Markets
- Stock markets bounce higher into the new week. The likes of the EuroStoxx50 adds 1.5%, Wall Street between 0.9% and 1.1% with some minor tech outperformance. Today’s risk on mood looks inspired by a decline in oil and gas prices after president Trump said he’s probably open to meet his Iranian counterpart on the sidelines of the UN summit in New York this week. Markets conclude that after weeks of re-escalation that now also involves a Houthi front, diplomacy might not be dead just yet. Brent tested the $100 barrier but holds north of that level nonetheless. Dutch TTF gas prices ease to €74.64 compared to the €80+ multiyear highs seen earlier this month. Constructive talks between USTS Bessent and the Chinese VP He Lifeng ahead of the presidential encounter on Thursday added to the upbeat sentiment. Lower energy prices gave core bonds some breathing room with European ones outperforming the US. German bund yields drop between 3 and 7 bps, led by the front end of the curve. UK gilt yields drop 8 bps in the 2-5yr bucket. US Treasury yields return 1-3 bps. Chicago Fed president Goolsbee (non-voter) warned for more and persistent supply shocks defining the central bank’s reaction function. He said the current volatile environment makes that the logic of “looking through” such shocks no longer hold. Goolsbee said the Fed’s response to supply shocks doesn’t need to be as aggressive to overheating demand, but it won’t be painless either.
- We keep a close eye on the yen the coming days. JPY weakness after Friday’s BoJ’s rate hike failed to impress, prompted rate checks by Japanese officials hours later. This serves as a final warning to actual interventions. Japanese markets are closed for three days and policymakers could be tempted by the liquidity-thinned environment to do so. USD/JPY is edging further north towards 157.3. Most other currencies trade calm. EUR/USD treads water around 1.148. DXY does the same just north of 100. Sterling steadies near Friday’s close around EUR/GBP 0.857. The Polish zloty in the CE region shrugs at Moody’s credit rating downgrade, banking on easing energy prices instead. EUR/PLN tests but stays north of the 4.35 support zone. In the alternative FX universe, bitcoin stages a sharp comeback. It started over the weekend with a bounce higher that lifted the digital currency out of its bull flag, a technical consolidation pattern which precedes a resumption of the previous trend – in this case the trend higher. BTC surges again today to a seven-month high of 85.3k, piercing through 84k resistance in the process.
News & Views
- Average paid Polish employment was 6.4mn FTE in August (excluding government administration and higher education institutions). That’s 0.2% lower than in July and 0.8% lower than in August of last year. The average monthly gross wage and salary was 2.6% lower in August in nominal terms than in July of this year, whilst it was 5.6% higher than in August 2025. The monthly decrease was due to a lower level of additional payments, including quarterly, annual and discretionary awards and bonuses. Polish markets don’t respond to today’s figures. The Polish zloty gets reprieve from lower energy prices today and a more constructive risk sentiment. EUR/PLN from a technical point of view returns towards previous resistance at 4.35 (July top). Returning below that mark is necessary to call off the downside alert in PLN. A strong technical front around 4.37/4.40 (2024 tops) remains nearby.
- The Hungarian ruling party chairman of parliament’s foreign policy committee asked for US support in the transitional period from an exemption from American penalties targeting the purchases of Russian energy. US Congress last week gave power to US President Trump to impose tariffs on buyers of Russian petroleum products. The current Hungarian exemption, lobbied for by previous PM Orban, expires on November 21. Hungary is diversifying its energy mix away from Russia, but the country’s oil remains part of the energy mix for the foreseeable future. The forint today follows Central-European peers on an appreciation path with EUR/HUF changing hands near lowest levels since the start of the month (362).
