Headlines:
- EUR/USD rebounds as French government takes steps to reduce deficit, narrowing OAT-Bund spread
- Ethereum consolidates at a major trendline as Glamsterdam hits Sepolia testnet. What’s next?
- The price action in gold remains rangebound as US-Iran stalemate and CPI risk cap the upside
- Connecting the dots: How France’s budget problems are turning into the euro’s problem
- France is having its Liz Truss moment as the bond market forces a policy rethink. Why it’s a good thing.
- Macro pulse: France-Germany yield spread breakout puts euro area contagion risk in focus
- European stock market open: Stocks extend rebound but France continues to lag
- Market breadth divergence: What it tells traders about the stock market
- iFX EXPO Asia 2026 Begins Tomorrow as the Global Trading Industry Gathers in Hong Kong
- BOJ governor Ueda says inflation nearing 2% as December rate hike stays firmly in play
- What are the main events for today?
- Gold price slides as yields surge, but SPDR holdings tell a different story
- FX option expiries for 6 October 10am New York cut
- BOJ may signal that inflation has hit 2% target, keeping December rate hike firmly in play
- Chart of the day: Treasury yields push to multi-decade highs despite fading Fed hike bets
- Crude Oil Forecast: WTI Tries to Build a Bottom Near $88, but Bulls Still Face $90-$91 Resistance
Markets:
- 10-year Treasury yields down 3.4 bps to 5.273%
- EUR leads, JPY lags
- Gold up 0.95% to $4178.54
- WTI crude down 2.67% to $87.09
- European stocks mostly higher; S&P 500 futures up 0.46%
- Bitcoin up 0.47% to $86,144
The risk sentiment has been positive this morning as we’ve seen the US dollar pulling back, stock markets rising and Treasury yields falling. The culprit might have been an easing in oil prices, with WTI oil currently down 2.56% on the day, although there was no catalyst for the move. The fact that there hasn’t been any direct confrontation between the US and Iran since the UN General Assembly has been supporting the risk sentiment.
We’ve also seen further narrowing in the OAT-Bund spread this morning after the widening peaked on Friday at the highest levels since the European debt crisis. Some of the improvement might have been triggered by position squaring given the overstretched levels, but the French government has also unveiled plans to sharply narrow the budget deficit by restraining spending and raising tax revenues. The bond market scare has forced policymakers to change course on policy, which could precede a major reversal.
This article was written by Giuseppe Dellamotta at investinglive.com.