at 4.7% in the three months to July, before participants turn their focus to the latest ZEW sentiment figures from Germany.Rounding things out today, we have last month's Canadian CPI which, despite likely rising back to 2% YoY shouldn't derail the BoC from delivering a 25bp cut tomorrow, as well as a 20-year Treasury auction tonight, which should go relatively well given how easily last week's supply was digested.