Market News

Yemen’s Iran-backed Houthis launched a series of attacks against targets in southern Saudi Arabia, including energy facilities, military sites and other strategic locations, in a fresh escalation in regional tensions.

The Saudi Energy Ministry said several energy facilities and installations in the kingdom’s southern region were targeted, causing fires and temporarily halting some operations. Emergency teams were deployed to contain the fires and secure the affected sites.

Saudi authorities said the attacks targeted areas including Abha, Khamis Mushait, Jazan and Najran, with the Saudi-led coalition reporting that 73 people were injured.

The Houthis claimed responsibility for the attacks, saying they used drones and ballistic missiles…

It's a new week but once again we are starting to see bond yields push higher again. And if this keeps up, it will be increasingly more difficult for broader markets to ignore.

10-year Treasury yields are touching 4.80% again, its highest levels since 2023, while 30-year yields in the US are starting to nudge back closer to 5.30%. It's a similar story elsewhere around the globe as borrowing costs in the likes of the UK, Japan, and Germany are all hovering around multi-year or multi-decade highs. Today itself, 10-year Germany bond yields are back at 3.39% - the highest since 2011.

This is all coming together amid a combination of fiscal and inflation risks, which is threatening to alter the landscape of the market. Here is more context from…

FUNDAMENTAL OVERVIEW

USD:

The US dollar spiked to the upside on Friday after the US NFP report showed job growth in August almost tripling the consensus estimate of 56K. The dollar gains didn’t last long, though, as most of the NFP-driven moves got faded thereafter.

This happened because the market focus was not on the NFP report, but on the CPI. The market pays attention to the data that the central bank is focused on, and the Federal Reserve is currently focused on inflation.

In fact, just a day before the NFP report, Fed’s Waller mentioned that he would support keeping interest rates unchanged at the upcoming FOMC meeting, but a hot CPI would make him consider a…

IC – Europe Fundamental Forecast | 08 September 2026

What happened in the Asia session?

Japan’s stronger-than-expected GDP and particularly strong wage growth have reinforced expectations that the BOJ could tighten policy, driving USD/JPY sharply lower. At the same time, renewed Iran-U.S. tensions are keeping Brent crude near $97–98, increasing concerns about another inflationary shock. Gold is benefiting from geopolitical uncertainty and dollar weakness, while equities are more mixed as higher energy prices threaten corporate margins and inflation expectations.

What does it mean for the Europe & US sessions?

Today’s European and U.S. sessions are likely to be driven more by central-bank expectations and geopolitical risk than by a single…

• France July trade balance -€6.67 billion
• Prior -€5.85 billion; revised to -€5.75 billion

The breakdownThe French trade widened in July as exports grew a little to €54.68 billion from €54.49 billion in June. Meanwhile, imports grew by more to €61.35 billion from €60.24 billion in the month before.

This continues to reinforce the narrative of the trade deficit widening after the US-Iran conflict due to higher energy imports before pulling back a little in June. That being said, Q2 still marked a deterioration in France's trade balance due to import growth exceeding export growth.

What does the data measure?France’s trade balance measures the difference between goods exports and imports. It shows whether external trade is adding to or…

●         Asian Stock Markets : Nikkei up 0.29%, Shanghai Composite up 0.36% Hang Seng down 0.27% ASX down 0.74%

●        Commodities : Gold at $4,483.05 (0.14%) Silver at $67.637 (1.33%), Brent Oil at 97.50 (0.52%), WTI Oil at 92.89 (1.54%)

●        Rates : US 10-year yield at 4.776, UK 10-year yield at 5.1802, Germany 10-year yield at 3.3842

●        (JPY)     Final GDP Price Index y/y   2.6% to 2.6%  expected

U.S. stock futures opened the shortened trading week lower as investors monitored escalating tensions in the Middle East and renewed trade friction between the U.S. and Canada.

Dow Jones Industrial Average futures fell 308 points, or 0.6%, while S&P 500 futures…

Here's a look at how things are playing out at the open:

• Eurostoxx -0.2%
• Germany DAX -0.2%
• France CAC 40 -0.3%
• UK FTSE -0.1%
• Spain IBEX -0.4%
• Italy FTSE MIB -0.4%

What is driving stocks at the open today?

Oil prices and geopolitics remain the main drag from a macro perspective. Brent crude is pushing to $98.70 while WTI crude is rising back above $94 today amid continued tensions between the US and Iran.

And higher energy prices are pretty much just reinforcing inflation concerns, as markets prepare for Thursday's ECB decision - where a 25 bps rate hike is widely expected.

Higher bond yields are also a key consideration, with 10-year yields in Germany keeping at around 3.38% - around its highest levels since 2011.

Looking over to the other side, US…

Geopolitics Dominating Market Flows – Oil up another 1%

US markets were closed for a bank holiday yesterday, resulting in relatively limited moves across financial markets, particularly during the final trading session. Despite the quieter conditions, global markets remain on alert as oil prices continued to rise amid the ongoing conflict in the Middle East.

With US traders returning to their desks today, attention will likely turn back towards the broader geopolitical backdrop and its potential impact on risk sentiment.

In FX, the US Dollar Index fell 0.25% to 98.93, while the Japanese yen continued to strengthen, reaching a fresh seven-month high against the dollar. The yen’s recent gains come as markets turn significantly more…

IC – Asia Fundamental Forecast | 08 September 2026

What happened in the U.S. session?

The combination of stronger U.S. employment data and a renewed oil-driven inflation shock. The strong jobs report has increased the possibility of a Fed rate hike this month, supporting Treasury yields, but the dollar has struggled to sustain its gains. Meanwhile, escalating tensions around the Strait of Hormuz have pushed oil sharply higher, creating another potential source of inflation. With U.S. CPI due Friday, markets are likely to remain highly sensitive to oil prices, Treasury yields and Fed expectations throughout the week.

What does it mean for the Asia Session?

The escalating U.S.–Iran confrontation and uncertainty around the Strait of Hormuz…

• Germany July trade balance €21.3 billion vs €15.9 billion expected
• Prior €15.4 billion
• Germany July exports -0.8% vs +0.1% m/m expected
• Prior +0.9%
• Germany July imports -5.7% vs -0.9% m/m expected
• Prior +4.4%

The breakdownThe German trade surplus widened in July but it comes as both exports and imports falling on the month. In particular, the latter dropped heavily with weakness from China being rather evident.

Exports to the US were a standout, climbing by over 19% compared to June. However, exports to the likes of the UK and China fell notably by over 7% and over 9% respectively.

Looking to imports, the big drag comes from China as imports from the Asian country dropped markedly by over 7% in July.

So while the headline trade surplus looks…

There is one expiry level to take note of on the day, as highlighted in bold below.

That being for EUR/USD at the 1.1650 level. The expiries here may factor into play in attracting more two-way flows closer to the level, potentially leading to stickier and/or choppier price action around 1.1650.

However, there is also the technical aspect to consider. There is resistance from the 200-day moving average at 1.1631 in play, and that has limited upside potential in EUR/USD since last week already. So, that alongside the expiries should help to keep price action in check for the session ahead; barring any major surprises that is.

There is a larger one at the 1.1700 level but is not immediately relevant as of yet. It may only take on added…