Market News

IC – Europe Fundamental Forecast | 26 October 2026

What happened in the Asia session?

Asian markets started Monday cautiously as oil retreated from six-month highs following reports of diplomatic efforts to ease Middle East tensions. However, crude remains expensive, keeping inflation and energy-supply concerns alive. Asian equities weakened, the yen remained sensitive to expectations for BOJ policy, and gold hovered near $4,000 amid competing safe-haven and interest-rate forces.

What does it mean for the European & US sessions?

Markets begin Monday focused on oil prices, Middle East tensions, Treasury yields, and expectations for this week’s central bank decisions. Oil has retreated from last week’s highs, easing some inflationary…

Gold is finding itself in a rather troubling spot to kick start the new week as we see price continue to test a potential break below the $4,000 mark. Looking at the chart, this will be a rather important test for buyers if they are to try and hold on to some semblance of hope for a rebound in ending October trading.

Despite ongoing geopolitical uncertainty and the recent retreat in Treasury yields, gold has struggled to find much upside traction lately. The rebound in August and September has faded completely and we're now seeing a pattern of lower highs, lower lows develop as sellers gradually regain the upper hand.

The $4,000 level is still holding for now, with price hovering around $4,007. So, I wouldn't go as far as calling this a…

US Stocks Slide as Oil Surges to Six-Month Highs – Dow Jones Down 1.23%

US stock markets finished the trading week firmly in negative territory on Friday as investors continued to digest key earnings updates and escalating geopolitical tensions in the Middle East. The Dow Jones led the declines, dropping 1.23% to close at 52,215, while the S&P 500 lost 0.52% to finish at 7,623. The Nasdaq held up relatively better but still slipped 0.21% to close at 25,955. Investors remain cautious as earnings season continues, with geopolitical uncertainty and elevated energy prices adding further pressure to market sentiment.

US Treasury yields bounced back after Thursday’s sharp sell-off, with both the 2-year and 10-year yields climbing 4.2…

After a rough few weeks in October, the euro is finding a bit of reprieve against the franc since the end of last week. EUR/CHF is bouncing off the 0.9200 level towards 0.9245 today but this the start of a proper recovery or merely a breather before another leg lower?

For now, I would argue that the technical picture still favours sellers despite the latest bounce.

Looking at the daily chart, the pair has already broken below its trendline support from the March to May lows, the 100-day moving average (red line), and the 0.9300 level earlier this month. That puts buyers in a rather uncomfortable position, with the latter now acting as a key resistance level alongside the broken trendline.

Meanwhile, the hourly chart shows the rebound running…

This is just a quick heads up for traders before we get too far into the new trading week. If you're wondering why European markets seem to be opening a little later than usual today, well it is because we're back to that time of the year again.

Daylight saving time ended across most of Europe over the weekend, with clocks moving back one hour on Sunday, 25 October. That means the UK is now back on GMT time, while much of continental Europe has switched to CET time.

For those of you trading from outside Europe, particularly in Asia, this means European market openings and economic data releases will now arrive one hour later on your local clock. For example, the London stock market will now open at 16:00 in Singapore and Hong Kong instead…

There are a couple of key expiry levels to take note of on the day, as highlighted in bold below.

The main one to watch is for EUR/USD at the 1.1200 level, with the strike keeping within 20 pips of the spot price. That could offer a bit of a magnetic pull on price action during the session ahead, especially if trading conditions remain relatively subdued. Besides that, there is also one at the 1.1250 level and together with the one at 1.1200 they could help keep price action more contained between the two levels.

That is especially the case as the technicals are showing that near-term price action remains caught in between the key hourly moving averages around 1.1215-20 mostly. And also, downside price action is being defended around the…

The central bank bonanza is back in town this week, with five big names lining up to announce their latest monetary policy decisions. After all the recent drama involving oil prices, bond yields, and the stock market, perhaps it is time for central bankers to have their say again.

Of note, we will have the RBNZ, BOC, Fed, ECB, and BOJ all on the agenda this week. And looking to market pricing, traders seem to have a pretty good idea of what to expect already from the decisions to come. So, the only question is will there be any surprises? Let's see.

The RBNZ will kick things off on Wednesday with traders fully pricing in a 25 bps rate hike. That leaves little suspense surrounding the decision itself, although traders will be watching for…

The Tokyo ETF move is an early and thin-volume signal, so the real test comes when Brazilian markets open, with the real, the local rates curve and the Bovespa likely to bear the brunt of any repricing. Goldman Sachs’ figures describe an extreme scenario rather than a base case, but they frame the scale of the potential move, with the long end of the curve and the currency most exposed. Positioning matters: markets rallied after the first round on expectations of a different outcome, so some of the selling may reflect that trade being unwound rather than a fresh view on policy. Spillover to other Latin American currencies and EM risk sentiment is possible if the selloff is disorderly, while a contained reaction could see dip-buyers emerge…

• Brazil ETF tumbles nearly 15% in Tokyo after Lula’s comeback runoff win
• Saudi Arabia to store crude in Singapore caverns from 2027 as Hormuz disruption bites
• Goldman’s 79-tonne central bank gold estimate goes mainstream as reserves shift to London
• BOJ to hold at 1.25%, but Ueda signals further hikes toward neutral
• PBOC sets USD/ CNY reference rate for today at 6.7162 (vs. estimate at 6.6691)
• Gold dips below $4,000 as long liquidation swamps ETF buying, Saxo Bank says
• Musk says SpaceX closed $40 billion GPU debt deal, predicts neocloud shakeout
• ECB set to hold at 2.50% as Morgan Stanley sees December as natural moment for next hike
• Nikkei slips, bounces, as Iran oil fears weigh; ING sees BOJ holding at 1.25%, two hikes in 2027
• Gold dips below…

Heavy official-sector buying offers a structural cushion beneath gold just as speculative liquidation has dragged prices below $4,000, and it supports the argument that dips are being absorbed by long-term buyers. It does not guarantee a floor, however: near-term direction still depends on oil, yields and Fed expectations, and central bank demand did not prevent last week’s slide. The gap between Goldman’s flow-based estimate and officially reported purchases suggests accumulation may be larger than disclosed, which matters for the longer-run supply-demand balance. The shift of holdings from New York to London is a reserve-management story rather than an immediate price driver, but it adds to debate over the dollar’s role in official…

The arrangement will not add barrels before the second half of 2027, so the near-term price impact is limited, but it signals that producers and consumers expect Strait of Hormuz risk to persist well beyond the current war. Storage closer to Asian refiners would give Saudi Arabia a buffer to keep supplying key customers during future disruptions, helping defend its market share in the region against rival suppliers. Over time, a strategic stockpile in Singapore could reduce the risk premium Asian buyers pay during supply scares and strengthen the city-state’s role as a regional pricing and trading hub. For now, oil markets remain driven by the immediate disruption to Hormuz flows, which this deal does not address.

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With the Strait of…