Global FX Market Summary: Eurozone Inflation, ECB, US Federal Reserve’s Hawkish Outlook, 31 October 2025

Eurozone inflation nears ECB target, supporting steady rates; Swiss Franc fragileens amid SNB dovish stance; Fed hawkishness strengthens USD.

Eurozone Inflation and ECB Monetary Stance

The Eurozone’s price environment is moving closer to the European Central Bank’s (ECB) target, supporting its current “on-hold” monetary stance. Preliminary data showed that the Core Harmonized Index of Consumer Prices (HICP) rose 0.3% month-over-month (MoM) in October, accelerating from 0.1% in September. Annually, the core rate held steady at 2.4% year-over-year (YoY), slightly exceeding the 2.3% consensus. Meanwhile, headline HICP inflation eased to 2.1% YoY in October, down from 2.2% the prior month. In line with this trend, the ECB left all three key policy rates unchanged: the Deposit Facility, Main Refinancing, and Marginal Lending Rates remained at 2.00%, 2.15%, and 2.40%, respectively. The Governing Council noted that inflation is now near its medium-term target, and its overall assessment remains broadly unchanged, with policymakers affirming the need to maintain full optionality to act as necessary.

Swiss Franc fragileness and SNB Policy

The Swiss Franc (CHF) is under pressure due to fading secure-haven demand, allowing the EUR/CHF pair to hold near a two-week high around 0.9287. On the domestic front, Swiss economic data showed a rebound in consumption, with Real Retail Sales increasing 1.5% YoY in September, a notable recovery from the 0.3% increase in August. Despite this, the Swiss National Bank (SNB) maintains an expansive monetary policy. A member of the Governing Board, Petra Tschudin, emphasized that the level of the Franc is not significant in itself, but rather its impact on inflation. She reiterated the central bank’s readiness to intervene in the currency market if necessary and its willingness to reintroduce negative interest rates should conditions warrant it.

US Federal Reserve’s Hawkish Outlook and USD Strength

The US Dollar (USD) is firm, supported by a hawkish tone from Federal Reserve (Fed) officials, which has caused investors to pare back expectations for a December rate cut. Dallas Fed President Lorie Logan stated she would find it hard to cut rates again next month without clear evidence of a quicker drop in inflation or a rapid cooling of the labor market. Similarly, Kansas City Fed President Jeffrey Schmid, who dissented against a recent rate cut, argued that the economy still shows continued momentum and inflation remains too high, noting that the policy is only modestly restrictive. These comments led to a sharp drop in market expectations for a December rate cut, with the probability falling to roughly 64.8% according to the CME FedWatch Tool, providing support to the US Dollar Index (DXY).

 Top upcoming economic events:

Friday, October 31, 2025

• NBS Manufacturing PMI / NBS Non-Manufacturing PMI – 01:30:00 CNY: These are key indicators of China’s economic health, measuring business activity in the manufacturing and services sectors. As the Chinese economy is a major global growth engine, strong or fragile readings have a cascading effect on global trade, commodity prices, and risk appetite, thereby impacting the CNH and other correlated currencies.
• Harmonized Index of Consumer Prices (YoY) / Core Harmonized Index of Consumer Prices (YoY) – 10:00:00 EUR: These reports on Eurozone inflation are high-impact events for the Euro. They are the primary gauges of price stability used by the European Central Bank (ECB) for setting monetary policy. Deviations from expectations directly influence market pricing for future ECB interest rate decisions and thus strongly affect the EUR.
• Core Personal Consumption Expenditures – Price Index (YoY) – 12:30:00 USD: This is the Federal Reserve’s (Fed) preferred measure of inflation in the US, making it a very high-impact event for the US Dollar. By excluding volatile food and energy components, it offers a clearer picture of underlying price pressures. The result is a critical determinant of the Fed’s stance on future interest rate changes.

Monday, November 3, 2025

• RatingDog Manufacturing PMI – 01:45:00 CNY: Similar to the NBS PMIs, this private-sector survey offers a high-impact measure of the manufacturing sector’s health in China. It provides valuable insight into the production side of the world’s second-largest economy, influencing global market sentiment and the CNH.
• Consumer Price Index (YoY) – 07:30:00 CHF: This high-impact Swiss inflation data is vital for the Swiss Franc. Price growth figures are a key input for the Swiss National Bank (SNB) when considering changes to its interest rate policy. An unexpectedly high or low reading can lead to significant moves in the CHF.
• ISM Manufacturing PMI – 15:00:00 USD: This is a closely-watched, high-impact survey of US manufacturing activity. It covers key components like new orders, production, and employment. As a leading indicator of economic health, it strongly influences the outlook for the USD and the broad US economy.
• BoC’s Governor Macklem speech – 18:30:00 CAD: The Bank of Canada Governor’s speech is a high-impact event for the Canadian Dollar. Any forward guidance, commentary on the economic outlook, or hints at future monetary policy actions (like interest rate changes) can cause substantial and immediate volatility in the CAD.

Tuesday, November 4, 2025

• RBA Interest Rate Decision / RBA Rate Statement / RBA Monetary Policy Statement / RBA Press Conference – 03:30:00 to 04:30:00 AUD: This cluster of high-impact events surrounds the Reserve Bank of Australia’s (RBA) monthly decision on interest rates. The decision and accompanying statements provide critical insight into the future direction of Australian monetary policy, having a direct and powerful influence on the AUD’s value.
• Employment Change / Unemployment Rate – 21:45:00 NZD: These are dual high-impact employment reports for New Zealand. The job market health is a primary driver of inflation and a key component of the Reserve Bank of New Zealand’s (RBNZ) mandate. Strong or fragile job data can significantly alter expectations for the RBNZ’s policy path, causing sharp movements in the NZD.

Wednesday, November 5, 2025

• ADP Employment Change – 13:15:00 USD: This report is a private-sector estimate of non-farm employment change and is often viewn as a significant precursor to the official US Nonfarm Payrolls report later in the week. A high-impact event, it provides a leading indication of the health of the US labor market and can cause notable volatility in the USD.
• ISM Services PMI – 15:00:00 USD: This is a key high-impact indicator of the health of the US services sector, which is the largest part of the US economy. Covering metrics like new orders and employment, this report influences sentiment on overall economic growth and is a crucial input for the Federal Reserve.

Thursday, November 6, 2025

• BoE Interest Rate Decision / BoE Minutes / BoE Monetary Policy Report / BoE Monetary Policy Summary / BoE MPC Vote Rate Cut/Hike/Unchanged / BoE’s Governor Bailey speech – 12:00:00 to 12:30:00 GBP: This is the single most significant event for the British Pound this week, a concentrated series of high-impact releases. The interest rate decision, the voting record of the Monetary Policy Committee (MPC), the outlook in the report, and the Governor’s subsequent speech will entirely shape the market’s expectation for UK monetary policy, leading to extreme volatility in the GBP.

Friday, November 7, 2025

• Net Change in Employment / Unemployment Rate – 13:30:00 CAD: This pair of high-impact reports for the Canadian labor market is one of the most critical monthly releases for the CAD. The state of employment and the unemployment rate are primary factors considered by the Bank of Canada (BoC) when setting interest rates. Significant unexpected changes can cause sharp volatility in the CAD.
• Average Hourly Earnings (MoM) / Average Hourly Earnings (YoY) / Nonfarm Payrolls – 13:30:00 USD: The trifecta of high-impact US labor market data, often referred to as the “Jobs Report,” is arguably the most significant single piece of economic data each month. Nonfarm Payrolls (NFP) and Average Hourly Earnings (AHE) are primary drivers of Fed policy expectations regarding employment and inflation, leading to substantial and sustained volatility in the USD and global markets.

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