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ECB policymaker Nagel is still worried about the inflation outlook, although his latest comments don't sound like a signal that the central bank needs to rush into another rate hike later this month.

His main points today were:

• Inflation risks remain tilted to the upside
• Higher energy prices could keep inflation elevated for longer
• There are no clear signs of second-round effects taking hold just yet
• Longer-term inflation expectations remain broadly anchored around the ECB's 2% target
• The ECB should remain flexible and respond to incoming data

The main takeaway here is that Nagel signalled that there is still an absence of "inflation feeding through to price and wage setting". That plays down concerns about second-round effects and is a hint…

FUNDAMENTAL OVERVIEW

Bitcoin couldn’t extend the gains on Friday despite a soft NFP reportand the cryptocurrency eventually ended the day negative.

There wasn’t any bearish catalyst for the downside move, it’s just that the NFP report didn’t matter much in the bigger picture since the totality of the US data continues to be strong and the US-Iran negotiations remain at a stalemate.

Over the weekend, Bitcoin recovered Friday’s losses and it’s now trading at pre-NFP levels. Given a very light calendar this week, the focus will likely remain on US-Iran developments.

If we get a breakthrough, we can expect oil prices to drop significantly and give Bitcoin a boost on lower rate hike…

• Eurostoxx -0.3%
• Germany DAX -0.2%
• France CAC 40 -0.9%
• UK FTSE flat
• Spain IBEX flat
• Italy FTSE MIB -0.2%

European indices are starting the week on a slightly softer footing, although the losses are relatively contained outside of France.

The CAC 40 is the clear laggard, falling by 0.9% as concerns surrounding France's fiscal position continue to unsettle investors. The pressure is also showing up prominently in French bonds and the euro, with EUR/USD sliding to a 17-month low earlier today.

That leaves France looking like its own problem for European markets at the moment, with the spread between French and German 10-year yields widening beyond 150 bps on Friday - the largest gap since 2012. So, that reflects the growing concerns over France's…

FUNDAMENTAL OVERVIEW

Gold briefly spiked to the upside on Friday following the softer than expected NFP report, but the gains were quickly faded. There wasn’t any bearish catalyst for the downside move, it’s just that the NFP report didn’t matter that much in the bigger picture.

In fact, one soft NFP doesn’t change the series of very strong US data and the US-Iran stalemate. The only thing we got out of it is an even lower probability of a Fed rate hike in October. Those probabilities, though, could still rise if the US CPI next week surprises to the upside.

This week, we don’t have anything on the agenda, so the focus will likely be on US-Iran developments, and the…

In trading, an important lesson that one will learn over time is that markets have habits.

Now, that doesn't mean that they repeat themselves perfectly from one year to the next. However, certain months have a habit of producing similar moves often enough that it makes traders pay attention. And that is essentially what seasonality is about.

It's simply looking back at how an asset has behaved during the same period in previous years and ask the question of whether there is a pattern worth keeping in mind this time around.

That being said, this is not a predictive tool. If stocks have historically performed well in October, that doesn't mean that they are automatically going to trade higher this month. In my view, what makes seasonality a…

There's a light week ahead, as is usually the case following the NFP. Monday starts with services PMI releases for the Eurozone, the U.K., and the U.S.

On Tuesday, BoJ Governor Ueda will speak at the National Securities Conference in Tokyo, while Australia will get the Westpac consumer sentiment report.

On Wednesday, Japan will release the average cash earnings y/y and the leading indicators. In the U.S., the focus will be on the FOMC meeting minutes and on Thursday, we'll get the unemployment claims figures.

Finally, on Friday, Canada will publish the employment change data and the unemployment rate, while the U.S. will release the preliminary UoM consumer sentiment and preliminary UoM inflation expectations.

Some FOMC members are…

There aren't any major expiries to take note of on the day, with there being no particular expiry levels sitting close enough to spot to have a strong pull on price. The full list can be seen below.

There are some larger expiries for EUR/USD at 1.1300 and 1.1325, but they are simply too far away from current levels to be particularly relevant for now.

It is the same case for USD/JPY, with the much larger $2.0 billion expiry at 156.00 being nearly 180 pips away. As such, that should have little practical influence unless USD/JPY sees a sizeable move lower in the session ahead.

Given the above backdrop, trading sentiment today will continue to ride on macro factors more than anything else. In that respect, the bond market will continue to be…

If something can’t go up on good news, that is rarely a good sign in markets.

In theory, the softer US jobs report at the end of last week should have been a clean setup for gold. The non-farm payrolls figure rose by just 29k in September, well below expectations around 90k, while the unemployment rate ticked up to 4.2%.

While that was enough to cool expectations for another Fed rate hike this month, gold has struggled to turn that into any meaningful upside.

The main problem for the precious metal right now is that the bond market is still refusing to play along. 10-year Treasury yields briefly fell towards 5.16% after the jobs data before snapping back higher, and they remain elevated near multi-decade highs around 5.26% today.

That…

The softer US jobs report on Friday might have offered markets some much-needed relief before the weekend but I don't think it changes the main thing traders should be watching this week. And that is still the bond market.

The September jobs report showed non-farm payrolls rising by just 29k, well below expectations. 10-year Treasury yields initially fell on the release, dipping to a low 5.16%. However, that didn't last long whatsoever. Yields quickly bounced back to wrap up the week near 5.28%, highlighting just how fragile the relief in the bond market remains.

In seeing that reaction, I would argue that the rebound in yields says a lot more than the initial drop to the labour market data.

While the jobs numbers have certainly taken some…

• Japan officials toughen tone on yen as USD/JPY holds near 158
• Nikkei jumps 2.5% to three-month high as AI stocks rally on softer Fed hike bets
• Saudi Aramco cuts Arab Light price to Asia by $3, widest discount since 2020
• Fed minutes preview: one more hike guidance meets softer data as October odds fade
• Oil slips toward $102 (brent) as G7 stock release and rising Gulf exports offset Houthi attacks
• More: Russia says no lab pathogen found in plague institute death, 189 under observation
• Bitcoin ETF inflows fuelled September's rebound, but the momentum has faded
• Japan services PMI eases to 51.3 as hiring picks up and price pressures stay intense
• ANZ commodity index rises 0.6% in September as oil surge lifts milk powder and aluminium
• BOJ's Uchida says…

Tokyo's coordinated messaging adds a political layer to the yen story. The government appears to be preparing the ground for further BOJ tightening and warning against yen weakness, which raises the bar for USD/JPY to push toward 160. For now, high US yields and haven demand for the dollar are overpowering the rhetoric, and oil above $100 is a key part of that support. A break of the September 8 low near 152.89 would be the technical signal that the narrative has shifted. Easing Middle East tensions, softer US data or a hawkish BOJ surprise could all be catalysts. Equity investors should note that a stronger yen would weigh on Japan's exporters, a counterweight to the current AI-led rally.

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Tokyo is talking up the yen and talking down…

The Nikkei's outperformance versus the Topix shows a narrow, tech-led rally sensitive to global AI sentiment and US rate expectations, not a broad re-rating of Japanese equities. The softer Fed outlook is supportive for risk, but it cuts both ways for Japan. A stronger yen, if the BOJ hikes while the Fed pauses, would weigh on exporters and could cap gains. This week's Fed minutes are the next test: a hawkish tone could quickly reverse Friday's relief rally. With oil still elevated and service-sector prices rising fast, the backdrop for a BOJ move remains in place, which is a headwind for the yen-sensitive parts of the market.

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Earlier:

• BOJ's Uchida says AI is a big demand shock lifting prices, warns of correction risk

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Japan's AI…