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PORTUGAL AUCTION PREVIEW

Exchange Operation Announced

US TSY OPTIONS

10Y Put Sale

GBP

Some reversal in the Pound

GILT PAOF RESULTS

PAOF of the 0.375% Oct-26 Gilt not taken up

US EURODLR OPTIONS

Overnight Trade Recap

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  • Haven currencies edged lower alongside the greenback Thursday, with solid progress on the US debt ceiling helping buoy risk sentiment. A vote among lawmakers is now possible ahead of Friday, with a bipartisan deal struck that would avoid the near-term crunch of a mid-October credit event. The $480bln package knocks back the debt ceiling deadline to early December, at which more political tussles are highly likely.
  • As a result, equities rallied sharply, helping pressure the JPY to the bottom of the G10 pile and putting USD/JPY on track for a test of the mid-week highs at 111.79.
  • Growth proxy currencies outperformed, with AUD leading markets higher to prompt a new October high at 0.7324. Further progress for the pair from here opens the 100-dma resistance at 0.7435.
  • Friday's nonfarm payrolls release is in focus, with markets expecting job gains of 500k over the month of September, equating to a drop of 0.1ppts in the unemployment rate. Caixin composite and services PMI data is also due from China, as well as Canada's latest labour market report. ECB's Lagarde also makes an appearance, speaking alongside US Treasury Secretary Yellen.