A week that began with a hot CPI has now produced an even hotter PPI - headline wholesale prices rose 1.3% in September, the second largest monthly gain in recorded data, pushing the annual rate to 6.3% against a 5.3% consensus. And yet the dollar is weaker, Treasury yields are off their highs, and gold is holding above $4,165. The reason is Fed Chair Warsh, who spoke at the IMF meetings in Bangkok overnight and pointedly refused to signal an October rate hike, cutting the probability of an October move from around 30% to 17%. The Fed enters its blackout period tonight. No further guidance is possible before the October 27-28 meeting.
That sets the framework for today's session. The dominant trade is EUR/USD. The pair has broken above 1.1200 overnight - the level this briefing has flagged for three days - with the 0th-percentile CFTC net short from October 6 now the structural fuel for a squeeze toward 1.1270. USD/CHF, trading near 0.8265 against the 96th-percentile institutional CHF short, is the second primary instrument. Gold at $4,165 is the direct commodity expression of the Warsh relief, with the 21-day SMA at $4,208 the day's upside target. Oil holds above $97 after US Central Command confirmed a container ship in the Strait of Hormuz was struck by an Iranian projectile - geopolitical risk premium remains live and asymmetrically elevated.
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