Will we see more reversion in the week ahead?
I would argue that we will, at least until Wednesday
There is really only one event on the economic calendar next week: The FOMC decision.
The change in tone on the trade war, Brexit and risk trades in general has undoubtedly changed the equation for the Fed. At the same time, economic data has remained solid with today's retail and consumer sentiment numbers underscoring the trend.
If there is any surprise from the Fed, it will be something more hawkish -- despite more 'boneheaded' browbeating from the President.
The market continues to fully price in a 25 basis points cut but it has now completely priced out a 50 bps move. The odds of an October cut have fallen to 43% from 63% at the start of the month and I think it will go lower after the Fed.
In my mind, the bond market cast a decisive vote this week. US 10-year yields are above the 61.8% retracement of the Aug move by 5 bps now and it would take a shocking headline for a close below there.
So look for more of the same early in next week, with USD/JPY tracking higher, gold on the defensive and, generally for crowded trades to unwind. If the Fed is less-dovish (as I expect) then that trade should continue until at least next Friday. That will be the time to reevaluate.