No matter how strong US GDP prints on Thursday, it should not affect expectations for a Fed pause in November after we heard from Chair Powell last week. However, a number close to 5% could make investors more nervous about a hike in December. 

The widening in 10y UST/Bund spreads and the resilience of EUR/USD was one of the main stories in G10 FX last week, but we believe it is too soon to conclude that the pair has bottomed.

The premium in options has continued to rise for EUR puts/USD calls, and it is entirely possible that large option structures contained the pair between 1.0550 and 1.06. A retracement to 1.05 could follow if bond differentials take the upper hand again and the 10-year bond spread stays above 200 bps following the US GDP release and the ECB meeting.