📝Remain Skeptical Of October Seasonality FX Patterns: J.P. Morgan

Figure 6 denotes the median returns and hit rates (% of instances

with positive returns) for CCY/USD pairs in October since

2015, with green (red) dots indicating net long (short) expo-

sure in our portfolio (EUR denoted in yellow given mixed

long/short exposure). USD has generally outperformed over

that horizon, delivering +0.5-0.7% median returns with a 60-

70% hit rate across both the TWI and DXY. By contrast, G10 low-yielders (JPY, CHF) and pro-cyclical mid-yielders (AUD, Scandis) have tended to underperform. At first glance, it would seem that our portfolio could face tactical headwinds from these seasonal patterns.

However, we are somewhat skeptical about the impacts from such seasonality given that 1) the USD has not behaved according to its traditional seasonality thus far in 2025 (Figure 7… though we note that such historical price action has not ben playing out in 2025 ), and 2) there are a number of idiosyncratic factors that are likely to serve as the main drivers for specific currencies. The former point is not too surprising given the historically-unique macro backdrop this year, while the latter gives us some comfort in holding onto our net longs in JPY (LDP election, BoJ hike odds), AUD (hawkish RBA) and the Scandis (Norges Bank & Riksbank likely done with their cutting cycles). - J.P. Morgan FX Strategy