Market News

In looking at the EUR/USD chart yesterday, it would be easy to write off the drop below 1.1200 as being simply another story about a stronger dollar. However, the euro's slide to a 17-month low around 1.1160 also tells us something about what is happening much closer to home.

Quite simply, France's budget problems are starting to become the euro's problem too.

Now, the concern itself is relatively straightforward. For years, France has been struggling to convince investors that it can meaningfully bring its budget deficit under control - particularly with a divided political backdrop, which makes fiscal tightening even harder to deliver. And that uncertainty has been showing up most clearly in the bond market.

Investors are currently…

France's bond market recently sent a strong message to policymakers. The spread between French and German 10-year government bonds surged above 150 basis points last week, reaching its widest level since the euro-area debt crisis. French borrowing costs approached 5%, while concerns over the country's deficit, debt trajectory and political fragmentation intensified ahead of the 2027 presidential election.

The market reaction is important because it can create a feedback loop. Higher bond yields increase the government's interest bill, which worsens the fiscal outlook, requiring even more borrowing and potentially pushing investors to demand an even larger risk premium. But there is also a good side as the bond market can force…

With all that is happening in markets, there are plenty of charts worth watching in Europe right now. However, this in particular may be one of the most important.

The gap between French and German 10-year bond yields has surged over the past month, as investors are demanding a much bigger premium for holding French government debt over German bunds. The move looks even more striking when you zoom out on the charts.

The yield spread has decisively broken above the roughly 80 bps area that had capped it over the past couple of years. And even after pulling back from above 150 bps last week, it is still sitting around 135 bps currently. For some context, those are levels last associated with the euro area sovereign debt crisis around 2012.

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Nasdaq Rallies to Record Level to Start the Week – Nasdaq up 1.05%

US equity markets moved higher on Monday as investors continued to react positively to Friday’s weaker-than-expected employment report. Technology stocks led the advance, pushing the Nasdaq to another record close. The Dow Jones gained 0.18% to finish at 51,267, while the S&P 500 rose 0.66% to 7,773. The Nasdaq outperformed, climbing 1.05% to a record close of 27,477.

US Treasury yields were mixed across the curve. The policy-sensitive 2-year yield edged 1.3 basis points lower to 4.812%, reflecting the continued reassessment of Federal Reserve rate expectations following the softer labour market data. Further out the curve, however, yields remained under upward…

Global Markets:

●         Asian Stock Markets : Nikkei up 0.58%, Shanghai Composite up 0.31% Hang Seng up 0.62% ASX up 0.54%

●        Commodities : Gold at $4,152.76 (-0.10%) Silver at $60.963 (-0.55%), Brent Oil at 100.82 (0.47%), WTI Oil at 89.82 (0.44%)

●        Rates : US 10-year yield at 5.319, UK 10-year yield at 5.4263, Germany 10-year yield at 3.4922

News & Data:

●        (USD)    ISM Services PMI

       54.9 to 55.1  expected

Markets Update:

The Nasdaq Composite surged to a fresh all-time high on Monday as investors looked past rising U.S. Treasury yields and digested new economic data.

The tech-heavy Nasdaq gained 1.05% to an intraday high of 27,544.07 before closing at a record 27,477.31. The Dow…

Last week, fewer than 25% of S&P 500's constituents were trading above their 50-day moving averages and fewer than 45% above their 200-day moving averages. According to analysts, this represents the weakest breadth ever recorded, suggesting that mega-cap stocks are masking significant weakness underneath the surface.

Historically, similar divergences have been relatively rare and have sometimes appeared before major market peaks, including in 2014 and 2021. However, breadth divergence is not a timing signal by itself.

When the S&P 500 rises, the natural assumption is that the stock market is broadly getting stronger. But an index can rise even when a large portion of its constituents are falling. This is particularly important for…

European stocks are opening higher today, keeping the more optimistic mood as the momentum from Wall Street and Asia carries over into the session. Here are the opening changes:

• Eurostoxx +0.5%
• Germany DAX +0.5%
• France CAC 40 +0.2%
• UK FTSE +0.6%
• Spain IBEX +0.7%
• Italy FTSE MIB +0.7%

The gains are fairly broad-based but France is once again the notable laggard. The CAC 40 is still trading higher, though the smaller gains reflect the fact that investors are not quite ready to look past the country's fiscal troubles just yet.

French government bonds have come under heavy pressure in recent sessions as markets question whether the government can deliver on its budget plans and stabilise the debt outlook. That saw the yields spread between French…

The wait is almost over. iFX EXPO Asia 2026 begins tomorrow, 7 October, bringing the global trading and fintech industry together in Hong Kong. The Welcome Party will open the event tomorrow evening, followed by two days of exhibition, conference sessions and business networking at the Hong Kong Convention and Exhibition Centre on 8–9 October.

With 5,000+ attendees from 130+ countries, 150+ exhibitors and 120+ speakers expected, the event will bring together professionals from across online trading, fintech and financial services.

The week has already started on a strong note, with the iFX EXPO Asia Hackathon bringing developers, innovators and industry…

BOJ governor, Kazuo Ueda, is speaking in Tokyo and there doesn't seem to be any major surprises in his remarks. The message remains quite clear that the central bank still sees room to raise interest rates further.

Here are some of the key comments from Ueda:

• Underlying inflation is approaching 2%
• Economy, prices are moving in line with our baseline forecasts
• Even after September rate hike, accommodative financial conditions continue to support economic recovery
• Will continue to raise policy rate in accordance with economic, price, financial developments
• The pace and timing of future policy adjustments will be decided based on likelihood of our baseline projections materialising as well as the associated risks

The one that catches my attention…

Gold has come under renewed pressure again today as the bond market turns up the heat once more.

The precious metal is trading down 0.3% to $4,125 and remains some distance from the highs above $4,600 just a few weeks ago. The latest breakout in Treasury yields is continuing to make life rather difficult for gold. Now, that part of the story is relatively straightforward. Higher yields raise the opportunity cost of holding a non-yielding asset like gold, which helps explain much of the recent pullback.

While the price momentum is weak, investor positioning tells a slightly different story.

Looking at the chart below, gold prices have fallen sharply from their recent highs but holdings in the SPDR Gold Trust are still sitting close to their…