French PM Lecornu survived two no-confidence votes, boosting chances of passing France’s budget—though its deficit may still exceed 3% of GDP by 2029—while weak German data, like the disappointing ZEW survey, keeps euro gains tied to a softer dollar. Markets need stronger German stimulus or Eurozone growth to confidently buy the euro, or a dovish Fed pivot and weak US data could drive it higher despite mild European improvements. MUFG’s Derek Halpenny expects an ECB rate cut by mid-2026, but the Fed’s more aggressive easing should still strengthen the euro, with further ECB cuts possible if energy prices fall due to OPEC+ hikes and redirected Chinese exports. Trump plans to meet Putin in Budapest in two weeks for Ukraine peace talks, touting progress—any real advances would lift the euro.

US credit worries are drawing trader attention, sparking safe-haven flows into the yen, echoing a sharp 800-pip drop in 2023 after the Silicon Valley Bank collapse. BOJ Governor Kazuo Ueda signaled possible near-term rate hikes if economic confidence grows, but he’ll wait for more data amid global risks like US-China trade tensions; meanwhile, US Treasury Secretary Bessent hinted Washington dislikes the yen’s weakness, saying proper BOJ policy will let it find its level naturally. Sanae Takaichi’s odds of becoming Japan’s first female PM have risen with advancing LDP-JIP coalition talks, due for a decision Monday—success could mean policy continuity with fiscal expansion, weakening the yen mildly, boosting stocks, and raising long-term bond yields. However, skeptics doubt her ability to push bold spending amid Japan’s 250% GDP debt load, fractured alliances, and LDP resistance, likely leaving her as a weak leader with little room for major initiatives.

Australia’s unemployment rate rose to 4.5% in September—the highest in nearly four years—despite adding nearly 15,000 jobs, which fell short of expectations and signaled softening in the labor market as more people sought work. This has intensified calls for the Reserve Bank of Australia to deliver a fourth interest rate cut in November, with market odds jumping from 40% to over 70%. Policymakers remain cautious amid lingering inflation, awaiting a key subdued reading on October 29 to justify further easing. For Aussie bulls, a next rally likely hinges on dovish U.S. data confirming Fed cuts, while our base case of a Trump-Xi truce extending the November tariff deadline at APEC could boost the pair beyond its current consolidation between the 50 and 200-day moving averages.