ECB minutes due out today

The main event of the day is the ECB’s meeting minutes which are set to be released today.

MORNING OVERVIEW

We’re looking forward to the release of the ECB’s last meeting minutes, in order to gain insight into the bank’s deliberations in their meeting in which they hiked by 25 basis points.

MARKET SNAPSHOT

KEY MARKET THEMES

01 — ECB meeting minutes due out today

The ECB is due to publish the account of its September policy meeting today, offering a closer look at the Governing Council’s discussion before it raised all three key interest rates by 25 basis points. Market participants may be reading it closely to judge how united policymakers were and which considerations tipped the decision. Moreover, considering the persistently high energy prices, market participants may be looking into clues as to how prolonged high energy prices factored into the bank’s decision, which could provide insight into the bank’s next possible actions should prices remain high. In turn a hawkish statement may provide support for the common currency and vice versa.

Market implication (EUR): N/A

02 — France’s sovereign debt narrative

Bloomberg reports that nearly €215 billion of French corporate bonds now trade at lower yields than government debt, an almost 18-fold increase since the start of 2026. Some 38% of the country’s high-grade company debt was indicated below government yields of similar maturity on Wednesday, according to Bloomberg data. The inversion is tied to missed deficit targets, a stalled budget, with France heading to the polls next year to vote for their next President. Therefore, market participants may be watching for spillover into other markets, especially French banks, where Bloomberg says default insurance costs have been rising faster than for other European lenders. Overall, continued sovereign stress could weigh on the euro, yet strong demand for French corporate debt suggests the strain may stay concentrated in government bonds.

Market implication (EUR): Bearish

03 — UK House Prices Flat in September as Lloyds Flags Resilient but Cautious Market

Brent crude topped $105 a barrel on Thursday, its highest level in nearly a month, as supply disruption concerns intensified. Reports that the White House asked the Pentagon to draw up strike options against Iran, together with President Trump’s comment that he no longer wants a deal with Tehran, have heightened geopolitical risk, while attacks on Gulf shipping and the Strait of Hormuz have escalated. Prices also found support from the approach of Tropical Storm Isaias, which has allegedly closed around 25.1% of US Gulf of Mexico oil production as of Wednesday. Therefore, market participants may be pricing in a larger risk premium as both geopolitical and weather-related supply threats build.

Market implication (OIL) : Bearish

WHAT MATTERS TODAY

ECB meeting minutes released

Time (GMT+2): 14:30

Expected: N/A
Previous: N/A

Potential market reaction:
N/A

Minneapolis Fed President Kashkari speaks

Time (GMT+2): 17:40

Expected: N/A
Previous: N/A

Potential market reaction:
N/A

ASSET FOCUS

[Gold / Commodities]

XAU/USD appears to be moving in a downwards fashion. We opt for a bearish outlook  for the bullion’s price. Supporting our case is the RSI indicator below our chart which currently registers a figure below 40 implying a strong bearish market sentiment, in addition to the MACD indicator below our chart. For our bearish outlook to continue we would require a break below our 4080 (S1) support level, with the next possible target for the bears being our 3945 (S2) support line. On the other hand, for a bullish outlook we would require a clear break above our 4200 (R1) resistance line with the next possible target for the bulls being our 4350 (R2) resistance level. Lastly, for a sideways bias we would require gold’s price to remain confined between our 4080 (S1) support level and our 4200 (R1) resistance line.

KEY LEVELS

• Resistance (R1): 4200
• Resistance (R2): 4350
• Support (S1): 4080
• Support (S2): 3945

Technical View: Bearish

CROSS-ASSET VIEW

TRADING SPHERE VIEW

Bearish for the EUR

Our base case:
Continued political uncertainty in France, Germany and Spain which are currently seeing a shift in support from the incumbent government to the opposition raises concerns in the Zone.

What would change our view:
Polling data showcasing support for the incumbent Governments

RISKS TO THE VIEW

Snap elections being called

Snap elections being called in France and Germany.

TODAY’S WATCHLIST

01 ECB minutes

02 Riksbank Governor Theeden’s speech

03 Fed Kashkari’s speech

04 Fed Musalem’s speech