Market Overview

The Dollar weakened modestly since late Thursday, then recovered against the Euro, Sterling and Canadian Dollar during the European morning, with ranges still tight. Oil and Treasury yields, the two markets that had been supplying fresh momentum, both ran into resistance.

Bitcoin and Ether fell sharply after months of fading momentum collided with a surge in oil prices and Treasury yields near 5.35%—triggering $484.9m in single-day ETF redemptions and nearly $974m in liquidations, with Bitcoin's next key support at 75,026–76,040 and Ether already testing its 55-day EMA near 2,480.

Global risk sentiment weakened on Thursday as Brent briefly pushed above $105 on renewed reports of possible US military action against Iran, while the US 10-year Treasury yield returned to around 5.35%, close to levels last seen in 2002. US equity futures fell and Asian stocks were broadly lower. The Dollar was broadly the strongest major, with the Yen and Swiss Franc relatively resilient.

Gold fell to 4,066.21 before recovering toward 4,120, and while the near-term bias stays bearish below 4,227.85–4,245.68, fading downside momentum, a stalling 10-year yield near 5.3%, and a rising Gold/Silver ratio suggest a break below 4,000 may struggle to extend much past the 3,937–3,942 support cluster.

The US 10-year Treasury yield hit a 24-year high of 5.35% before a strong $39bn auction cleared at 5.30% and pulled heavy demand—evidence that buyers exist near current levels, even as the September FOMC minutes cited AI-related borrowing as a new contributor to rising yields and the technical chart points to a 5.41–5.42% resistance zone as the next real test.

The Dollar is leading the majors into the FOMC minutes, with DXY at 102.401, up 0.55% at the time of writing, and the Dollar stronger against all seven major peers. Oil is holding above $100, long-end bond yields are climbing across major markets, and renewed stress in French government debt has pushed the Euro to the bottom of the currency table.

Euro flipped from the strongest to the weakest major currency in a single session as French bond relief proved short-lived—the OAT-Bund spread widened back toward 137bp—and EUR/CAD has now broken decisively below 1.6000, with 1.5887 the next key test.

Deutsche Bank sees Silver's physical deficit narrowing toward a possible 2027 surplus as solar demand intensity falls and vault inventories rebuild, but with Silver trading around 60.80, the next move still hinges on the near-term technical fight between 58.68 support and 62.30 resistance—and on Wednesday's FOMC minutes.

Brent crude fell below $98 on Tuesday on improving Middle East supply availability, the planned G7 release of emergency stocks and Saudi Arabia’s unexpectedly aggressive cut to November crude prices for Asian buyers. Lower oil eased inflation-risk pressure, sovereign yields moved lower and the Dollar’s advance paused. EUR/USD rebounded to around 1.127 and the French-German 10-year spread narrowed back toward 130bp.

USD/CAD has rallied from 1.3730 to 1.4292, stalling right at the 61.8% retracement (1.4290) of the 1.4791–1.3480 decline, with Wednesday's FOMC minutes and Friday's Canadian jobs report now standing directly in front of the next directional break.

Neither interest-rate differentials nor a generalized Eurozone panic explain the move; it is French-specific risk with broader Euro implications. A decisive loss of 1.1185 would strengthen the case that the decline from 1.2081 is developing into an impulsive medium-term downtrend, with the current leg from 1.1710 potentially entering its strongest phase.

The Nikkei 225 is closing in on a fresh record near 72,831.73, but unlike June's rally—when USD/JPY ran alongside it to 163.97—a faster BoJ tightening cadence, a more patient Fed, credible intervention risk and the absence of a fresh oil shock mean USD/JPY is unlikely to follow through the 160 zone this time.

October Fed hike odds collapsed to just 17.7%, but Gold barely rallied because markets still price an 82.7% probability of at least one more hike by December and a rate plateau near 4.7% by late 2027—nearly 60bp above the Fed's own September median—making Wednesday's FOMC minutes, not the October skip, the real test for gold.

September's soft NFP report pushed the probability of an October Fed pause to 77.9%, but Treasury yields and Dollar Index both reversed higher by Friday's close as markets judged the data wasn't enough to resolve the bigger inflation risk—a risk Brent crude's hold above $100, despite a coordinated G7 reserve release, helped confirm is still live. Together, that shows markets are repricing when the Fed moves next, not whether further tightening is still on the table.

September’s US employment report was almost the cleanest dovish combination markets could have received. Payrolls rose just 29K against a 90K consensus, unemployment edged up to 4.2%, wages undershot and prior months were revised lower again. Treasury yields fell, October Fed hike expectations collapsed into the low teens and the Dollar Index was knocked back below 102.

Dollar Index is heading towards the 102.77–103.00 resistance zone while Silver stabilizes near 60 after falling from 71.16—the two markets are trading the same macro bet from opposite sides, and September's NFP report, including the wage component, could resolve both in the same session.

The OAT-Bund spread widened past 140.6bp, its widest since the 2012 eurozone debt crisis, as French 10-year yields surged to 4.935% while German Bund yields fell to 3.529%—a divergence pointing to a France-specific sovereign risk premium that EUR/CHF is now starting to transmit into FX.

Q4 opened as a continuation of Q3. Global sovereign bonds extended their selloff, the US 10-year Treasury yield rose to around 5.34%, the Dollar pushed higher after a sixth consecutive quarterly gain, and EUR/USD broke below 1.13. This came even though softer August PCE inflation had already reduced conviction in another Fed hike in October.

Gold's rebound from 4,110.50 nearly tested the 4,113.82 Fibonacci projection to the tick, preserving the corrective interpretation of the decline from 4,697.07, but the 10-year Treasury yield stayed pinned near 5.30% despite softer PCE inflation—leaving 4,234.68 and 4,334.57 as the two resistance levels bulls still need to clear.

Sterling rallied, Dollar fell and Aussie fell even harder. The difference was not the data alone, but where each central bank already stood before the numbers arrived.