The BBDXY index (broad US Dollar Index) is trading just under two key resistance levels at 1224.64 (August 1 high) and 1228.38 (200-day moving average). The bond market is stable but global stocks are selling off. Wall Street chief executives warned yesterday that investors should brace for a healthy equity market pullback of more than 10% in the next 12 to 24 months, BBH FX analysts report.

Fed officials split on December policy outlook

"Tough to argue against that. While the stock market rally is not irrational, it does reflect a degree of exuberance judging by elevated investor bullishness and options market positioning. ADP will release today its preliminary weekly employment estimate. In the four weeks ending on October 11, ADP estimated the US private sector added 14,250 jobs. The ADP’s monthly employment data is due tomorrow. Consensus expects ADP payrolls to rebound by 40k in October after declining -32k in September and -3k in August. Positive labor data would fuel further USD gains, while softer figures can trigger a partial USD correction."

"The September JOLTS and trade data were scheduled for release today but will be postponed by the government shutdown. Today is day 35 of the US government shutdown, tying the longest in history. If the government remains shutdown until tomorrow (day 36), it will be the longest-ever. The federal government shutdown will weigh on activity in the near term, but its effects are expected to unwind once it ends. As such, the Fed will look through a temporary slowdown in activity due to the government shutdown."

"Fed Governor Lisa Cook struck a cautious tone on further easing. Cook stressed 'I see the current policy rate as remaining modestly restrictive, which is appropriate given that inflation remains somewhat above our 2 percent target'. In contrast, San Francisco Fed President Mary Daly (non-voter) was more dovish. Meanwhile, San Francisco Fed President Mary Daly (non-voter) said officials should 'keep an open mind' about a December move. Fed Vice Chair for Supervision Michelle Bowman speaks today (11:35am London, 6:35am New York)."