The steepening trend began notably in April 2025, with the 30-year minus 2-year spread widening to +122 basis points (bps) by mid-August—up from deep negative territory—and the 10-year minus 2-year spread reaching +0.59% by mid-year. As of December 11, 2025, the 10Y-2Y spread stands at +0.62%, the widest since April, reflecting ongoing normalization. This is below historical averages (~0.85%) but indicates a "bull steepener" dynamic, where short rates fall faster than long ra

The dollar is trading down 0.6% on the week, this is extending losses recorded over the last two weeks, mostly driven by an FOMC 2026 repricing. The Fed decided to cut rates by 25bps on Wednesday, this was not shocking as it was fully price in, but the December projections came in on the dovish side of the scale. On an index basis, the greenback has weakened more than 1% in December, and it is recording losses close to 8% YTD. We have previously noted how this year is closely

Figure 3 presents the three-year history of ex-ante, FOMC-related S&P implied moves one week before meetings (roughly corresponding to the current episode), alongside the ex-post S&P one-day move on the meeting date. Notably, implied moves have declined materially since 1Q23, coinciding with the near-end of the last hiking cycle (the Fed delivered its final two hikes in May and July 2023). The current implied move of 88 bps is essentially in line with the average over the pas

As we expected, it took a lot of effort to get the hawks on board with a rate cut in December, so they are likely to skip January. Therefore, in our view, a March cut is more likely if the labor market remains weak and inflation contained. However, the FOMC and Powell are clearly in no hurry to cut further. The projections still imply only one rate cut in 2026. Nevertheless, we expect the Fed to continue its cutting cycle in 2026 at least until their estimate of the neutral r

**As seen in Risk In The Week report 11/01/25, get full access now! The RBA decided to keep the cash rate target unchanged at 3.60%. This marks the third consecutive hold since the last rate cut in August 2025, reflecting the Bank's cautious approach amid persistent inflationary pressures. The RBA cited stronger-than-expected quarterly inflation data released in late October 2025, with its preferred core inflation measure (trimmed mean) rising 1.0%—well above the forecasted 0

**As seen in Risk In The Week report 11/01/25, get full access now! Swiss consumer prices remain subdued, the September figure came in steady at 0.2% Y/y. This marks the continuation of a disinflation trend, with headline inflation well within the Swiss National Bank's (SNB) 0-2% target range. The core metric rose 0.7% Y/y, which is within the recent monthly readings. Switzerland's inflation has decelerated rapidly from a 2022 peak of 3.5%, thanks to the SNB's aggressive rate

**As seen in Risk In The Week report 11/01/25, get full access now! The manufacturing index printed at 49.1, up from 48.7 in August, but still below 50 for the seventh straight month of contraction. The services gauge came in at 50.0, unchanged from August, marking stagnation after prior expansions. The uptick in manufacturing suggests a modest stabilization in factory activity amid softer demand, but ongoing contraction raises recession risks for manufacturing (only ~10% of

**As seen in Risk In The Week report 11/01/25, get full access now! Read the Risk In The Week to get briefed on this week's main events

**As seen in Online Tools > Risk Map, get full access now! The Cable FX Macro risk map tool shows the current month's main macroeconomic events. Next week we're set to see inflation metrics from Switzerland, US ISM PMIs, Canada labour report, and interest rate decisions from Mexico, Norway, and Sweden.

Markets now price 100bps of cuts by end-2026 (from 75bps pre-Budget), with 25bps cut odds at 90% for Nov 7. Swap spreads (UK – US 2-year) collapsed to -150bps, a 15-year low. Fiscal concerns and recent data have pushed markets to shift its outlook on the BoE, previously seen among the hawkish central banks in the G10. Chancellor Rachel Reeves’ £40bn tax hike + borrowing plan triggered a gilts selloff (10-year yield +35bps to 4.55%), eroding GBP yield support. OBR forecasts we

A measure of the dollar vs G10FX peers saw the greenback rise on the month to record its largest gain since July. Dollar gains extended on a Fed December repricing, lower implied volatility and risks abroad. The yen bottomed the group in October, USD/JPY was the strongest gainer; BoJ hold and intervention warnings at 155 fueled yen selloff, up from early-Oct lows near 146. Dollar-yen risk reversals hold a premium for puts over calls at 69.75bps in the 1m tenor For the dollar,

USD/JPY pair is trading around 154.00, near an eight-and-a-half-month high, reflecting ongoing yen weakness amid divergent monetary policies between the Federal Reserve (Fed) and the Bank of Japan (BoJ). Overall sentiment leans mildly bullish for USD/JPY in the short term, fueled by the USD's yield advantage and global risk appetite, but with growing caution on overbought conditions and medium-term yen recovery risks. Retail and institutional traders are split, with contraria

**As seen in Online Tools > Chart Grid, get full access now! A variety of factors from Fed easing to Eurozone recovery signals have pushed desks to pencil in further upside on the euro, UBS and Morgan Stanley see EUR/USD reaching 1.25 next year. Near-term risks are balanced but tilt downside due to French drama and Fed uncertainty, with volatility likely around Powell's speech. Longer-term (Q4 2025), upside dominates if U.S. easing persists, per consensus forecasts from UBS

**As seen in Online Tools > Inflation Dashboard, get full access now! Both the headline CPI and the core CPI, which excludes food and energy costs, were a tenth of a percentage point lower than anticipated, with monthly increases of 0.3% and 0.2% respectively. Over a 12-month period, the headline CPI rose by 3.0%, slightly higher than the 2.9% recorded in August, while the core CPI was also 3.0%, showing a decrease from 3.1%. An increase in seasonally adjusted gasoline prices

**As seen in Risk In The Week report 10/17/25, get full access now! Inflation remains above the Bank of Japan's (BOJ) 2% target for over three years, driven by rising food and energy costs, wage pass-through, and a weak yen, but has shown signs of moderation. Headline CPI eased to 2.7% year-over-year (y/y) in August, while core measures (excluding fresh food) hovered around 2.8%. Analysts expect a modest reacceleration in September to ~2.9% core CPI y/y due to sustained livi

**As seen in Risk In The Week report 10/17/25, get full access now ! Due to the ongoing U.S. government shutdown (now in its second week), the scheduled September CPI release— originally set for October 15—has been postponed to October 24, 2025. This delay affects not only CPI but also related indicators like Producer Price Index (PPI), which was also due mid-October. In the absence of new data, markets and analysts are relying on nowcasts and August figures for insights. In

**As seen in Risk In The Week report 10/17/25, get full access now! Headline CPI inflation was unchanged at 3.8% Y/y in August, driven by offsetting pressures: rising food and services costs balanced by softer transport (e.g., airfares). Core CPI (excluding energy, food, alcohol, and tobacco) eased slightly to 4.7% y/y from 5.0% in July. The BoE anticipates a temporary peak of 4.0% in September 2025, influenced by energy base effects, food price surges, and government-set pri

**AS SEEN IN ONLINE TOOLS > CHART GRID Currently, markets are factoring in 50 basis points of rate cuts from the Fed by December, which could boost risk sentiment and support high-beta currencies like the kiwi in the short term. Additionally, there is talk that the current pricing by the RBNZ might be starting to appear overstretched. The latest output figure fell short of expectations, leading markets to anticipate further easing from the RBNZ. However, persistent inflation

Despite the stretched technicals flagging a short-term reversal in the CHF crosses, traders continue to increase bullish exposure across the front-end of curve. Both 1w and 1m tenors have seen topside franc interest rise. We remind you that the CHF is the best expression in FX to a potential risk selloff in the U.S., I wrote more about it here .

The chart below serves as visual guidance on the extent that the USD/JPY exchange rate has detached from rate differentials. U.S. Treasury 2-year and JGB yield spread are recording the most negative correlation coefficient since 2020. Historically, this negative relationship does not tend to last long. Tuesday session saw a rise on topside structures interest, while hedge funds were reportedly seen buying the spot long. We're far from intervention levels, but the extent of th