Errante’s The Week Ahead: 3^rd – 7^th November 2025 

Highlights of the Next Week 

• Macro set-up: ISM (mfg/services), JOLTS and ADP re-open the US data pipeline; markets reassess Fed path after a cautious Powell. 

• Central banks: RBA (Tue) expected on hold; BoE (Thu) a close call after softer UK inflation—communications overhaul in focus. 

• Risk tone: AI-led equity momentum vs. firmer yields and credit concerns; USD’s haven bid challenged by CHF/JPY strength. 

• Commodities/Gold: Gold consolidates after records; path hinges on real yields and BoE/Fed signaling. 

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Errante’s The Week Ahead: 3^rd – 7^th November 2025 

Macro Narrative & Base Cases 

US Macro: Goods Disinflation vs. Sticky Services 

After a quarterpoint cut, the Fed signaled patience, and the next leg of the debate hinges on how far services inflation cools without stalling growth. Goods disinflation is largely mature (postCOVID inventory normalization, cheaper freight), while shelter and laborintensive services remain the swing factors. Into next week, the ISM Manufacturing (Mon) and ISM Services (Wed) will help validate whether pricing pressure is ebbing at the margin: a softer Prices Paid with stable New Orders would argue for benign disinflation alongside resilient demand. Meanwhile, JOLTS openings (Tue) and ADP (Wed) should extend the slowcooling labor trend—openings drifting lower, quits subdued, and payrolls volatile but contained. That mix is consistent with a “long glide path” for policy—comfortable for risk assets and mildly USDnegative unless the PMIs or wages reaccelerate. 

Fed Reaction Function: Patience with TwoSided Risks 

Powell’s guidance implies three checkpoints: (1) inflation breadth—does disinflation broaden beyond goods into core services exshelter? (2) labor rebalancing—does cooling demand avoid a surge in layoffs? (3) financial conditions—do higher term premia and heavy issuance tighten credit defacto? Our base case next week is incremental evidence of cooling, not collapse: PMIs straddle expansion, job openings drift down, and wage growth eases at the margin. In that scenario, the Fed waits for more proof before endorsing a faster cutting cadence. For markets, that means rangebound USTs, a driftsofter USD vs. lowbeta FX and CHF/JPY, and AIsupported US equities retaining leadership—while remaining sensitive to any upside surprise in services prices or unit labor costs. 

UK CrossCurrents: BoE Communication Reset, Growth Under Potential 

The BoE (Thu) enters with softer inflation momentum and patchy activity, but also with a revamped communication framework that elevates individual MPC rationales. The nearterm macro mix—cooling headline, slower wage growth, tepid retail momentum—leans dovish, yet the bar for a surprise cut remains nontrivial. Our modal path is a hold with guidance acknowledging demand slack and wage disinflation. Market impact skew: a dovish hold could steepen gilts and soften GBP, whereas any hawkish dissent or firmer servicesprice rhetoric risks a GBP shortsqueeze. For traders, focus on the labor costs narrative and how the BoE characterizes the transmission lags hitting mortgages and SMEs. 

Credit & Liquidity: The Quiet Tightening 

Under the surface of buoyant indices, credit is doing quiet work. Megacap bond issuance and elevated Treasury supply periodically nudge yields higher, while a rise in paymentinkind (PIK) usage in private credit flags latecycle stress. The implication: even without hotter CPI, financial conditions can retighten episodically, amplifying sensitivity to data surprises. Risk markets may therefore oscillate between AIcapex optimism and fundingcost reality; we prefer buying dips in quality growth while fading overextensions tied to resteepening yield spikes. 

Trade & Tariffs: FX, Gold and the Inflation Channel 

Tariff rhetoric remains a twoway catalyst. Escalation typically feeds tradables inflation, pressures EM Asia FX (KRW, TWD), and can lift USD vs. cyclical G10—while simultaneously supporting gold via inflationhedge and riskaversion channels. Deescalation would relieve costpush pressure, favor EUR/GBP on a global growth pickup story, and weigh on the USD at the margin through improved risk appetite. The transmission is not instant: pricing power, hedging practices, and supply chain rerouting determine the lag to CPI. Markets will treat any tariff headlines as skewrisks around the base case of gradual disinflation. 

Commodities Pulse: Gold Consolidation, Oil’s Policy Overhang 

With real yields churning and centralbank buying steady, gold’s surge has morphed into orderly consolidation. The tactical buythedip case persists so long as services inflation and wages trend down and policy stays in riskmanagement mode. Oil is caught between macro softness and policy supply risks (OPEC+ signaling) with inventories and China demand acting as swing variables. For crossasset, lower oil volatility supports the softlanding thesis; a policyinduced supply shock would challenge that and resteepen inflation expectations. 

FX Map: USD Range, CHF/JPY Resilience, EventDriven GBP 

Our base case is a rangebound USD into the data barrage, resilient CHF/JPY on safehaven sponsorship, and eventdriven GBP into the BoE. A benign US data mix (cooler services prices, softer JOLTS/ADP) should keep DXY capped and favor EUR/GBP stabilization; upside US surprises or a hawkish BoE twist would reopen USDup and GBPup pockets respectively. Keep an eye on term premium moves—another uptick could compress risk appetite and lend the dollar tactical support even without hotter CPI. 

Tactical Playbook: 

• Risk: Favor quality growth and US indices on benign disinflation; reduce on yield spikes tied to issuance/fedspeak. 

• Rates/FX: Fade USD strength into soft labor prints; add CHF/JPY on risk wobbles; position GBP reactively to BoE tone. 

• Gold: Accumulate on dips while real yields drift sideways; reassess if servicesprice momentum reaccelerates. 

Central Banks — What to Watch & FX Impact 

• RBA (Tue): On hold at 3.60% with softer consumption and housing sensitivity; AUD reaction path hinges on guidance—neutral to slightly dovish is AUDsoft vs. USD/JPY. 

• BoE (Thu): Base case hold at 4.00% with more dovish communication; GBP asymmetric downside if guidance highlights demand slack/wage disinflation. A surprise cut: larger GBP drawdown; hawkish tilt: sharp shortcovering pop. 

Bottom Line: We head into November with equities buoyed by AI capex and a patient Fed but yields and credit supply can still jar risk. Our base case is rangebound USD, consolidating gold, bid US indices—provided ISM/ADP don’t reaccelerate inflation risks and the BoE doesn’t shock the market. 

Market Events and Announcements (GMT+2) 

Monday, 3^rd November 2025 

• 16:45 – USD – S&P Global Manufacturing PMI (Oct): Final read on factory conditions; proxy for goods demand. 

• 17:00 – USD – ISM Manufacturing PMI (Oct): Headline seen near 49.1; watch New Orders/Employment subindices. 

• 17:00 – USD – ISM Manufacturing Prices (Oct): Inflation impulse from input costs. 

Tuesday, 4^th November 2025 

• 05:30 – AUD – RBA Interest Rate Decision (Nov): Consensus hold at 3.60%; statement tone on household demand pivotal. 

• 17:00 – USD – JOLTS Job Openings (Sep): Laborslack gauge; lower openings would validate gradual cooling. 

Wednesday, 5^th November 2025 

• 15:15 – USD – ADP Nonfarm Employment Change (Oct): Early labor signal (high variance). 

• 16:00 – USD – ISM NonManufacturing PMI (Oct): Services growth barometer; prices & employment components key. 

• 16:45 – USD – S&P Global Services PMI (Oct): Final services activity check. 

• 17:30 – USD – Crude Oil Inventories: Supply/demand balance and risk sentiment cue. 

Thursday, 6^th November 2025 

• 14:00 – GBP – BoE Interest Rate Decision (Nov): Baseline hold at 4.00%; new communication format may amplify GBP volatility. 

Friday, 7^th November 2025 

• No high impact event 

Note: The timetable for US NFP remains subject to scheduling updates; we’ll alert if a release is confirmed. 

Market Insights: Key Charts to Watch 

USD/JPY — Daily  

Trend & Momentum:  

Price trades near 153.95, hugging the channel top and the last swing high (153.23–153.29 zone) with Bollinger upper ~154.2–154.3. MFI ~58 shows healthy, not euphoric, demand. MACD is flattening near zero, signaling momentum fatigue after the October surge. 

Main Scenario (conditional breakout):  

A daily close above 154.28 (127.2% ext.) unlocks 154.83 (141.4%), 155.61 (161.8%), 157.08 (200%). Breakout odds improve if ISM/ADP are firm and yields edge higher while BoJ stays steady. 

Key Levels:  

Support 152.40 (78.6% retrace), 151.76 (61.8%), 150.85 (38.2%), 149.37 (swing base).  

Resistance 154.28 (127.2% extension), 154.83 (141.4%), 155.61 (161.8%), 157.08 (200%). 

Alternative Scenario:  

Failure to clear 154.28 and a soft US data mix prompt a pullback toward 152.40–151.76; a daily close below 150.85 would confirm a momentum turn and expose 149.4 (channel median/0%). 

GBP/USD — Daily 

Trend & Momentum:  

Cable sits around 1.311, extending below former fantrend support. MACD is negative and widening; MFI ~31 signals persistent outflows. 

Main Scenario:  

Unless the BoE surprises hawkish, rallies are likely capped beneath 1.3248–1.3331 (last swing low/61.8% retrace cluster). With trend pressure intact, risk favors continuation toward the 1.3105 (161.8% ext.), 1.3025 (200%), 1.2888 (261.8%) progression. 

Key Levels:  

Resistance: 1.3248 (last swing low), 1.3331 (61.8% retrace), 1.3471 (swing base).  

Support: 1.3105 (161.8% extension), 1.3025 (200%), 1.2888 (261.8%). 

Alternative Scenario (short squeeze):  

A hawkish BoE and weaker US ISM could drive a daily close back above 1.3331, invalidating nearterm downside and opening 1.3471 and the 1.35s. 

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