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The week kicked off well on both sides of the Atlantic as investors collectively shrugged off fears over the escalating US-China trade war, deteriorating credit conditions, a US government shutdown, the French credit downgrade, a major outage at Amazon Web Services (the world’s largest cloud provider) that froze many online services globally, renewed fighting in Gaza over the weekend, and the not-so-great meeting between Zelensky and Trump. Instead, bad loan worries eased and market attention shifted to the possibility of yet another round of easing tensions between the US and China — and I found this hilarious — Trump told Fox News that his earlier threat of 100 % tariffs on China was “not sustainable”, anyway.

Consequently, the S&P 500 rose more than 1 % over the session and nearly 2 % over the past two sessions, led by a tech rally. Amazon — the company whose AWS problems caused widespread disruptions — gained 1.61 % as investors were reminded how integral AWS is to global business. Apple printed its first all-time high this year after reports emerged that iPhone 17 sales were 14 % higher than comparable launches of prior models — though this does nothing to change that Apple still lags in the AI race driving valuations elsewhere in Big Tech.

In Europe, defense stocks rebounded strongly after Friday’s dip amid Middle East risk and another unproductive meeting between Trump and Zelensky — the US Secretary Pete Hegseth wearing a tie that eerily resembled the Russian flag drew attention, underlining how awkward that meeting might have been. With ASML also up 2.66 %, the STOXX 600 approached record highs. The CAC 40 traded near its own highs despite upward pressure on borrowing costs following the S&P downgrade last Friday. In the UK, the FTSE 100 gained 0.52 %, led by defense and mining names. Energy lagged as crude continued to slip on fading geopolitical risk, with US oil consolidating below $60 per barrel. Fresnillo — one of the gold miners with a stand-out year — added 56 points to the index and is now up over 350 % year-to-date, outperforming both gold and Bitcoin.

Gold itself saw tight demand near record highs despite a risk-on environment, confirming again that the fundamental drivers behind gold have shifted. Since Trump reentered the White House, gold has rallied on both risk-on and risk-off days, and irrespective of whether US yields move up or down. Many investors now believe a $5’000/oz target for gold is plausible and might not be difficult to surpass. But there is a curious anomaly: volatility in gold is rising while the price is rising. That’s unusual — typically volatility compresses during sustained bullish trends and only spikes during panic selloffs. This divergence could suggest that risks to the gold rally are building beneath the surface. If a correction comes, history offers a cautionary precedent: in March 2022, gold’s volatility index reached similar levels, and the price of an ounce fell about 20% over the following four months. Not a guarantee of repetition, but worth keeping in mind.

In global indices, Asia posted another strong session: Korea’s KOSPI hit fresh highs and Chinese stocks recouped losses. Australia’s ASX is testing record territory this morning, as well, on news that the US and Australia have signed a deal to increase US access to Australian rare earth metals — lifting mining names there. Meanwhile, rare earth and critical metals names appear poised for further gains, aided by the West’s push to reduce dependence on China. In Japan, the Nikkei hit a fresh record today after Takaichi won a key vote to become Japan’s next Prime Minister. She will push for looser monetary policy and larger fiscal stimulus — if – of course - markets will let her. Because note that long-term Japanese yields are already near multi-decade highs, which suggests she and Abe (to whom she’s compared) do not share the same margin to maneuver.

In FX, the US dollar is slightly stronger this morning but remains under pressure from trade uncertainty, the looming US shutdown, and a dovish pivot in Federal Reserve (Fed) expectations. The USDJPY is surging on the Takaichi news: her likely softer BoJ stance suggests more convergence with the Fed, which could push the pair higher. The EURUSD is finding it hard to take further advantage of dollar weakness, as widening French-German yield spreads (amid domestic political stress in France) weigh on euro demand. Across the Channel, Cable remains under pressure, as well — but the news that British pension funds and insurers may consider regional investment opportunities probably in exchange for better conditions (which could include tax breaks and regulatory easing) offers a possible tailwind for UK assets. Don’t bet the house on it — yet.

In focus today

Geopolitics are expected to be the main market driver as the data side remains relatively quiet. The main data release is set to be the Central Bank of Hungary's rate decision, which we - and the consensus - expect to be unchanged at 6.50%. Additionally, CPI figures for Canada will be released just after.

Economic and market news

What happened yesterday

In the Middle East, the ceasefire between Israel and Hamas resumed in the wake the most recent exchange of violence. Both sides, along with US President Trump, agreed that the brokered ceasefire remains in place.

In the trade war, the US and Australia signed a critical minerals deal, with both nations committing to invest over USD 3 billion in critical mineral projects within the next six months. The deal includes the Pentagon investing in a gallium refinery in Australia and Australian pension funds increasing investments in the US by almost USD 1 trillion to USD 1.44 trillion in total.

Equities: Global equities kicked off the week with a strong risk-on flavour, at least at first glance, as major indices rose more than 1% across regions and, broadly, across sectors. The US led the cyclical tilt, but gains were widespread. That said, despite the strong equity performance, the cyclical rotation, and a lower VIX, this was not a classic risk-on day.

Long-end US yields moved lower, gold continued its surge, and oil actually fell. In other words, this looked more like an "everything rallies" driven by liquidity and optimism rather than renewed confidence in macro fundamentals. Such rallies tend to have a disinflationary bias, with easier financial conditions feed back positively into the broader economy, but without necessarily signalling a strong fundamental reacceleration. In the US yesterday, Dow +1.1%, S&P 500 +1.1%, Nasdaq +1.4%, Russell 2000 +1.9%. Asian equities are higher again this morning, and both European and US futures are extending the positive tone.

FI and FX: Market optimism carried into a relatively quiet start to the week, with risk assets performing well. Front-end US yields were broadly unchanged, while the 10-year Treasury yield declined 4bp, once again moving below 4.00%. The move left the US curve modestly bull flattening. EUR/USD is drifting lower, with the USD broadly firmer across the G10 to start the week. USD/JPY has moved higher toward 151, as the JPY weakens across the G10 with Sanae Takaichi set to become Japan's next prime minister. EUR/SEK price action has been defined by the broader 10.90-11.10 range. Similar to SEK, the Norwegian Krone also enjoyed the improving risk appetite during yesterday's session with EUR/NOK completing the full move down to the 11.70 support level.

Daily Pivots: (S1) 1.1629; (P) 1.1652; (R1) 1.1666; More…

Intraday bias in EUR/USD remains neutral and further decline is in favor as long as 1.1778 resistance holds. Break of 1.1540 will resume the decline from 1.1917 and target 1.1390 support, or even further to 38.2% retracement of 1.0176 to 1.1917 at 1.1252. On the upside, through, break of 1.1778 will target retest of 1.1917 high instead.

In the bigger picture, considering bearish divergence condition in D MACD, a medium term top is likely in place at 1.1917, just ahead of 1.2 key psychological level. As long as 55 W EMA (now at 1.1290) holds, the up trend from 0.9534 (2022 low) is still expected to continue. Decisive break of 1.2000 will carry larger bullish implications. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep outlook bearish.

Daily Pivots: (S1) 1.3389; (P) 1.3416; (R1) 1.3432; More...

Intraday bias in GBP/USD stays neutral and another fall is mildly in favor as long as 1.3526 resistance holds. Break of 1.3247 will target 1.3140 cluster (38.2% retracement of 1.2099 to 1.3787 at 1.3142). Strong support is expected there to contain downside to complete the corrective pattern from 1.3787. On the upside, break of 1.3526 will target 1.3725/87 resistance zone.

In the bigger picture, rise from 1.0351 (2022 low) is still seen as a corrective move. Further rally could be seen to 61.8% projection of 1.0351 to 1.3433 (2024 high) from 1.2099 (2025 low) at 1.4004. But strong resistance could emerge from 1.4248 (2021 high) to limit upside. Sustained break of 55 W EMA (now at 1.3191) will argue that a medium term top has already formed and bring deeper fall back to 1.2099.

Daily Pivots: (S1) 0.7907; (P) 0.7925; (R1) 0.7945; More…

No change in USD/CHF's outlook and intraday bias stays neutral. Further decline is expected as long as 0.7984 resistance holds. On the downside, below 0.7872 will bring retest of 0.7828. Firm break there will resume larger down trend. However, break of 0.7984 will suggest that corrective pattern from 0.7828 is extending with another rising leg, and target 0.8075 again.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8332 support turned resistance holds (2023 low).

Risk appetite swept across Asian markets today, lifting equities to fresh records as political clarity in Japan and trade optimism across the region buoyed investor confidence. Nikkei 225 surged to another all-time high after the Liberal Democratic Party’s Sanae Takaichi won 237 of 465 votes in the lower house, securing her position as Japan’s next prime minister. Her victory — comfortably exceeding the 233 needed for a majority — will see her confirmed by the upper house later today and sworn in as Japan’s 104th leader, marking a historic milestone as the nation’s first female premier.

Markets welcomed the outcome as a stabilizing force after weeks of political speculation. Investors see Takaichi as pro-stimulus and business-friendly, supportive of both monetary easing and fiscal investment. That policy outlook, combined with a weaker Yen, drove renewed buying across sectors.

In South Korea, KOSPI also hit its sixth straight record high, propelled by mounting optimism over an impending U.S.–Korea trade agreement. Stocks extended last week’s rally after U.S. Treasury Secretary Scott Bessent said negotiations were “about to finish up.” A finalized deal could ease tariff burdens and boost industrial exports, further cementing Korea’s trade position amid a recovering global supply chain.

Australia joined the regional rally, with ASX posting another intraday record. Shares in major critical minerals and rare earth companies surged following Monday’s announcement of an USD 8.5B minerals deal between Washington and Canberra. The agreement, signed by U.S. President Donald Trump and Prime Minister Anthony Albanese, will channel funding into multiple projects aimed at strengthening defense manufacturing and energy security — key areas of long-term strategic alignment between the two allies.

The flurry of positive regional developments reinforced a broader sense of stability after months of volatility driven by global trade and policy uncertainty. Asian equities benefited from a synchronized wave of optimism that extended from Tokyo to Sydney, with traders rotating back into cyclical and export-linked sectors.

In the currency markets, moves were more contained. Yen is currently the weakest performer this week, while Sterling and Loonie follow, while Aussie outperforms, as Swiss Franc and Kiwi also are firm. Dollar and Euro trade mid-pack. Most major currency pairs and crosses are still locked within last week’s ranges, awaiting fresh catalysts for breakout. However, based on current momentum, there is potential for Dollar to climb up the ladder in the coming sessions.

In Asia, at the time of writing, Nikkei is up 0.67%. Hong Kong HSI is up 1.61%. China Shanghai SSE is up 1.25%. Singapore Strait Times is up 1.31%. Japan 10-year JGB yield is down -0.011 at 1.658. Overnight, DOW rose 1.12%. S&P 500 rose 1.07%. NASDAQ rose 1.37%. 10-year yield fell -0.021 to 3.896.

New Zealand trade deficit widens NZD -14B despite strong 19% export growth

New Zealand recorded another sizeable trade deficit in September 2025, as import growth outstripped exports despite solid overseas demand. Statistics NZ data showed goods exports rose 19% yoy to NZD 5.8B. Imports increased 1.6% yoy to NZD 7.2B. The result was a monthly deficit of NZD -1.4B, versus expectation of NZD -6B and prior month's NZD -1.2B.

Export strength was broad-based, led by double-digit gains to all major partners. Shipments to China jumped 24% yoy, Australia 28%, and Japan 23%, while sales to the U.S. and EU rose 10% and 15%, respectively.

On the import side, purchases from China climbed 16% yoy, while inflows from the EU and Australia rose 7.3% and 6.4%. Offsetting that, imports from the U.S. slumped -30%, and South Korea fell -4.8%.

WTI oil to find floor near 55 as oversupply mostly priced in

Oil prices continued to drift lower this week but signs are emerging that the pace of decline is easing. With much of the supply glut now likely reflected in prices, there is potential for WTI crude to stabilize around 55 handle, even if near-term weakness extends.

The downtrend persisted since OPEC and its allies started expanding production earlier in the year, and major institutions warn that oversupply may persist well into next year. Last week’s IEA forecast reinforced bearish sentiment, warning that the global oil market could swing into a 4 million barrel-per-day surplus by in. The agency cited sustained output growth and sluggish demand as key drivers.

At the same time, geopolitical backdrop has also turned calmer. Ceasefire between Israel and Hamas helped reduce the Middle East risk premium, dampening prices further as fears of supply disruption fade.

Technically, however, downside momentum in WTI is fading. Bullish convergence is starting to appear in 4H MACD, while WTI is pressing the lower boundary of its near-term descending channel. The 55.20 key support, marking this year’s low from April, may offer strong support and turn WTI into sideway consolidations. Nevertheless, break of 59.47 resistance is needed to indicate short term bottoming, or risk will remain on the downside.

USD/JPY Daily Outlook

Daily Pivots: (S1) 150.29; (P) 150.75; (R1) 151.21; More...

USD/JPY's break of 151.38 minor resistance suggests that corrective pullback form 153.26 has completed at 149.37 already. Intraday bias is back on the upside for retesting 153.26 resistance first. Firm break there will resume whole rise from 139.8y towards 158.86 resistance. On the downside, however, below 149.37 will target 55 D EMA (now at 148.78) instead.

In the bigger picture, current development suggests that corrective pattern from 161.94 (2024 high) has completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94 high. On the downside, break of 145.47 support will dampen this bullish view and extend the corrective pattern with another falling leg.

Daily Pivots: (S1) 150.29; (P) 150.75; (R1) 151.21; More...

USD/JPY's break of 151.38 minor resistance suggests that corrective pullback form 153.26 has completed at 149.37 already. Intraday bias is back on the upside for retesting 153.26 resistance first. Firm break there will resume whole rise from 139.8y towards 158.86 resistance. On the downside, however, below 149.37 will target 55 D EMA (now at 148.78) instead.

In the bigger picture, current development suggests that corrective pattern from 161.94 (2024 high) has completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94 high. On the downside, break of 145.47 support will dampen this bullish view and extend the corrective pattern with another falling leg.

Daily Pivots: (S1) 0.6492; (P) 0.6506; (R1) 0.6528; More...

AUD/USD is staying in consolidations above 0.6439 and intraday bias remains neutral. Further decline is in favor as long as 55 D EMA (now at 0.6542) holds. Below 0.6439 will target 0.6413 cluster support (38.2% retracement of 0.5913 to 0.6706 at 0.6403. Decisive break there will indicate bearish reversal after rejection by 0.6713 fibonacci level. Nevertheless, sustained trading above 55 D EMA will keep the rise from 0.5913 intact, and bring retest of 0.6706 high.

In the bigger picture, there is no clear sign that down trend from 0.8006 (2021 high) has completed. Rebound from 0.5913 is seen as a corrective move. Outlook will remain bearish as long as 38.2% retracement of 0.8006 to 0.5913 at 0.6713 holds. Nevertheless, considering bullish convergence condition in W MACD, sustained break of 0.6713 will be a strong sign of bullish trend reversal, and pave the way to 0.6941 structural resistance for confirmation.

Daily Pivots: (S1) 1.4014; (P) 1.4032; (R1) 1.4059; More...

USD/CAD is still extending consolidations below 1.4078 and intraday bias stays neutral. Further rally is expected as long as 1.3930 support holds. Current development suggest that rise from 1.3538 is reversing whole fall from 1.4791. Above 1.4078 will target 61.8% retracement of 1.4791 to 1.3538 at 1.4312.

In the bigger picture, price actions from 1.4791 medium term top is likely just unfolding as a correction to up trend from 1.2005 (2021 low). Based on current momentum, rise from 1.3538 is the second leg, and a third leg should follow before up trend resumption. That is, range trading is set to extend for the medium term. For now, this will remain the favored case as long as 1.3725 support holds.

Daily Pivots: (S1) 201.58; (P) 202.35; (R1) 202.86; More...

Outlook in GBP/JPY is unchanged and intraday bias stays neutral. On the upside, above 203.41 will suggest that pullback from 205.30 has completed, and bring retest of this high. Firm break there will resume larger rally to 61.8% projection of 184.35 to 199.96 from 197.47 at 207.11. However, break of 200.67 and sustained trading below 201.24 resistance turned support will raise the chance of bearish reversal, and bring deeper decline to 197.47 instead.

In the bigger picture, price actions from 208.09 (2024 high) are seen as a corrective pattern which might have completed at 184.35. Firm break of 208.09 high will resume the up trend from 123.94 (2020 low). Next target is 61.8% projection of 148.93 to 208.09 from 184.35 at 220.90. However, decisive break of 197.47 will dampen this view and could extend the corrective pattern with another fall.