Market News

FUNDAMENTAL OVERVIEW

Ethereum has come under some pressure recently as US-Iran tensions dominated the price action.   The negative sentiment started last Wednesday when Trump poured cold water on expectations of an earlier end to the Iran war after he repeated that the US would make a deal with Tehran after the November elections.

Heading into the weekend though, the hopes for a US-Iran deal returned after Iran sent a proposal to reopen the Strait of Hormuz within seven days on certain conditions. Unfortunately, Trump rejected the proposal on Saturday and told reporters that he expected to resume bombing Iran after the midterms. That has kept a lid on the crypto market.

If there's one thing that stands out after the RBA decision today, it is that AUD/USD still can't catch a meaningful bid even after the rate hike.

The RBA raised the cash rate by 25 bps to 4.60%, its highest since 2011. On paper, you would think that should be supportive for the aussie. Instead, AUD/USD has slipped below 0.7000 and the technical picture is starting to look increasingly uncomfortable for the currency pair.

The chart is the key one for me here. AUD/USD is threatening a break of a couple of important levels at roughly the same time.

The fall last week already looks to hold below the key rising trendline from the June to July lows but now we're also getting a firm break below the 200-day moving average (blue line) as well as the…

• Spain September preliminary CPI +4.9% vs +4.6% y/y expected
• Prior +4.3%
• Spain September preliminary HICP +5.0% vs +4.9% y/y expected
• Prior +4.6%

The breakdownThe numbers are running hotter than expected with headline annual inflation climbing to 4.9%, its highest since February 2023.

Meanwhile, core annual inflation is also seen accelerating further from 2.9% to 3.1% in September. That suggests the rise in price pressures is starting to become broader, and not just isolated within energy prices. The jump here marks the highest level for core annual inflation since March 2024.

This may just be one reading but if the trend in Spain feeds through to the region more broadly, it could very well push expectations for a quicker move by the ECB on…

FUNDAMENTAL OVERVIEW

Gold sold off hard yesterday after Trump on Saturday rejected the Iranian proposal to reopen the Strait of Hormuz and told reporters that he expected to resume bombing Iran after the midterms.

Things were looking very bleak, but we started to get some positive headlines during the American session pointing to possible US concessions.

According to Axios, Trump reportedly offered Iran sanctions relief and access to frozen funds in exchange for progress on nuclear program, but the US President later denied such reports.

He did confirm though that the American and Iranian negotiators are engaged in talks through mediators. Iranian…

• Eurostoxx +0.4%
• Germany DAX -0.2%
• France CAC 40 flat
• UK FTSE +0.3%
• Spain IBEX +0.3%
• Italy FTSE MIB +0.6%

European equities are mostly starting the session on the front foot, although I would be careful about reading too much into the modest gains here. It feels like a case of déjà vu to the opening scenes yesterday, with regional stocks ending the day lower in the end.

The big problem for stocks is that the macro backdrop has arguably become even less comfortable overnight.

10-year Treasury yields briefly pushed above 5.27%, their highest since 2007, as markets continue to price in a higher-for-longer global rates environment. Meanwhile, oil prices are rebounding again with Brent crude above $106 as there is still no clear breakthrough in US-Iran…

IC – Asia Fundamental Forecast | 29 September 2026

What happened in the U.S. session?

The U.S. session was dominated by the combination of geopolitical risk, rising oil prices, and higher Treasury yields. The rejection of an Iranian peace proposal pushed Brent above $107 and renewed concerns about energy-driven inflation, which in turn strengthened expectations for further Fed tightening. The resulting rise in yields and firmer dollar weighed heavily on gold, stocks, and major currency pairs, while crude oil was the major beneficiary.

For the next session, traders will be watching Australian RBA developments, Canadian GDP, U.S. Consumer Confidence, and JOLTS Job Openings with particular attention on whether the U.S. labor data reinforces…

IC – Europe Fundamental Forecast | 29 September 2026

What happened in the Asia session?

Asia traded defensively as renewed uncertainty over the Strait of Hormuz and conflicting U.S.–Iran headlines kept crude oil prices elevated, while U.S. Treasury yields near multi-year highs strengthened the dollar and pressured equities, bonds, and precious metals. The clearest regional macro release was Australia’s flat August household spending, which missed expectations and initially weighed on the AUD. However, the Australian dollar remained supported after the Reserve Bank of Australia delivered a 25-basis-point rate hike, lifting the cash rate to 4.60%, its highest level in 15 years.

What does it mean for the European & US sessions?

Energy-driven…

US Stocks Fall as Middle East Conflict Rolls On – Nasdaq down 0.9%

Global markets started the week on the back foot, with U.S. equity markets finishing lower as optimism surrounding a potential Middle East peace agreement faded following President Trump’s rejection of Iran’s latest proposal. The Dow Jones declined 0.67% to close at 51,481, while the S&P 500 fell 0.77% to 7,683. The Nasdaq recorded the largest decline of the major indices, dropping 0.92% to finish at 26,820.

U.S. Treasury yields moved sharply higher as investors continued to assess the inflationary and monetary policy implications of elevated energy prices and ongoing geopolitical uncertainty. The policy-sensitive 2-year yield rose 7.9 basis points to 4.931%, while…

RBA governor, Michele Bullock's press conference is a rather interesting one today. She did her part in clarifying the rate decision and how upside risks to inflation are playing out, but at the same time she is also trying to stop markets from turning tomorrow’s August CPI report into an all-or-nothing signal for the next policy move.

Bullock said that she would not put "too much emphasis" on the number, arguing that the RBA needs to think forward rather than react mechanically to data showing what happened a month ago.

The key point here is essentially the lag from monetary policy.

Before today, the RBA had already raised interest rates three times between February and May. And Bullock mentions that the full impact can take 12 to 18 months…

Iran foreign minister, Abbas Araqchi, says that Tehran expects to receive a US response today to its latest proposal surrounding the reopening of the Strait of Hormuz.

That keeps the diplomatic door open somewhat, even after US president Trump publicly rejected Iran's original seven-day proposal over the weekend. Since then, the situation has become slightly more complicated.

US and Iranian officials reportedly held separate talks with mediators on Monday, with further discussions expected to focus on an amended version of Tehran's initial proposal. That being said, Iran continues to tie the reopening of the Strait of Hormuz to specific conditions. That includes an end to hostilities, sanctions relief and the lifting of the US naval blockade.

Bullock is commenting in her press conference:

• We only considered holding rates and a 25 bps rate hike as our options today
• Will raise interest rates again if needed
• Inflationary pressures to last longer than expected
• Inflation is driven by domestic capacity pressures
• One upside risk to inflation risk has materialised, two are building
• Need to bring excess demand down, a recession is not in our central case
• Will not put too much emphasis on the August CPI number
• We think that financial conditions are restrictive
• If inflation does come down, then it is possible that no more rate hikes may be needed
• Sees bond market reacting in an orderly way still, watching the situation closely

More to follow..