Forex News

Oil: Private survey of inventory shows a headline crude oil drawS&P 500, Nasdaq Composite and Nasdaq 100 close at recordsCrude oil rebounds as Hormuz tensions rise. Can buyers take back full control?Fed Schmid: Labor force remains a in a good placeAlthough the broader indices are looking to close at record levels, the Magnificent 7 (sans Nvidia) lag behindUS treasury sells $58 billion of 3 year notes at a high yield of 4.932%Fed’s Daly: More tightening depends on whether AI, tariff and energy shocks persistBoJ’s Sato supports further rate hikes but avoids specifying timing. USDJPY remains confined.Bitcoin compresses the range and builds pressure for a runUS International Trade balance for August -105.6B vs -102.0B.Canada August trade balance $4.20 billion vs $1.55 billion expectedinvestingLive European news wrap: Risk sentiment improves as oil falls and bonds riseMorning Kickstart: Stocks eye records as oil and Treasury yields fallU.S. stocks added to their gains on Tuesday, with the S&P 500, Nasdaq Composite and Nasdaq 100 closing at record levels. The Dow also advanced, but the Russell 2000 moved lower. The large-cap buyers kept control. The smaller companies did not join the party.The economic focus was the wider-than-expected U.S. trade deficit, with the AI buildout helping swell imports. Meanwhile, Middle East tensions pushed crude oil around. An early decline gave way to a rebound, with prices trading near their session highs as the stock market closed.Treasury yields: A mixed finishTreasury yields were lower in late trading:2-year: 4.7975%, down 3.55 basis points.5-year: 5.0356%, down 3.04 basis points.10-year: 5.2815%, down 2.95 basis points.30-year: 5.6599%, down 0.41 basis points.The distinction matters. Shorter-term yields eased the most as traders take out the tightening. The odds of an October hike is now 19.4%, while there is a 70% chance the rate of a 25 basis point hike by the end of the year.  U.S. stocks: Records, but uneven participationThe closing levels were:Dow industrial average: 51,526.14, up 253.03 points or 0.49%.S&P 500: 7,818.92, up 44.96 points or 0.58%.Nasdaq Composite: 27,599.79, up 122.48 points or 0.45%.Russell 2000: 2,830.30, down 16.84 points or 0.59%.Nasdaq 100: 31,224.47, up 148.03 points or 0.48%.The S&P and Nasdaq records tell one story. The Russell’s decline tells another. The rally continued at the index level, but participation was uneven. That is something to keep an eye on as traders assess whether the next move higher brings more of the market along.U.S. trade deficit: The AI buildout lifts importsThe August trade deficit widened to $105.6 billion, worse than the $102.0 billion estimate and July’s revised $92.8 billion gap. Imports increased 4.3%, while exports rose 1.4%.As outlined in InvestingLive’s trade report, industrial supplies and capital goods helped drive the import increase, consistent with demand from the AI infrastructure buildout. investinglive.comA wider trade gap can weigh on measured GDP growth. However, imports of equipment also reflect investment: spending that may expand productive capacity even as it widens today’s deficit.Crude oil: An early decline turns into a late reboundMiddle East tensions kept oil traders on their toes. Crude reversed its earlier losses and was trading near the session highs as the stock market closed.WTI futures: $89.97, up $0.54 or 0.60%.Spot U.S. oil: $89.93, up $0.64 or 0.72%.The recovery is a reminder that supply-risk headlines can quickly change the tone. Oil’s earlier decline offered some relief on inflation. The rebound reduced that relief and kept the Middle East firmly on traders’ radar. See technical analysis post HERE for levels to eye in the new day. Gold and silver move higherBoth precious metals advanced in late trading:Spot gold: $4,163.40, up $23.12 or 0.56%.Silver: $61.3570, up $0.3150 or 0.52%.Gold gained despite the higher 10-year Treasury yield, which would normally be a headwind. Lower yields elsewhere on the curve offered some support, while geopolitical uncertainty remained a potential source of demand.Bitcoin sits out the stock-market advanceBitcoin was trading at $85,624, down $132 or 0.15%.The decline was modest, but Bitcoin did not follow the major stock indices higher. For this session, the record-setting equity rally did not translate into a comparable crypto advance (See post HERE. The price is compressing. Be on an alert for a break and run soon).What carries forward?The large-cap stock buyers remain in control, but the Russell’s weakness deserves attention. The AI investment story continues to show up in the trade data, while oil remains sensitive to Middle East headlines. Add a mixed Treasury market, and there is plenty for traders to watch as they wait for the next shove. This article was written by Greg Michalowski at investinglive.com.

There isn't much on the economic and event agends during the Aisa-Pacific timezone to shift marekts around too much upon release. Nnote that ECB board member Piero Cipollone will be speaking at an event in The Philippines, in a panel discussion at Reinventing Bretton Woods Committee International Research Fair. This article was written by Eamonn Sheridan at investinglive.com.

There is a little change in the market after the auction resultsThe first leg of the 3 coupon auctions this week including the 3 year, 10 year and 30 year is complete. SummaryWI level at the time of the auction: 4.934%High yield: 4.932%WI level at the time of the auction: 4.934%Stop-through: 0.2 basis points vs the average stop-through of 0.3 basis pointsBid to cover: 2.62X vs the average of 2.65XDirects: 31.7% vs the average of 21.5%Indirects: 57.6% vs the average of 65.9%Dealers: 10.7% vs the average of 12.6%Auction grade: C+A slightly above-average auction overall. The Treasury sold the notes 0.2 basis points below the WI yield, although that stop-through was slightly smaller than the average. Bid to cover was also just below average. The stronger result came from direct bidders, whose participation more than offset the softer indirect demand and left dealers taking a below-average share. Demand was sufficient to clear through the WI level, but the weaker indirect participation keeps the grade measured.Tomorrow, the US treasury will auction off 10 year notes and on Wednesday, they will auction off 30 year bonds.There is little movement in the markets after the near average auction results. This article was written by Greg Michalowski at investinglive.com.

Headlines:EUR/USD rebounds as French government takes steps to reduce deficit, narrowing OAT-Bund spreadEthereum 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 upsideConnecting the dots: How France’s budget problems are turning into the euro’s problemFrance 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 focusEuropean stock market open: Stocks extend rebound but France continues to lagMarket breadth divergence: What it tells traders about the stock marketiFX EXPO Asia 2026 Begins Tomorrow as the Global Trading Industry Gathers in Hong KongBOJ governor Ueda says inflation nearing 2% as December rate hike stays firmly in playWhat are the main events for today?Gold price slides as yields surge, but SPDR holdings tell a different storyFX option expiries for 6 October 10am New York cutBOJ may signal that inflation has hit 2% target, keeping December rate hike firmly in playChart of the day: Treasury yields push to multi-decade highs despite fading Fed hike betsCrude Oil Forecast: WTI Tries to Build a Bottom Near $88, but Bulls Still Face $90-$91 ResistanceMarkets:10-year Treasury yields down 3.4 bps to 5.273% EUR leads, JPY lagsGold up 0.95% to $4178.54WTI crude down 2.67% to $87.09European stocks mostly higher; S&P 500 futures up 0.46%Bitcoin up 0.47% to $86,144The 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.

Prior month -92.8 billionDetails from the BEA:Goods and services deficit: $105.6 billion. Prior $92.8 billion, revised. That is worse than expectations of -102.0BDeficit widened $12.7 billion, or 13.7%, from July.Exports: $315.2 billion, up $4.5 billion or 1.4%.Imports: $420.8 billion, up $17.2 billion or 4.3%.Goods deficit: $136.6 billion, widening $12.8 billion.Services surplus: $31.0 billion, little changed.Real goods deficit: $114.7 billion, widening 8.2%.Year-to-date deficit: Down 19.9% from the same period in 2025.The US trade deficit widened sharply in August as imports increased much faster than exports. The Census Bureau and Bureau of Economic Analysis reported a $105.6 billion goods and services deficit, compared with a revised $92.8 billion in July (Revised from -88.6B).The import increase was concentrated in industrial supplies and capital goods - think AI infrastructure. Industrial supplies imports rose $9.1 billion, including increases of $3.3 billion in crude oil and $3.1 billion in nonmonetary gold. Capital goods imports increased $6.2 billion, led by semiconductors and other industrial machinery.Exports also improved, helped by gold, crude oil (higher prices this is August data) and technology products. However, pharmaceutical exports fell $2.4 billion, limiting the overall gain. Despite August’s deterioration, the cumulative deficit remains narrower than a year ago.Quick analysis: Imports did the heavy lifting—and pushed the deficit in the wrong direction. The wider inflation-adjusted goods deficit points toward a larger drag from net exports on third-quarter gross domestic product (GDP), all else equal. However, gold requires special treatment: BEA replaces reported nonmonetary gold trade with a separate adjustment when calculating GDP, so the headline widening will not translate directly into the growth calculation. U.S. Bureau of Economic Analysis (BEA)Stronger capital goods imports could also signal investment demand. That makes this a mixed growth signal rather than a clear indication of economic weakness. The report alone is unlikely to shift the Federal Reserve’s policy outlook materially; a larger trade drag could weigh on the dollar and yields at the margin, but inflation and employment remain more direct policy drivers.Of course Pres. Trump abhors trade deficits but the US trades with other countries and that is not going away (especially if the US economy is growing).  The AI build is also are a big influence as chips are still imported from places like Taiwan and China remains an place for goods in the US.  Taiwan trade deficit a year ago was $12.2 billion, compared with $18.3 billion in August 2026—a widening of $6.1 billion, or 50%. Interesting is Canada where the deficit widened $4.1 billion to $7.1 billion. Imports increased $4.6 billion to $37.1 billion, while exports rose $0.5 billion to $29.9 billion.US August goods trade balances by countryThe largest goods deficits were with Mexico, Vietnam, Taiwan and China. These figures cover goods only, on a Census basis.Trade deficits:Mexico: $27.7 billionVietnam: $24.0 billionTaiwan: $18.3 billionChina: $16.4 billionEuropean Union: $11.0 billionSouth Korea: $9.4 billionCanada: $7.1 billionIndia: $6.2 billionGermany: $6.2 billionMalaysia: $6.0 billionItaly: $4.3 billionJapan: $3.7 billionIreland: $2.5 billionFrance: $1.4 billionIsrael: $0.8 billionSwitzerland: $0.4 billionSingapore: $0.3 billionTrade surpluses:Netherlands: $7.7 billionSouth and Central America: $5.6 billionUnited Kingdom: $3.6 billionHong Kong: $2.3 billionBrazil: $1.3 billionBelgium: $1.2 billionAustralia: $0.6 billionSaudi Arabia: $0.4 billionNotable changes from July:Canada: The deficit widened $4.1 billion to $7.1 billion. Imports increased $4.6 billion to $37.1 billion, while exports rose $0.5 billion to $29.9 billion.Singapore: The balance shifted from a $1.9 billion surplus to a $0.3 billion deficit. Exports fell $1.1 billion, while imports increased $1.2 billion.Ireland: The deficit narrowed $1.5 billion to $2.5 billion, largely reflecting a $1.4 billion decline in imports.The regional totals overlap with individual countries—for example, Germany is included in the European Union—so these figures should not be added together.As a baseline, the odds of a Fed tightening remain plus or -20% (currently 21.6%). Yields remain lower with the two-year down -4.18 basis points at 4.791%. The 10 year yield is down -3.6 basis points at 5.277%. The Fed targets 3.75% – 4.0%. What this report measures: The monthly trade report measures US exports and imports of goods and services. A deficit means imports exceed exports. Traders monitor the seasonally adjusted figures because changes in inflation-adjusted net exports affect GDP growth; the headline dollar figures also reflect price changes and are subject to revision. This article was written by Greg Michalowski at investinglive.com.

Prior was +0.77 billion (revised to 0.79 billion)Exports: +2.5% MoM. Prior -2.6%Imports: -2.0% MoM. Prior +8.3%Canada's merchandise trade surplus widened sharply to C$4.2 billion in August, from C$787 million in July, as exports increased while imports declined. The result marked Canada's sixth consecutive monthly trade surplus, with merchandise exports rising 2.5% and imports falling 2.0%.Exports increased across eight of 11 product categories, with energy exports rising 4.7%, their first increase since April. Exports of industrial machinery, equipment and parts jumped 10.1%, while electronic and electrical equipment exports increased 11.0%. Consumer goods exports also rose 6.6%. In real, or volume, terms, total exports increased 2.5%.Imports fell for the first time in seven months, led by an 8.8% decline in motor vehicles and parts. Imports of metal and non-metallic mineral products also dropped 7.0%. Meanwhile, Canada's trade relationship with the United States strengthened notably: exports to the US rose 8.1%, while imports fell 2.5%, widening Canada's US trade surplus to C$11.2 billion, the largest positive monthly change ever recorded in that bilateral trade balance.The sharp increase in exports to the United States is particularly notable given the new US tariffs announced in July and implemented toward the end of August. Statistics Canada notes that the tariff announcements may have encouraged businesses to accelerate shipments ahead of the new costs, meaning some of the strength in August exports could reflect trade-timing effects rather than a purely underlying improvement in demand.The Canadian dollar's appreciation also affected the data: the currency rose 1.1 US cents on average against the US dollar in August. Measured in US dollars, Canadian exports actually increased 4.0%, while imports fell 0.6%. For background, Canada's merchandise trade balance measures the difference between the value of goods exported and imported. A trade surplus means exports exceed imports, while a deficit means imports are larger. Traders monitor the report because trade flows affect economic growth, the Canadian dollar and the country's external position. The August figures also provide an important early indication of how new US tariffs may be changing Canada's trade patterns. This article was written by Giuseppe Dellamotta at investinglive.com.

France's bond market recently sent a strong message to policymakers. The spread between French and German 10-year government bonds surged above 150 basis points last week, reaching its widest level since the euro-area debt crisis. French borrowing costs approached 5%, while concerns over the country's deficit, debt trajectory and political fragmentation intensified ahead of the 2027 presidential election.The market reaction is important because it can create a feedback loop. Higher bond yields increase the government's interest bill, which worsens the fiscal outlook, requiring even more borrowing and potentially pushing investors to demand an even larger risk premium. But there is also a good side as the bond market can force policymakers to change cours.Chart: OAT-Bund spread Governments ultimately need investors to finance their deficits. As long as investors are comfortable buying government debt, policymakers have considerable room to pursue their preferred fiscal policies. But that changes when borrowing costs rise sharply.If investors are willing to finance France at 3%, a large deficit may be politically manageable. If the market suddenly demands 5%, the cost of servicing that debt becomes much more significant. France's interest bill is already projected to rise sharply, reaching around €91 billion in 2027 under the government's current budget assumptions.At that point, bond market pricing starts feeding directly back into fiscal policy. Fiscal concerns lead to a rise in bond yields and interest costs, and eventually to a deterioration in fiscal outlook and political pressure to consolidate. The market pricing itself can become one of the forces determining future government policy.The Liz Truss exampleThe clearest example is the United Kingdom in 2022. The government of Liz Truss announced a large package of tax cuts without corresponding spending reductions. Investors immediately questioned the credibility of the fiscal plan. UK government bond yields surged dramatically, with the 30-year gilt yield rising around 120 basis points between September 22 and September 27 alone, far more than comparable moves in US and German bonds.The selloff eventually became a financial stability problem because leveraged liability-driven investment funds were struggling with the rapid repricing of gilts. The Bank of England intervened to restore market functioning. The political response followed soon after.The government progressively abandoned the original fiscal programme, with most of the remaining tax cuts eventually scrapped. The combination of fiscal U-turns and the stabilisation of the gilt market reversed much of the extreme move in yields. Markets can place limits on fiscal policy that governments discover only after testing them.France is different, but the mechanism is similarFrance's episode is different but the final result might be similar. France's problem has accumulated over time. Public debt has reached roughly 119% of GDP, while the government expects a deficit of 5.4% of GDP in 2026. Its 2027 budget proposes €43 billion of new measures, taking the total fiscal effort affecting next year's accounts to around €54 billion, with a target of reducing the deficit to 5% of GDP.Even that effort would not stabilise the debt ratio. The government's own projections see public debt rising to around 121.7% of GDP in 2027. This is where the bond market becomes important. The French government needs to convince investors that the debt trajectory can eventually be stabilised, while simultaneously convincing parliament that the required fiscal consolidation is politically acceptable. Those two objectives are difficult to reconcile.The recent surge in OAT yields therefore increases the pressure on politicians to find a compromise. The government has already emphasised the need for significant savings, while opposition parties are being forced to consider the market consequences of preventing the budget from passing.And there are signs that the bond-market crisis is affecting the political debate more broadly. Marine Le Pen is now preparing a plan centred on €25 billion of annual spending reductions, explicitly seeking to demonstrate fiscal credibility as French borrowing costs surge. That is an important development because it shows how market pricing can begin to change the political incentives of the actors who will ultimately determine fiscal policy.The bond market doesn't need a full U-turnMarkets do not necessarily need France to announce a dramatic fiscal reversal like the UK did in 2022. They may simply need evidence that policymakers have understood the constraint and are taking credible measures to fix the problem. The market might just need a compromise on the 2027 budget, spending reductions and political agreement that makes the budget process more predictable. The market could then conclude that the probability of a much worse fiscal outcome has fallen and that alone could cause the risk premium to decline, leading to a tightening in OAT-Bund spread and improving risk sentiment. Something similar happened with Trump's Liberation Day in April 2025. The sharp increase in Treasury yields forced Trump to pause and ease his aggressive reciprocal tariffs. He did confirm later that the he didn't like the reaction in the bond market. The markets eventually rebounded strongly just because of a less agressive stance that improved future expectations. In extreme cases, the markets can force policymakers to change course.Potential tradesThe recent "mini-crisis" in the OAT-Bund spread might have reached a peak as policymakers started to take the problem very seriously. We've been seeing some steady tightening in the spread since Friday, which could be an early signal of a reversal. The euro and the CAC40 have been tightly correlated with the OAT-Bund spread since early September. The catalyst might have been the break of the 2024 high, which eventually led to a quick surge.Chart: OAT-Bund spread (candles) vs EUR/USD (blue line - inverted) and CAC40 (purple line - inverted)This morning French policymakers have doubled down on their committment to fix the problem and we've been seeing an acceleration in the spread tightening. This is leading to a rally in the euro and the CAC40. We could be in the early innings of a recovery... This article was written by Giuseppe Dellamotta at investinglive.com.

With all that is happening in markets, there are plenty of charts worth watching in Europe right now. However, this in particular may be one of the most important.The gap between French and German 10-year bond yields has surged over the past month, as investors are demanding a much bigger premium for holding French government debt over German bunds. The move looks even more striking when you zoom out on the charts.The yield spread has decisively broken above the roughly 80 bps area that had capped it over the past couple of years. And even after pulling back from above 150 bps last week, it is still sitting around 135 bps currently. For some context, those are levels last associated with the euro area sovereign debt crisis around 2012.That alone tells us how dramatically markets have repriced French fiscal risk in recent weeks.Investors remain extremely uneasy over France's fiscal trajectory. The government's proposed 2027 budget, which includes around €43 billion in savings, still has to go through a deeply divided parliament ahead of next year's presidential election.Now, if the French-German yield spread stays elevated but other euro area spreads remain relatively contained, then this is very much a story that revolves around French fiscal repricing.But if those other spreads start widening alongside it, then the conversation starts shifting from French fiscal risk towards broader euro area stress.That is not to say that we haven't seen some hints of that pressure already. The euro had fallen to a 17-month low against the dollar yesterday, with traders starting to question if France's problems could spill over into the wider region.Besides that, other European bond markets are also under strain and keeping on edge in the meantime. The spread between Italian and German 10-year bond yields has also widened to nearly 125 bps last week, before narrowing to around 110 bps now. That is still considerably higher from around 80 bps at the start of September, with the current spread being the widest in nearly 18 months.With that in mind, I would argue that perhaps the market focus should not be too much on whether the French-German yield spread is 130, 140 or 150 bps on any particular day. Instead, the focus should really be more about the breadth of the move.To put things more simply, France selling off on its own is largely a French fiscal problem. But France selling off while risk premiums rise across Europe, then that really starts becoming more of a euro area problem. This article was written by Justin Low at investinglive.com.

EUROPEAN SESSIONIn the European session, we don't have much on the agenda other than a couple of low tier releases like the Swiss unemployment rate and the Eurozone retail sales. None of the data won't change anything for the respective central banks, so the market reaction will likely be muted. AMERICAN SESSIONIn the American session, the calendar is going to be light as well, with just the weekly US ADP data and the US trade balance on the agenda. These are not market moving releases and they won't change anything for the Fed anyway. The market focus will likely remain on US-Iran developments and the bond market volatility. The recent de-escalation and ongoing negotiations have put a lid on oil prices, although there have been also reports of a rebound in oil exports to 92% of pre-war levels due to ships being escorted with US military assistance and bypasses using pipelines. Nevertheless, a re-escalation could increase the risk premium again and send oil prices higher, so traders will need to keep an eye on that.CENTRAL BANK SPEAKERS08:30 GMT/04:30 ET - BoE's Mann (hawkish - voter)11:45 GMT/07:45 ET - ECB's Zigman (neutral - voter)13:00 GMT/09:00 ET - ECB's Cipollone (neutral - voter)13:05 GMT/09:05 ET - Fed's Williams (neutral - voter)14:45 GMT/10:45 ET - Fed's Bowman (dovish - voter)17:15 GMT/13:15 ET - Fed's Schmid (hawkish - non voter) This article was written by Giuseppe Dellamotta at investinglive.com.

Solana launches open settlement standard for institutions, with JPMorgan inputICYMI: Citi raises bitcoin target to $113,000 and ether to $3,028 as crypto inflows returnReports that Hormuz crude flows near 76% of prewar levels. Diesel shortage persists.Trump's red diesel order unlikely to cut most pump prices, says GasBuddy's De HaanS&P 500 defies midterm slump as Bank of America says history favours post-election gainsMorgan Stanley turns neutral on dollar with bullish skew, stays bearish on yenChalmers warns rising global bond yields will pressure Australia's federal budgetNvidia nears $6 trillion as bonds flash warnings: Deutsche Bank says the gap cannot lastTrump signs order opening tax-free red-dyed diesel to all buyers as fuel costs biteAustralian consumer sentiment slumps after RBA hike as Westpac tips another in NovemberAI chips explained: why Nvidia, Broadcom and Intel react so differently to the same newsNvidia hits record high near $6 trillion, yet still trails the chip sector's 2026 rallyA year after its $126,000 peak, bitcoin trades like a rates bet, not an inflation hedgeAramco CEO warns rebuilding thin global oil inventories could take two years after HormuzWhy a few words from Elon Musk can (and did!) move a $600 billion+ chipmakerNew York Fed reviews major banks' private credit exposure after JPMorgan loan markdownsCase for central banks to keep buying gold remains strong, ECB/Bundesbank Nagel saysNZ business confidence jumps to a net 40% in September quarter despite oil price headwindsDeutsche Bank warns bonds and equities are pricing different worlds as euro spreads wideninvestingLive Americas FX news wrap 5 Oct: Nasdaq close at record as the dollar firms/yields higherThe Nasdaq composite and NASDAQ 100 leads US stocks higherBoJ's Ueda in focus as markets weigh a back-to-back October rate hikeSummary:Aramco's CEO says rebuilding global oil inventories could take two years after Hormuz reopens, with less than 10% of stocks practically available.Hormuz crude flows are back to about 76% of prewar levels, but refined products are only about 11% of cargoes, keeping diesel scarce (WSJ, Kpler).Trump signed an order allowing red-dyed diesel on roads tax-free, but GasBuddy's De Haan says most drivers will see little benefit.Deutsche Bank warns bonds and equities are pricing different worlds, and Chalmers says rising yields will pressure Australia's budget.Nvidia hit record highs near $6 trillion on Monday, while Intel fell after Musk confirmed TSMC talks on Terafab. Equites here in the timezone took thier lead from a strogner Wall Street. The New York Fed has been reviewing major banks' private credit exposure, Semafor reports.Australian consumer sentiment fell 4.7% to 80.4 after the RBA hike, while New Zealand business confidence jumped.Energy supply and rising borrowing costs dominated the news flow on Tuesday, as warnings over thin oil inventories and multi-decade-high bond yields contrasted with record highs in US technology stocks.Saudi Aramco chief executive Amin Nasser warned that rebuilding global oil inventories could take up to two years even after the Strait of Hormuz fully reopens, describing stockpiles as dangerously thin and estimating that less than 10% of world inventories are practically available. Kpler data cited by the Wall Street Journal showed crude flows through Hormuz recovering to about 76% of prewar levels, but refined products made up only about 11% of cargoes, as damaged Gulf refineries keep diesel in short supply. In the US, President Donald Trump signed an order allowing tax-exempt red-dyed diesel on public roads, though GasBuddy's Patrick De Haan said state laws, a possibly deferred tax and the lack of new supply mean most drivers will see little benefit. Oil prices barely moved. Bond markets remained under pressure. Deutsche Bank warned that bonds and equities are pricing very different outcomes, with US 10-year yields recently at their highest since 2007 and the French-German spread posting its largest weekly rise since 1990, while equities sit near records with little sign of stress. The bank said either the stress eases quickly or risk assets must reprice for weaker growth. Australian Treasurer Jim Chalmers said rising global yields will push up the cost of refinancing government debt and put upward pressure on the federal budget, which he will update before year-end. Majopt FX traded quietly. Equity strength on Omday US time was led by Nvidia, which hit fresh record highs and moved within reach of a $6 trillion market value, helped by a $150 billion buyback expansion and a Morgan Stanley upgrade. Intel shares fell after Elon Musk confirmed TSMC is in talks to join Terafab, the Texas chip project where Intel had been the only named manufacturing partner. Equites here took some lead from the rise on Wall Street but were ultimately mixed: Nikkei eked out a 0.3% gain; South Korea softened 0.8%; Hong Kong's Hang Seng rose 0.8%. In financial regulation, the New York Fed has been reviewing major banks' exposure to private credit firms, examining JPMorgan, Wells Fargo, Barclays and Morgan Stanley on risk management and collateral quality, Semafor reported.Regional data pointed to pressure on households. Australia's Westpac-Melbourne Institute consumer sentiment index fell 4.7% to 80.4 in October, with responses collected after the RBA's latest rate hike dropping to levels last seen in the early 1990s recession. Westpac still expects another RBA hike in November. In New Zealand, the NZIER business survey showed a net 40% of firms expecting better conditions, up from 14%, though firms' own trading activity remained flat.In central banks and currencies, Bank of Japan Governor Kazuo Ueda's speech at the National Securities Convention is in focus for signals on an October rate hike, after Deputy Governor Shinichi Uchida described artificial intelligence as a positive demand shock adding to price pressures. Ueda's speech is coming up at 2.35pm Tokyo time / 0635 GMT / 0235 US Eastern time. This article was written by Eamonn Sheridan at investinglive.com.

The Treasurer's warning puts fiscal pressure alongside monetary tightening as a theme for Australian markets, with higher interest costs likely to constrain spending in the mid-year update. A rising debt servicing bill could add to supply concerns for Australian government bonds if deficits widen, keeping upward pressure on longer-dated yields. With the RBA in a hiking cycle and global yields at multi-decade highs, the Australian yield curve faces pressure from both ends. Oil-driven inflation remains a key risk, as further energy price gains would push global yields higher and deepen the refinancing problem Chalmers described.---Yesterday:Australia's Chalmers calls Iran war an economic disaster, says rising yields will cost billionsEarlier:Australian consumer sentiment slumps after RBA hike as Westpac tips another in November--- The bond market's global sell-off has reached Canberra, with Chalmers warning that yesterday's cheap debt is about to become tomorrow's expensive budget problem.Summary:Treasurer Jim Chalmers warned that rising global bond yields will put upward pressure on Australia's federal budget.He said low-cost government debt maturing will be replaced with higher-cost borrowing.Chalmers will update the national budget before the end of the year to reflect higher borrowing costs.He said the private sector is leading growth and described Australia's economic story as positive, despite a long-standing productivity challenge.He also cited strong interest from Japan.Australian Treasurer Jim Chalmers has warned that the surge in global bond yields will put upward pressure on the federal budget, as cheap government debt maturing in coming years is replaced with more expensive borrowing.Speaking on Tuesday, Chalmers said higher borrowing costs would show up in budgets around the world, including Australia's. He identified refinancing as a major source of pressure, explaining that some of the government's low-cost debt will be rolled over at significantly higher interest rates as it matures. He said he would update the national budget before the end of the year to reflect the impact of elevated borrowing costs.Refinancing risk builds gradually rather than all at once. Governments continually roll over maturing bonds, so a sustained rise in yields lifts interest costs year by year as older, cheaper debt is replaced, adding to pressure on future budgets.The warning comes amid a broad global bond sell-off. US 10-year Treasury yields reached their highest level since 2007 last week, while European sovereign spreads have widened sharply, with the French-German gap at its widest since 2012. Higher global yields tend to flow through to Australian government bonds, raising the cost of new issuance for the Commonwealth.Domestic monetary policy is adding to the pressure. The Reserve Bank of Australia recently raised its cash rate to 4.6%, the highest since 2011, and some economists expect a further increase in November.Chalmers sought to balance the warning with a more upbeat assessment of the economy. He said the private sector was now leading growth and described Australia's economic story as a positive one, while acknowledging the country's long-standing productivity challenge. He also pointed to what he called an immense and welcome level of interest from Japan.The comments suggest higher debt servicing costs will be a central theme of the mid-year budget update, potentially limiting the government's room for new spending or tax relief as cost-of-living pressures weigh on households. This article was written by Eamonn Sheridan at investinglive.com.

Westpac's call for a November follow-up hike, despite the sentiment slump, signals that inflation risk still outweighs demand weakness for the RBA. That keeps support under Australian short-end yields and should limit downside for the Australian dollar on soft domestic data. Fuel is the key transmission channel, so further gains in crude prices would sharpen both the inflation pressure and the squeeze on consumers. The risk for markets is that a rate-hiking central bank meets a household sector already at recession-level gloom, raising the odds of a sharper slowdown in consumer spending into 2027.---Australian households took one look at the RBA's latest hike and sent sentiment to recession-era lows, yet Westpac reckons the central bank isn't finished.Summary:The Westpac-Melbourne Institute Consumer Sentiment Index fell 4.7% to 80.4 in October from 84.4.Sentiment dropped to 67.2 among those surveyed after the RBA hike, a level previously seen only in the early 1990s recession.The cash rate is at 4.6%, the highest since 2011, and petrol is back above $2.30 a litre.Just over 80% of post-decision respondents expect mortgage rates to rise further over the next year.Westpac still expects the RBA to hike again at its November 2–3 meeting, citing fuel costs flowing into broader prices and AI-driven demand pressures.Australian consumer sentiment slumped in October after the Reserve Bank of Australia's latest rate hike, with the Westpac-Melbourne Institute Consumer Sentiment Index falling 4.7% to 80.4 from 84.4 in September.The reading ranks among the 40 weakest since the monthly survey began in the early 1970s. Westpac said this year has already produced two other readings in that group, in April and June, marking the worst stretch of persistently weak sentiment since the early 1990s recession. Pessimists outnumbered optimists in 102 of the 106 population groups the survey tracks.The RBA decision appears to have had an immediate effect. Among respondents surveyed before the announcement, sentiment was 86.9, slightly up on September. Among those surveyed afterwards, it plunged to 67.2, a level previously seen in complete surveys only during the depths of the early 1990s recession. The gap of nearly 20% between the two groups is the largest since Westpac began tracking daily responses in 2019.The macro backdrop explains the pressure. The latest hike took the cash rate to 4.6%, its highest since 2011, and Westpac expects the standard variable mortgage rate to rise above 9% for the first time since 2008. At the same time, national average petrol prices have climbed back above $2.30 a litre, close to April's peak and up almost 25% since the start of the year, as the energy shock from the Middle East conflict continues to hit household budgets.Consumers expect more of the same. The survey's mortgage rate expectations index rose 5.5% to just below its May peak, and among those surveyed after the RBA decision, just over 80% expect mortgage rates to rise further over the next year, up from 63% in September. Concerns about jobs are also creeping higher, with the unemployment expectations index now clearly above its long-run average, though still well short of past peaks. Westpac described consumers as on edge rather than alarmed.Westpac said consumers' worries still centre mainly on the cost of living and interest rates rather than the job losses and insolvencies typical of a recession.Despite the sentiment hit, Westpac expects the RBA to raise rates again at its next meeting on November 2 and 3. It said higher fuel costs are starting to feed into prices across a wider range of goods and services, a sign that upside inflation risks flagged by the central bank are materialising, while the board is also wary of demand pressures from the AI and data centre investment boom. This article was written by Eamonn Sheridan at investinglive.com.

Firms widely expect interest rates to rise over the coming year, and signs that spare capacity is shrinking would support that view. Easing cost and pricing gauges, however, give the Reserve Bank of New Zealand some room on the inflation side. Oil is the main swing factor: the renewed US-Iran conflict has lifted fuel prices again, and further gains would test NZIER's view that the energy shock is not yet spreading into broader inflation. For the New Zealand dollar, the survey offers modest support through firmer growth and rate expectations, though the gap between optimism and actual activity tempers the signal.--- New Zealand firms have rarely felt this good about an economy they are not yet seeing in their own order books, with oil the wildcard that could close the gap the wrong way.Summary:A net 40% of firms expect better general economic conditions, up from a net 14% in the June quarter.Own domestic trading was flat to slightly weaker, with a net 1% reporting a decline.Confidence rose in every sector, led by retail at a net 57% and building at a net 46%.Investment intentions turned higher, and many firms plan to hire despite a net 5% cutting staff in the quarter.Firms reporting higher costs fell to a net 47% from a net 54%, and fewer firms raised prices.NZIER says higher oil prices from the US-Iran conflict remain a headwind, and firms widely expect interest rates to rise.New Zealand business confidence climbed sharply in the September quarter, according to the latest NZIER Quarterly Survey of Business Opinion, although firms' own trading activity has yet to catch up with their brighter view of the economy.A net 40% of firms expect general economic conditions to improve over the coming months on a seasonally adjusted basis, up from a net 14% in the June quarter. Actual activity was flat to slightly weaker, with a net 1% of firms reporting a decline in their own domestic trading over the quarter.The rise in optimism came despite renewed conflict between the United States and Iran, which has pushed global oil prices higher again. NZIER said the hit to sentiment from Middle East developments appears muted for now, but uncertainty over geopolitics and global oil supply remains a headwind for New Zealand's recovery over the coming year.Confidence improved across every sector surveyed. Retailers were the most upbeat, with a net 57% expecting better conditions, even though new orders and sales fell during the quarter and profitability deteriorated as weak demand stopped them passing on higher costs. The building sector swung from pessimism earlier in the year to a net 46% expecting improvement, backed by higher new orders and output, though architects' workloads point to a flat housing pipeline and shrinking commercial and government work. Manufacturers reported stronger domestic and export demand, while the services sector was positive on the outlook despite lower volumes.Investment intentions have turned higher, with firms planning to spend on buildings, plant and machinery after caution earlier in the year. A net 5% of firms cut staff in the quarter, but a sizeable share plan to hire in the next three months. Lack of demand remained the main constraint, yet firms found it harder to recruit skilled workers, which NZIER said suggests spare capacity is starting to erode.Cost and pricing gauges eased from elevated levels. The share of firms reporting higher costs fell to a net 47% from a net 54%, cost expectations declined and fewer firms raised prices, which NZIER said reduces the risk of higher fuel prices feeding into broader inflation. Firms widely expect interest rates to rise over the coming year, and NZIER expects higher mortgage repayments to restrain household discretionary spending as loans reprice. This article was written by Eamonn Sheridan at investinglive.com.

The Nasdaq composite and NASDAQ 100 leads US stocks higherBoJ's Ueda in focus as markets weigh a back-to-back October rate hikeCrude oil technicals: Middle east tension has crude oil futures moving higher.What next technically?You Have to BELIEVE in something: Why I trust the 100 and 200 moving averagesISM non- manufacturing PMI 54.9 versus 55.2 estimateS&P global composite PMI for September 58.4 versus 58.4 preliminaryBitcoin rally stalls below $87,334. What must buyers and sellers do next?Why a weak jobs report does not always mean a weak economyMorning Kickstart: Dollar firms, stock futures slip ahead of ISM servicesinvestingLive European session wrap: Dollar firms as yields stay elevated, French risks weigh on euroThe Nasdaq Composite and Nasdaq 100 closed at record levels to start the new trading week. Stocks found room to move higher even as longer-term Treasury yields rose and the dollar gained against most of the major currencies. Crude oil, meanwhile, finished lower after another headline-driven session.The economic backdrop remains a balancing act. Friday’s softer jobs report eased concerns about an immediate Fed rate hike, but today’s ISM services report showed that demand continues to expand and price pressures remain elevated. For stocks, the attraction is continued growth with less urgency for another rate increase. The risk is that stubborn inflation and higher borrowing costs eventually spoil that combination.Dollar higher against all but the AUDThe dollar was higher against six of the seven major currencies in the late-session snapshot. Its largest gain was against the New Zealand dollar, while the Australian dollar was the lone exception:EURUSD: 1.1217, down 0.32%.USDJPY: 157.98, up 0.10%.GBPUSD: 1.3219, down 0.17%.USDCHF: 0.8304, up 0.22%.USDCAD: 1.4261, up 0.10%.AUDUSD: 0.6968, up 0.22%.NZDUSD: 0.5598, down 0.37%.The euro also faced its own headwinds. France’s fiscal outlook and political uncertainty ahead of next year’s presidential election continued to weigh on confidence. InvestingLive’s European coverage highlighted the widening French borrowing-cost premium over Germany. That adds another layer of pressure on the euro beyond the U.S. rate story.Treasury curve steepensThe late-session Treasury snapshot showed a split between the short and long ends of the curve:2-year yield: 4.8143%, down 1.07 basis points.5-year yield: 5.0589%, up 0.39 basis points.10-year yield: 5.3110%, up 3.40 basis points.30-year yield: 5.6645%, up 3.45 basis points.The message? Less concern about an immediate Fed hike is helping the short end, but longer-term borrowing costs are still moving higher. Stocks absorbed that move today. Nevertheless, a 10-year yield above 5.30% remains a hurdle for valuations and financing costs.Nasdaq indices close at recordsAll five major U.S. indices finished higher, with the Nasdaq Composite leading the gains:Dow industrial average: 51,273.12, up 91.01 points or 0.18%.S&P 500: 7,773.96, up 51.25 points or 0.66%.Nasdaq Composite: 27,477.31, up 286.45 points or 1.05% — a record close.Russell 2000: 2,847.1356, up 14.2409 points or 0.50%.Nasdaq 100: 31,076.44, up 268.51 points or 0.87% — a record close.The stronger Nasdaq performance was consistent with continued interest in technology and AI investment. However, there is still a reason to watch what is happening beneath the surface. InvestingLive’s credit-spread coverage highlighted widening spreads even as stocks benefited from reduced Fed hike expectations. If lenders are demanding more compensation for credit risk, that is a development equity traders should keep on their radar.France lags in EuropeThe major European markets mostly finished higher, with France the clear exception:Germany’s DAX: 25,254.22, up 23.01 points or 0.09%.France’s CAC 40: 7,834.11, down 63.09 points or 0.80%.U.K.’s FTSE 100: 10,497.95, up 36.01 points or 0.34%.Spain’s IBEX 35: 19,299.69, up 214.38 points or 1.12%.Italy’s FTSE MIB: 50,818.39, up 335.17 points or 0.66%.The divergence matters. France’s decline points to country-specific fiscal and political concerns rather than a broad retreat across European equities.ISM services: Growth eases, prices accelerateThe September ISM Services PMI came in at 54.9 versus 55.2 expected and 55.4 last month. It was a modest miss, but the index remained above 50 for the 27th consecutive month.The details were mixed:Business activity fell to 56.5 from 61.7.New orders eased to 59.8 from 60.9, still signaling solid demand.Employment improved to 50.1 from 47.8, returning to slight expansion.Prices rose to 74.0 from 72.6, the highest since July 2022.Backlogs increased to 56.6 from 55.6.New export orders fell into contraction at 46.9 from 56.3.For traders, a slightly softer headline does not automatically mean a softer inflation outlook. Companies still have orders to fill, employment stabilized, and costs accelerated. That gives the Fed a reason to remain cautious about declaring the inflation battle won. The supplied market commentary indicated little immediate reaction to the release.Oil reverses its rally and settles lowerCrude oil finished lower after conflicting reports about Saudi energy infrastructure:November WTI settled at $89.43, down $1.68, or approximately 1.84%.December Brent settled at $100.32, down $1.93, or approximately 1.89%.An initial AFP report that pumping through Saudi Arabia’s East-West pipeline had halted following an attack helped lift prices. Those gains were pared back after Bloomberg sources said the pipeline was flowing normally.The broader supply picture also offered some relief. InvestingLive’s oil coverage pointed to recovering Gulf exports and a G7 reserve release as offsets to the ongoing threat of attacks on energy infrastructure.Lower oil offers some help on inflation, but today’s Treasury move shows it was not enough to bring longer-term yields down. Middle East headlines remain capable of providing the next shove.What carries into the next session?Stock buyers kept control today, with both Nasdaq indices closing at records. The next test is whether that strength can continue while the 10-year yield holds above 5.30%. Keep an eye on the dollar’s broad gains, France’s borrowing-cost pressures and the next Middle East headline. Wednesday’s Fed minutes will provide another look at how officials balance softer employment data against persistent inflation. This article was written by Greg Michalowski at investinglive.com.

China remains on holiday. Mainland markets reopen on 8 October. During the Tokyo afternoon today we'll hear from Bank of Japan Governor Ueda. I'll get a preview of this posted separately.  This article was written by Eamonn Sheridan at investinglive.com.