Q4 has started with a puzzle. Activity is holding up, US jobs have weakened, bond yields remain high and political risk is rewriting the FX map. 🌍⚡
🇺🇸 USD: services face the reality check
September payrolls added just 29K, unemployment rose to 4.2%, and the probability of an October Fed hike has fallen below 20%. Yet the US 10-year yield remains around 5.26%.
Today’s US ISM Services report is therefore crucial. August’s index was 55.4. Don’t just watch the headline — new orders, employment and prices will show whether demand can withstand expensive credit. 📊
🇪🇺 EUR/USD: growth vs political risk
Eurozone services PMI jumped to 53.0 in September, a 10-month high, while the composite PMI reached 53.1, its strongest since April 2023. Normally, good news for the euro.
But EUR/USD has fallen below 1.12, near a 17-month low. Why? France. 🇫🇷 The 10-year OAT-Bund spread is around 146 bp as fiscal and political uncertainty pushes investors towards safety.
A perfect example of why PMI alone is not enough.
🇬🇧 GBP/USD: expansion, but barely
UK services activity remains above 50, but September’s flash PMI slowed to 51.7 from 52.5. New business weakened and cost pressures increased.
Thursday’s Bank of England Q3 Credit Conditions Survey could provide the missing piece: are lenders confirming resilience, or quietly becoming more cautious? 💷🔍
🥇 Gold: caught between two worlds
Gold is near $4,150. Weaker US data and lower October hike expectations offer support, but the strong dollar and high yields limit the upside. Political and fiscal stress in Europe adds another safe-haven argument.
🛢️ Oil: demand is only half the story
Brent remains above $100 as the Middle East conflict, Hormuz logistics, tanker costs and disrupted refining complicate the supply picture. Even recovering exports have not removed the risk premium.
📅 Watch next: Fed minutes on Wednesday and the ECB monetary policy account on Thursday.
🎯 The Q4 signal:
Activity → trade → credit → yields → FX.
PMI tells us what businesses are saying. Credit tells us whether the financial system believes them. When both agree, the signal becomes much harder to ignore. 👀
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🧭 NordFX: Q4 Demand Check — Is Growth Really Holding Up? was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.