One of Amazon’s top executives defended the new, controversial five-day-per-week in-office policy on Oct 17, saying those who do not support it can leave for another company.

Speaking at an all-hands meeting for AWS, unit chief executive officer Matt Garman said nine out of 10 workers he has spoken with support the new policy, which takes effect in January, according to a transcript reviewed by Reuters.

Those who do not wish to work for Amazon in-office five days per week can quit, he suggested.

“If there are people who just don’t work well in that environment and don’t want to, that’s okay, there are other companies around,” said Mr Garman.

“By the way, I don’t mean that in a bad way,” he said, adding “we want to be in an environment where we’re working together.”

“When we want to really, really innovate on interesting products, I have not seen an ability for us to do that when we’re not in-person,” said Mr Garman.

The policy has upset many of Amazon’s employees who say it wastes time with additional commuting and the benefits of working from the office are not supported by independent data.

Amazon has been enforcing a three-day in-office policy, but CEO Andy Jassy said last month the retailer would move to five days to “invent, collaborate and be connected.”

Some employees who had not been previously compliant were told they were “voluntarily resigning” and were locked out of company systems.

Amazon, the world’s second-largest private employer behind Walmart, has taken a harder line on returning to office than many of its technology peers such as Google, Meta and Microsoft who have two- to three-day in-office policies.

“I’m actually quite excited about this change,” said Mr Garman. “I know not everyone is,” he said, noting it’s too hard to accomplish the company’s goals with only the mandatory current three days of in-office work.

Mr Garman said under the three-day policy, “we didn’t really accomplish anything, like we didn’t get to work together and learn from each other,” because people may be in offices on different days.

In particular, Mr Garman said the company’s leadership principles, which dictate how Amazon ought to operate, were difficult to follow with just a three-day-per-week requirement.

“You can’t internalise them by reading them on the website, you really have to experience them day-to-day,” he said.

One, “disagree and commit” – which is understood to mean that employees can express grievances but then should dive into a project as outlined by leaders – is not ideal for remote work, Mr Garman said.

“I don’t know if you guys have tried to disagree via a Chime call,” he said, referring to the company’s internal messaging and calling function. “It’s very hard.” 

Source: Straitstimes

The EUR/JPY pair remains stable around 162.60 during early European trading on Friday. The Japanese Yen (JPY) finds support from verbal interventions by Japanese authorities. A government spokesman stressed the importance of stable currency movements that align with economic fundamentals, emphasizing that officials are closely monitoring exchange rate fluctuations, especially any speculative activity, with increased vigilance.

Japan’s Vice Finance Minister for International Affairs, Atsushi Mimura, also commented on Friday that the recent Yen movements have been "somewhat rapid and one-sided." Mimura underscored that excessive volatility in the foreign exchange market is undesirable.

Meanwhile, Japan’s National Consumer Price Index (CPI) slowed to a year-on-year rate of 2.5% in September. The Core CPI, which excludes fresh food prices, dropped to 2.4%, down from a 10-month high of 2.8%.

The Euro came under downward pressure after the European Central Bank's (ECB) policy decision on Thursday. The ECB lowered its Main Refinancing Operations Rate and the Deposit Facility Rate by 25 basis points to 3.40% and 3.25%, respectively, in line with market expectations.

These consecutive rate cuts by the ECB in 13 years, lowered the Deposit Facility Rate to 3.25%. The decision comes in response to a sharp decline in inflation, which had surged to a peak of 10.6% in October 2022 but fell to 1.7% in September, now below the ECB’s 2% target.

During the post-meeting press conference, ECB President Christine Lagarde left the markets uncertain about the timing of future rate cuts, though she reassured that the Eurozone economy is on course for a soft landing.

Source: FXSTREET

USD: Dollar rally has more to go

US retail sales came in strong yesterday, and the timing of their release (15 minutes after the European Central Bank cut) worked perfectly to favour another leg higher in the dollar. USD/JPY finally made the seemingly inevitable break above 150.0, but we would not be expecting a straight-lined appreciation in the pair from here as Japanese authorities may step up verbal intervention. Markets should be more attentive to currency comments than in previous JPY selloffs given the success of the latest round of Bank of Japan FX intervention.

That said, unless markets regain some confidence in Fed cuts, the dollar will hardly face downward corrections in the near term. The risk now is that markets might actually price out one cut in either November or December (currently 42bp priced in total) should core PCE and above all October jobs figures come in a bit hotter.

Still, that is not as big an upside risk for USD as the US election. We still think some de-risking into 5 November can lead to some defensive flows into the dollar, and that the likes of the Australian and New Zealand dollars are due another leg lower into the election. The antipodeans are highly exposed to tariffs on China, which may well overshadow any benefit from Beijing’s stimulus measure. Overnight we saw China’s 3Q growth numbers at 4.6% year-on-year vs the 4.5% expected. In the commodity FX space, we continue to expect outperformance by the Canadian dollar, also since we narrowly favour an out-of-consensus 25bp cut by the Bank of Canada next week.

Back to the US, the calendar is quite light today and only includes some housing data for September. We’ll be monitoring whether any of today’s Fed speakers (Raphael Bostic, Neel Kashkari and Christopher Waller) take an extra step to the hawkish side on the back of yesterday’s retail sales numbers. DXY might be due some small and short-lived corrections, but we can easily see it climb above 104.0-104.5 in the next couple of weeks.

EUR: Lagarde puts a cap on the euro

ECB President Christine Lagarde sounded a bit more dovish than usual at yesterday’s post-meeting press conference. She emphasised the ECB’s greater confidence in the disinflation path, and while she said the activity picture only influences policy decisions insofar as it affects inflation, the general perception is that the focus has started to shift from inflation to growth. As our ECB watcher, Carsten Brzeski, points out here the drop in September’s headline inflation was in line with the ECB’s own projections, so it must have been the grim PMIs that tilted the balance to the dovish side yesterday. Lagarde repeated at least twice that the ECB is data-dependent and not data-point dependent, but a dovish reaction to an activity survey would instead point to the latter.

If indeed the focus is now more on growth, we can probably conclude that the ECB will keep cutting, as the activity outlook will hardly improve much in the near term. Markets agree and are pricing in 100bp of easing in the next four meetings (December, January, March, April). That is probably the maximum the ECB can deliver, and there are risks of some hawkish repricing helping front-end euro rates around the turn of the year.

But with regards to the near-term picture, the euro is left weaker, with more limited room for a rebound as the two-year swap rate gap with the dollar is now at -140bp, the widest since May. This is consistent with EUR/USD trading below 1.080, and given the risks are skewed to a firmer USD into a closely contested US election, 1.070 is well within reach before month-end.  

GBP: Cable can slip to 1.28

September's better-than-expected UK retail sales data, which comes on the heels of decent August growth, is another sign that the economy is still performing relatively solidly. The consumer is benefiting from strong real wage growth, though we don't expect the growth rates we saw in the first half of the year to be repeated in the second. Still, growth data is of secondary interest for the BoE right now. This week's surprise dip in services inflation is more important, suggesting back-to-back rate cuts are becoming more likely. 

Sterling has proven to be a bit more resilient than we had thought after that sharp downward surprise in services inflation on Wednesday. Cable has hovered around the 1.30 mark, and so far failed to make another decisive move lower. Still, we think the balance of risks remains skewed to the downside.

Even with less than two Bank of England cuts priced in by year-end, the two-year swap rate gap between sterling and the dollar has now tightened to 19bp from 55bp at the start of October. The last time we saw that spread around these levels (early August) GBP/USD was trading at 1.28, and barring major US data downside surprises, we see no strong argument against a move to that level.

CEE: FX welcomes central bankers' hawkishness but rates remain under pressure

As expected, the Central Bank of Turkey (CBT) left rates unchanged at 50% and added a bit to its hawkish communication. The statement turned cautious as a result of increasing uncertainty surrounding the pace of inflation improvements. The CBT reiterated that its tight monetary stance would lead to a) a decline in the underlying trend of monthly inflation by moderating domestic demand, b) real appreciation in the Turkish lira, and c) an improvement in inflation expectations. We believe there could be room for a first rate cut in December, but it will, of course, depend on the October and November inflation numbers. On the positive side, the CBT seems to be aware of the situation and the risk of a mistake is diminishing, which should confirm the bulls in the TRY market.

In Hungary, the National Bank of Hungary's deputy governor reiterated that the pause in the rate-cutting cycle may be longer given the headwinds in the EM space. Although the market is pricing in a first rate cut only in January and around 50% for December, the headlines supported the currency and for a while, we got below 400 EUR/HUF. However, yesterday rates and bonds across the region came under pressure again due to higher core rates in the US, which later reduced some gains in FX as well. We'll hear more next week when the NBH is scheduled to meet. It's already almost certain that a rate cut is not on the table, but we could hear more details on how long the pause in the cutting cycle may be.

Source: Poundsterlinglive

The US Dollar (USD) struggles to preserve its strength as risk mood improves on the last trading day of the week. Building Permits and Housing Starts data for September will be featured in the US economic docket on Friday. Several Federal Reserve (Fed) policymakers are scheduled to speak later in the American session.

Gold extended its weekly rally on Thursday and gained 0.7% on the day. XAU/USD continued to push higher during the Asian trading hours on Friday and reached a new all-time-high above $2,710 before retreating slightly.

The data from China showed earlier in the day that the Gross Domestic Product expanded at an annual rate of 4.6% in the third quarter, at a slightly stronger pace than the market expectation of 4.5%. On a yearly basis, Industrial Production expanded by 5.4% in September and Retail Sales rose by 3.2%. Both of these prints came in above analysts' estimates. Reflecting the risk-on environment, the Shanghai Composite Index is up more than 4% on the day.

Assessing the data releases, China's National Bureau of Statistics (NBS) noted that September economic indicators showed positive changes and added that the confidence is rising on achieving a GDP growth of about 5% in Q4. In the meantime, People's Bank of China (PBOC) Governor Pan Gongsheng said on Friday that they expect, depending on the market liquidity situation, that the reserve requirement ratio (RRR) could be further reduced by the end of the year.

The European Central Bank (ECB) announced on Thursday that it lowered key rates by 25 basis points (bps) following the October policy meeting. With this decision, the interest rate on the main refinancing operations, the interest rates on the marginal lending facility and the deposit facility stood at 3.4%, 3.65% and 3.25%, respectively.

The ECB reiterated in its policy statement it will continue to follow a data-dependent and meeting-by-meeting approach in determining the appropriate level and duration of restriction. In the post meeting press conference, ECB President Christine Lagarde noted that incoming data suggest that the economic activity in the Euro area is weaker than expected. Regarding the growth outlook, Lagarde said that they are still looking at a soft landing, not forecasting a recession. EUR/USD dropped to its lowest level since early August at 1.0811 following the ECB event on Thursday. Supported by the renewed US Dollar (USD) weakness, the pair trades in positive territory near 1.0850 early Friday.

Following a three-day slide, AUD/USD reversed its direction and rose nearly 0.5% on Thursday. The pair continues to edge higher early Friday and trades above 0.6700.

The UK's Office for National Statistics reported early Friday that Retail Sales rose 0.3% on a monthly basis in September. This reading followed the 1.% increase recorded in August and came in better than the market expectation for a decline of 0.3%. After suffering large losses midweek, GBP/USD registered small gains on Thursday and continued to climb higher early Friday. At the time of press, the pair was up 0.4% on the day at 1.3050.

The latest data from Japan showed that the National Consumer Price Index (CPI) rose 2.5% on a yearly basis in September, at a much softer pace than the 3% increase seen in August. After rising above 150.00 for the first time in over 10 weeks on Thursday, USD/JPY retreated below this level during the Asian trading hours on Friday as Japanese officials verbally intervened. Atsushi Mimura, Japan’s Vice Finance Minister For International Affairs and top foreign exchange official, said on Friday, he is “closely watching FX moves with a high sense of urgency.” Meanwhile, Bank of Japan (BoJ) Governor Kazuo Ueda said that they must be vigilant to market and FX moves and their impact on the economy and prices.

Source: FXSTREET

GBP/JPY continues to rise for the second consecutive day, trading around 195.90 during the Asian session. The Pound Sterling (GBP) gained momentum following a solid Retail Sales report from the United Kingdom (UK) released on Friday.

According to data from the Office for National Statistics (ONS), UK Retail Sales increased by 0.3% month-over-month in September, following a 1.0% rise in August. This was unexpected, as markets had anticipated a 0.3% decline for the month. On an annual basis, Retail Sales grew by 3.9%, compared to a 2.3% increase in August. Core Retail Sales, excluding automotive fuel, also rose by 0.3% month-over-month, down from the previous 1.1% growth, but better than the forecasted -0.3%.

Despite the positive Retail Sales report, the British Pound may encounter challenges as the Bank of England (BoE) faces mounting pressure to expedite rate cuts. This pressure stems from recent economic data showing declines in Consumer Price Index (CPI) and Producer Price Index (PPI) inflation figures, along with disappointing labor market statistics.

The Japanese Yen (JPY) gained ground, partly due to verbal intervention from Japanese authorities. Atsushi Mimura, Japan’s Vice Finance Minister for International Affairs and the top foreign exchange official stated on Friday that recent movements in the Yen have been "somewhat rapid and one-sided," emphasizing that excessive volatility in the foreign exchange market is undesirable.

Additionally, a spokesman for the Japanese government highlighted the importance of stable currency movements that reflect economic fundamentals, noting that authorities are closely monitoring foreign exchange fluctuations, particularly any speculative activity, with a heightened sense of urgency.

Japan's National Consumer Price Index (CPI) slowed to a year-on-year rate of 2.5% in September. Meanwhile, the Core CPI, which excludes volatile fresh food items, registered at 2.4%, a decrease from a 10-month high of 2.8%.

Source: FXSTREET