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Talking Points:

– AUD/USD slips as concerns over China mount.

– EUR/AUD, EUR/CAD mostly stuck in recent ranges ahead of ECB.

– See the October forex seasonality report that favors US Dollar weakness.

We're now in the two-day stretch of central bank activity, with the Bank of Canada set to meet today (14:00 GMT) and the European Central Bank tomorrow (rate decision at 11:45 GMT, press conference at 12:30 GMT). Given recent developments in financial markets the past few days, it seems traders and investors don't expect looser monetary policy to result from either the BoC or the ECB.

For the BoC, there are several factors to take into the equation in the short-term: the stabilization of oil prices; improved Q3'15 economic data; and the recent election of Justin Trudeau as Canadian Prime Minister, whose campaign promise of deficit spending to stimulate the economy may prove to be a long-term bullish catalyst for the Canadian Dollar. As such, it wouldn't be shocking to see the Bank of Canada back away from its overtly dovish stance, in turn providing a boost to the Canadian Dollar.

For the ECB, the situation became both more opaque and clear and the same time after the results of the Bank Lending Survey yesterday. The Bank Lending Survey – now more or less a questionnaire on the effectiveness of the ECB's QE program – came in glowing. The ECB said that, for the most part, lending conditions improved further in Q3'15, with credit standards on loans to companies easing for the sixth consecutive quarter. Small lenders reporter an increase in profitability over the past six months thanks to the ECB's QE program.

For these central banks, ‘policy paralysis' seems like an appropriate phrases to describe where they both stand: the BoC isn't pressed to cut rates again amid nascent signs of economic recovery; and the ECB isn't pressed to enhance its QE program thanks to signs that the program in its current form is working as intended.