Market News

A heads up for AUD traders, it's a Sydney holiday today. The Australian Stock Exchange (ASX) is open as normal but AUD liqudiity will be somewhat thinned out by Sydney's absence.  

The data agenda has data unlikely to impact too kmuch upon release. 

I’ve noted data for New Zealand and Australia with text as the similarity of the little flags can sometimes be confusing.

There's no direct market read-through yet, because officials describe the situation as stable and close contacts have so far tested negative. And we all trust Russian officials, right? RIGHT?

Unconfirmed health scares can still feed short bursts of risk aversion, especially if social media gets ahead of official findings. The key risk would be confirmation of a transmissible pathogen with spread beyond close contacts, which could weigh on sentiment and lift safe havens. The nearby aluminium plant's mask precaution is worth watching in case the scare starts to disrupt local industry.

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Earlier:

• Wuhan, covid, lock downs .... but its too early to link to all that, I hope 

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A death at a Siberian plague laboratory has Russian officials racing…

Chalmers's warning on debt servicing costs puts the spotlight on the global rise in bond yields, which is now feeding directly into government budget arithmetic. That keeps fiscal supply and credit concerns on the radar for Australian government bonds ahead of the mid-year update. His focus on energy-driven inflation reinforces the case that oil is the main channel through which the Iran war reaches the Australian economy. Any prolonged disruption to Gulf supply keeps upward pressure on both prices and the RBA. The Japan visit, centred on fuel security, also highlights how energy-importing economies in Asia are coordinating their response to the oil shock.

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Australia's treasurer says the Iran war is a disaster for the economy, with the…

If confirmed, the remarks are negative for any near-term supply relief, as they tie the reopening of Hormuz to conditions Washington has shown no sign of accepting. That supports the war-risk premium in crude, especially in prompt Brent spreads. The threat of military "surprises" adds tail risk to Gulf shipping and energy infrastructure. Traders will be cautious about the unverified source, so the initial reaction may be muted. Any official confirmation from Tehran, or a US denial, could move prices quickly. The suggestion of a back channel also cuts the other way: it implies diplomacy has not fully broken down, which may limit how far traders chase prices higher.

Newswire cut: Iran's parliament speaker Ghalibaf reportedly says Tehran will…

Gold Futures tradeCompass: GC bearish below 4195, bulls need 4217

Gold futures remain tactically bearish while price holds below 4195, with the supplied 4-hour snapshot showing GC near 4168 after a sharp rejection from 4259. The immediate complication is that sellers are already close to first support at 4155, so the directional bias may be bearish without the current price necessarily offering an attractive fresh short.

The more important question for the new trading week is therefore not simply whether gold is bearish or bullish. It is whether sellers can force sustained trade below the recent lows, or whether buyers can repair the damage by reclaiming the 4195-4217 decision zone.

Prediction Score: -5 / 10

The score represents a bearish…

The survey sends mixed signals for the Australian dollar and rates. Slower activity, job shedding and weaker confidence argue against further tightening. Accelerating output price inflation, running above its long-run average, supports the case for the RBA to stay hawkish. On balance, the inflation detail is likely to matter more to rate pricing, which limits the downside for the Australian dollar and front-end yields from the softer activity numbers. Fuel costs were again cited as a driver of input prices, so the oil price remains an important input to the RBA's inflation outlook. Upcoming official CPI and labour market data will be watched to see whether they confirm the PMI's signals.

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Earlier:

• Australia manufacturing PMI falls to 49.6…

The rollover keeps the supply picture unchanged, and that picture is tight. Brent is still above $100 a barrel, up from about $73 before the war began in late February. Friday's dip on Europe's agreement to release diesel reserves at Washington's request looks like relief, not a turn in the trend. With physical barrels constrained by war-related export disruption rather than by policy, OPEC+ ceilings have little near-term pricing power. Traders are watching Hormuz flows and Gulf export data more closely than quota headlines. The delayed capacity review also leaves the 2027 supply path uncertain. That keeps a risk premium on longer-dated contracts and raises the chance of quota disputes once flows normalise.

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Earlier:

• All B-1 bombers…

France is becoming Europe’s new fiscal stress test: what it means for bonds, EUR/USD and the CAC 40

France is no longer being treated by markets as an unquestionably "core" European sovereign. The clearest warning is coming from government bonds: investors are demanding a larger premium to lend to France than to Italy. That does not mean a French debt crisis is inevitable, but if the trend continues, the consequences could reach the euro, European banks and French equities.

For traders and investors, the important point is not simply that French borrowing costs have risen. It is that France is being repriced relative to the rest of Europe.

The bond market is sending a message about France

Vanguard, one of the world's largest asset managers,…

The immediate gold price impact is likely to be limited, but the case is a structural risk to how the bullion market operates. Good Delivery accreditation underpins the fungibility of London bars and the delivery specs of futures exchanges. Any disruption to the list, or a messy handover to a successor body, could add friction and cost to trading, refining and settlement. Refiners could also face tougher supply-chain scrutiny if the ruling sets a broad precedent. That risk could spread to metals markets that use similar sourcing systems. Traders gathering at the LBMA's annual conference will be watching the opening days of the trial closely.

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Earlier, a fiu=ght about the $4K level:

• Oil is gold's biggest enemy right now, Bank of America…

Early FX indications, not much change from late Friday so far

• EUR/USD 1.1257
• USD/JPY 157.73
• GBP/USD 1.3241
• USD/CHF 0.8289
• USD/CAD 1.4256
• AUD/USD 0.6957 (ps. it's a partial holiday in Australia today, but the Australian Securities Exchange is open as normal)
• NZD/USD 0.5620 (I nearly wrote 0.5260 ... need more coffeee...) 

For oil, the move is a reminder that the Iran conflict now reaches allied military infrastructure in Europe. That keeps geopolitical risk elevated in crude pricing even with no direct supply disruption. Relocating the bombers to the continental US doesn't reduce Washington's strike capacity, so traders are unlikely to read it as de-escalation. Any firmer evidence of direct Iranian state involvement in a plot on British soil could raise the risk premium further. It could also prompt questions about Western retaliation and the security of energy shipping routes. The muted, uncertain UK assessment may limit the immediate reaction, but it leaves a headline risk hanging over the oil complex.

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A suspected Iran-linked plot against a British…

S&P 500 futures test whether the channel breakout can hold

S&P 500 E-mini futures have improved after breaking out of the broader descending channel that contained much of the August-to-September pullback. But the four-hour chart is now at the more interesting stage: not whether price can briefly rise above resistance, but whether buyers can keep it there.

After reaching 7,848.50 on September 22, ES pulled back through a sequence of lower highs and eventually fell to apx 7,672 on October 1. The rebound from that low has been sharp. Price reached 7,810.25 on October 2 before finishing the latest four-hour bar at 7,776.50.

That puts ES around the shorter descending trendline drawn from the September high. The move above it is encouraging, but…