Market News

The pressure valve is back on. European equities are facing a rough start to the day, with French fiscal concerns and broader bond market worries continuing to weigh on investor sentiment.

• Eurostoxx -1.5%
• Germany DAX -1.0%
• France CAC 40 -1.4%
• UK FTSE 100 -0.5%
• Spain IBEX -1.4%
• Italy FTSE MIB -0.2%

It's an ugly one as the calmer mood from yesterday has totally been wiped out. While the selling is only returning today, the warning signs have been there all through the week - especially in the bond market.

French borrowing costs are once again surging, with 10-year yields pushing above the 5% level for the first time since 2002. Meanwhile, the France-Germany 10-year yield spread has pushed beyond 160 bps now, reaching levels last seen during the…

US Stocks Rally Ahead of Key Earnings – Nasdaq Jumps 1.05%

US equity markets pushed higher in trading yesterday as investors positioned themselves ahead of key earnings updates from Tesla and Meta. The Nasdaq led the gains, jumping 1.05% to close at 26,702, while the Dow Jones Industrial Average advanced 0.69% to finish at 52,856. The S&P 500 also recorded a solid session, gaining 0.58% to close at 7,757. Technology stocks returned to favour ahead of the earnings announcements, with both Tesla and Meta reporting after the closing bell. Tesla beat market estimates, while Meta confirmed plans to increase spending on artificial intelligence, keeping the tech sector firmly in focus for investors in the coming sessions.

US Treasury…

●         Asian Stock Markets : Nikkei down 1.76%, Shanghai Composite down 0.89% Hang Seng down 2.91% ASX down 0.38%

●        Commodities : Gold at $4,107.70 (-1.04%) Silver at $56.390 (-2.28%), Brent Oil at 110.68 (1.73%), WTI Oil at 98.52 (1.41%)

●        Rates : US 10-year yield at 5.086, UK 10-year yield at 5.3833, Germany 10-year yield at 3.4151

●        (USD)   Crude Oil Inventories  3.1M to 0.1M  expected

U.S. stocks rose on Wednesday as strong revenue growth at SpaceX and potential merger discussions with Tesla boosted technology shares and renewed enthusiasm for artificial intelligence-related investments.

The Nasdaq Composite gained 1.05% to close at 26,702.86,…

If you look at EUR/USD this week, it may be easy to think that the euro is holding up and brushing aside the warning signals from the bond market. But in taking a step back, you might find that perhaps EUR/USD is not giving markets the full picture of the risks surrounding the euro at the moment.

The currency pair is holding up decently this week, trading around 1.1240 levels today after bouncing off support near 1.1200 on Monday. However, I wouldn't want to mistake that resilience for a sign that traders are becoming more comfortable with Europe's underlying problems.

I mean, the fact of the matter is that the bond market is telling us quite the opposite. The France-Germany 10-year yield spread has now widened to around 161 basis points,…

• France October business confidence 97 vs 96 expected
• Prior 96
• France October industrial confidence 105
• Prior 101
• France October services confidence 99
• Prior 98

The overall business climate picked up slightly in October but remains below the long-term average estimate of 100 for yet another month. For some context, the last time the business confidence index met the key level was all the way back in June 2024.

While there are improvements in confidence levels for both the manufacturing and services sectors, the report is not all sunshine and rainbows. Retail trade confidence fell by 3 points to 93 in October, marking the lowest estimate since June. Meanwhile, the employment index also fell significantly to 95 - its lowest since May. INSEE notes…

While we haven't seen things escalate further recently, it is best to be reminded that US-Iran tensions are still very much simmering beneath the surface. And the IRGC is offering a reminder of that as they claim that four vessels were hit and caught fire in the northern Gulf, while three other vessels were reportedly struck by mines west of the Strait of Hormuz overnight.

Besides that, Tehran is also warning that its response could extend to US bases across the region if Washington continues to encourage vessels to cross the Strait of Hormuz.

The major concern here remains the fact that shipping through one of the world's most important energy routes remains vulnerable to further disruption. And even if oil supplies continue to flow, the…

Uh oh. Gold is starting to find itself in a bit of a pickle again in trading this week, with price now falling below $4,100 today as sellers look to try and tighten their grip on the precious metal.

The setup for gold over the past few weeks has been defined by the range around $4,100 to $4,200 for the most part. And yesterday, we started to see price action invite a test of the downside range. Today, that very floor is now being threatened and buyers are surely starting to sweat now when you look at how things are playing out.

As things stand, the broader fundamental backdrop remains challenging for gold. While Treasury yields are not returning to multi-decade highs yet, they are still at elevated levels which are keeping a non-yielding…

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

The first one is for EUR/USD at the 1.1200 level, with the strike some 40 pips away from the spot price. The expiries could be relevant for nearby price action, especially if the euro comes under renewed selling pressure. But with the dollar also trading more choppily this week, things can work both ways. And while not immediately highlighted, the expiries at 1.1300 could also come into play if we do see EUR/USD nudge higher in the session ahead. For now though, that concentration should not exert much immediate influence.

In short, the pair is sort of caught in the middle and the influence of the expiries will depend on the directional move in…

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• Bitmine’s 5% hard cap leaves Ether’s biggest corporate buyer weeks from the exit
• Ray Dalio warns US bond bear market has a long way to go as debt supply swamps demand
• US and Israel plan specific renewed Iran strikes after US midterms,…

With an October 30 move ruled out by every economist surveyed, the yen’s direction is likely to hinge on the tone of the BOJ’s statement and outlook report. A declaration that underlying inflation has reached 2% would mark a historic shift and strengthen expectations of a December hike. That could support the yen and push Japanese government bond yields higher. Board voting is another swing factor: further dissent from Takaichi-appointed members would likely weigh on the yen, while a call for a hike by a hawkish member would have the opposite effect. Oil prices remain a key influence on Japan’s inflation outlook as a major energy importer. Any escalation in the Middle East that lifts crude would add to the case for steady quarterly hikes,…

The deal shows hyperscalers are now willing to underwrite long-term fuel infrastructure, not just compute, to secure power. That reinforces natural gas as the main bridge fuel for the AI build-out. For the gas market, Permian Link adds about 2.8 billion cubic feet a day of takeaway capacity from the Permian Basin. That should help ease pipeline constraints that have periodically pushed local Waha gas prices deeply negative, while lifting structural demand for US gas over the decade. Midstream operators with Permian and Southeast exposure are likely to benefit from a growing pipeline of data centre and utility contracts. Long-dated take-or-pay commitments make their earnings more predictable. The 2030 start dates highlight a timing gap,…

For the oil market, the loss of Iranian barrels is being offset by non-Iranian Gulf supply, which is flowing through the Strait of Hormuz above prewar levels under US protection. That helps explain why the depletion is not by itself a fresh supply shock. The more immediate effect is a reshuffling of trade flows: Chinese refiners, particularly independents that relied on discounted Iranian crude, are buying more from Brazil and West Africa, which could tighten Atlantic Basin grades and lift their premiums. The bigger risk is escalation. With its main revenue source shut off, Tehran has fewer economic options and more incentive to use energy disruption as leverage, which keeps a geopolitical risk premium in crude. Any move to strike Gulf…