The euro zone bond market is confused, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on September 25

Global Market Review

1. European and American market conditions

The three major U.S. stock futures indexes fell collectively. European stock markets fell, with the Pan-European STOXX600 falling 0.5%, and the German DAX and the UK FTSE 100 both fell 0.4%.

2. Market news interpretation

Eurozone bond market is in confusion, and geopolitical risks have become "background noise".

⑴Eurozone bond yields are difficult to find direction on Thursday, as interest rate fluctuations continue to ease, and the market expects the European Central Bank to remain silent until the end of 2026. ⑵ Germany's 10-year yield fell 0.5 basis points to 2.74%, after it had previously risen intraday. German consumer confidence is expected to rise slightly before October, but is still in the negative range. German business confidence fell unexpectedly in September as the economic outlook remained weak. Germany's 2-year yield remained flat at 2.02%. ⑶ The market has recently strengthened its expectations that the European Central Bank will maintain high interest rates for a longer period of time, with traders pricing a 25 basis point rate cut in July at a 40% probability. ⑷ The current key interest rate is expected to be 1.97% in December 2026, xn--xm-6d1dw86k.compared with 2% at present. ⑸ The Swiss National Bank maintained its key policy interest rate at zero on Thursday, the lowest among major central banks. ⑹The yield on the 10-year U.S. Treasury bonds did not change much during the trading period in London, reaching 4.14%. ⑺ Italy's 10-year yield rose 1 basis point to 3.60%, and its yield difference with German government bonds was 85.5 basis points, the highest since September 8. ⑻Analysts point out that investors continue to show limited sensitivity to geopolitical developments. ⑼ MarketThe ongoing political turmoil in France is also becoming increasingly indifferent, even if the problem remains unresolved. ⑽The yield gap between safe-haven German Treasury bonds and French 10-year bonds stabilized at around 81 basis points, and the French OAT yield fell 0.5 basis points to 3.56%.

The Canadian economy is facing a critical test, and the data week ignites the foreign exchange market.

⑴ A number of important Canadian economic indicators will be released this week, among which July's employment, salary and job opening data will be released at 20:30 Beijing time on Thursday (September 25). ⑵ July GDP data will be released at 20:30 Beijing time on Friday (September 26). The market expects monthly month-on-month growth to be +0.1%, and the previous value is -0.1%. ⑶ During the same period, key sub-data such as quarterly annualized percentage changes, import quarterly percentages, export quarterly percentages, xn--xm-6d1dw86k.commercial inventory (Canadian dollars) and domestic demand quarterly percentages will also be released.

Trump's policy strikes in a row, with global markets surging undercurrents

⑴Trump told leaders of Arab countries and Muslim-majority countries that he would put pressure on Israel to not annex parts of the West Bank and support a U.S. peace plan against the Gaza war. ⑵ The United States will reduce tariffs on imported cars from the EU to 15%, dating back to August 1, a move that consolidates the terms of the framework trade agreement reached by the two sides this summer. ⑶ The Trump administration has launched 232 investigations into the import of robots, industrial machinery and medical equipment, and the U.S. Department of xn--xm-6d1dw86k.commerce has 270 days to submit recommendations on tariffs or other measures to the president. ⑷ The U.S. government is currently investigating the import of medicine, semiconductors and other key products, and will soon provide additional financial assistance to U.S. farmers, focusing on soybean, corn, wheat, sorghum and cotton farmers. ⑸ The U.S. Administration and Budget Agency plans to permanently reduce the size of government personnel when the government is shut down, especially for project employees that are not required by law to be retained. ⑹U.S. President Trump is seeking to visit Japan before the Asia-Pacific Economic Cooperation Leaders' Meeting in Gyeongju, South Korea on October 31 to meet with the new Japanese Prime Minister. ⑺The United States plans to provide Argentina with a currency swap of up to US$20 billion and is preparing to purchase foreign currency bonds in order to provide much-needed financial support to President Javier Mile.

British bond auctions ignited demand, and safe-haven funds were surging

⑴The UK Debt Management Office successfully sold 750 million pounds (about 1.01 billion US dollars) of gold-edged bonds in December 2038 in a systematic tender on Thursday (September 26). ⑵The total bid amount of this auction reached 2.462 billion pounds, far exceeding the issuance scale of 750 million pounds, and the final bid coverage ratio is as high as 3.28 times. ⑶The average yield of this batch of bonds with a face rate of 4.75% is 4.978%, the average price is 97.805, and the highest yield is 4.985%. ⑷ Strong bidding demand shows that despite the high yield level, long-term UK Treasury bonds are still attractive to international capital. ⑸ This result canIt can reflect that the market's demand for safe-haven allocation of high-quality sovereign debt is rising against the backdrop of concerns caused by Trump's tariff remarks.

European Central Bank liquidity black hole: overnight deposits surged by 2.64 trillion euros, and loan demand was exhausted

⑴ Liquidity data released by the European Central Bank on Thursday showed that the use of overnight loan facilities was only 21 million euros, a further decrease from 25 million euros the previous day. ⑵ The use of overnight deposit facilities reached 2642910 million euros, an increase of about 17.7 billion euros from the previous day's 2625202 million euros. ⑶ xn--xm-6d1dw86k.commercial banks' current account holdings in the ECB were 159,727 million euros, down about 98 billion euros from 169,530 million euros the day before. ⑷The scale of overnight deposits forms a huge contrast with the scale of overnight loans, and the scale of deposits is about 125,000 times the scale of loans. ⑸ This data reflects that the banking system deposits huge liquidity at the European Central Bank rather than for interbank lending or lending to the real economy. ⑹The overnight deposit scale of more than 2.6 trillion euros indicates that there is a significant risk aversion and a tendency for liquidity hoarding in the financial market. ⑺The decrease in current account holdings contrasts with the increase in overnight deposits, indicating that banks are adjusting the allocation structure of their liquid assets. ⑻ Extremely low overnight loan usage indicates weak financing demand in the interbank market, and market confidence needs to be restored. ⑼ The data highlights the current fund allocation dilemma faced by the European banking system, and a large amount of funds have been deposited in the central bank account and failed to effectively enter the real economy cycle.

The German economy is expected to recover in the next two years

⑴ Five major economic research institutions said on Thursday that the German economy is gradually xn--xm-6d1dw86k.coming out of the trough and is expected to recover certain momentum in the next two years. The latest forecast raises the growth rate in 2025 to 0.2%, higher than the previous expectation of 0.1%, and maintains the forecast of a 1.3% growth in 2026, while the growth rate in 2027 is expected to be 1.4%. ⑵ Institutions pointed out that the new government's increase in infrastructure and defense spending will support growth in the long term, but will still be dragged down by global trade frictions in the short term. German Chancellor Meltz promised to boost growth after taking office in May this year, but reform progress was considered to be less than expected. ⑶ Expansion of government spending will provide stimulus for the next few years, but the relevant funds are issued slowly than budgets, and loan arrangements are partly used to avoid the expected fiscal consolidation. ⑷ In terms of the labor market, the unemployment rate is expected to rise from 6.0% in 2025 to 6.3% in 2026, and then fall to 5.6% in 2027. The labor market is expected to improve as the economy recovers. ⑸ At the same time, the increase in actual disposable income is expected to promote the development of private consumption and related service industries. Inflation is expected to remain around 2.0% during the forecast period.

Russia plans to extend the ban on refined oil exports until the end of the year

⑴ According to the International News Agency, Russian Deputy Prime Minister Novak said that the government plans to impose a ban on diesel exports on resellers until the end of the year. ⑵ At the same time, the gasoline export ban will be extended until the end of the year, and will apply to resellers and manufacturers, but under the intergovernmental agreementSupply is not affected.

Boxi-Herbia inflation fell to 4.1% in August

⑴Boxi-Herbia annual inflation rate fell to 4.1%, lower than 4.8% in July, ending a continuous upward trend. ⑵ The growth rate of food and non-alcoholic beverages slowed to 9.2%, the catering and hotel industries fell to 7.2%, housing and utilities prices fell to 0.2% from 1.4%, and other goods and services fell to 3.5%. Clothing and footwear prices fell further by 5.7%. ⑶ At the same time, the price increase of furniture and household equipment rose slightly to 1.1%; alcoholic beverages and tobacco remained at 3.7%, and health care remained at 6.1%. ⑷From month-on-month, consumer prices fell by 0.2% in August, reversing the increase of 0.2% in July.

South Africa's PPI rose to a one-year high in August

⑴ South Africa's August Producer Price Index (PPI) rose 2.1% year-on-year, higher than 1.5% in July, and rebounded for the third consecutive month, setting a new high in the past year. ⑵ The price increase of food, beverages and tobacco expanded to 4.3%, of which meat, fish, fruits, vegetables and fats rose by 11% year-on-year. Furniture and other manufacturing products rose 8.3% year-on-year, non-metallic mineral products rose 6.3%, transportation equipment rose 1.6%, and metal, machinery and xn--xm-6d1dw86k.computer equipment rose from 0.1% to 1.1%. ⑶ On the downward trend, the prices of coke, petroleum, chemical, rubber and plastic products fell by 1% year-on-year, paper products and print products fell by 0.5%, and electrical machinery and xn--xm-6d1dw86k.communication metering equipment fell by 1%. ⑷From month-on-month, PPI rose 0.3% in August, lower than 0.5% in July.

Greece's credit growth rate hit a record high in the past three years

⑴ In August, the overall credit scale of Greece's economy increased by 7.4% year-on-year, higher than 7.2% in July, the fastest growth rate since December 2022. ⑵ Among them, the year-on-year growth rate of private sector credit rose slightly to 10.6%, higher than 10.5% in July, with net financing inflows of 166 million euros in that month, reversing the net outflow of 1.26 billion euros last month. ⑶ The year-on-year growth rate of government departments accelerated from 2.0% in July to 2.4%, but the net financing outflow of 189 million euros in that month, a reversal from the net inflow of 509 million euros last month.

UK retail sales declined for twelve consecutive months

⑴The British Federation of Industry (CBI) Distribution Trade Survey showed that the weighted balance of retail sales in September was -29%, slightly better than -32% in August, but still lower than the market's expectations -26%, and is expected to further deteriorate to -36% in October. ⑵This means that annual sales have declined for twelve consecutive months, reflecting the continued weak demand environment for the retail industry. The survey shows that retailers generally believe that sales performance is still "soft" and the outlook for October is even bleaker. ⑶ According to sub-item data, online sales changed from +3% in August to -24%, wholesale sales accelerated, and automobile trade fell the most severely, reaching -67%. Overall distribution sales volume fell -35% in September, and the decline in October is expected to ease. ⑷CBI economist tableIt said weak demand, US tariffs and high corporate taxes continued to suppress the retail industry and called on the government to avoid increasing corporate burdens in the fall budget to rebuild market confidence.

India Sensex fell for five consecutive days to hit a new low for more than two weeks

⑴ On Thursday, India's BSESensex index fell 0.6%, closing at 81,160 points, a new low since September 9, and has closed down for the fifth consecutive trading day. ⑵ Market sentiment is suppressed by multiple factors, including the potential impact of the increase in H-1B visa fees on IT xn--xm-6d1dw86k.companies' profits, uncertainty in US-India trade negotiations, and the continued outflow of foreign capital. ⑶ In terms of individual stocks, Trent, PowerGrid, Tata Automobile, TCS, AsianPaints, NTPC, Adani Port and BajajFinance ranked among the top in the declines; those with stronger performances include Bharat Electronics, AxisBank, Bharti Airtel and HDFCBank.

The UK's 10-year Treasury yield rose to 4.7% fiscal pressure was highlighted

⑴ The UK's 10-year Treasury yield rose to 4.7%, reflecting market concerns brought about by fiscal policy and political uncertainty. Recently, debate broke out within the Labor Party over differences in fiscal positions, and Greater Manchester Mayor Burnham proposed to increase the loan by 40 billion pounds, which sparked strong criticism. ⑵ British Treasury yields rose faster than Germany and the United States, limiting the policy space of Chancellor Rachel Reeves. In recent years, demand for auctions of five-year, nine-year and 30-year Treasury bonds has dropped to multi-year lows, and investors question whether the government can balance spending and fiscal rules. ⑶ In terms of economic data, the S&P Global Purchasing Managers Index in September showed that private sector activity slowed down significantly, the growth rate of the service industry weakened, and the manufacturing industry further shrank. The Bank of England kept interest rates unchanged and remained cautious, and the market expects the next rate cut to postponement until 2026.

The Hungarian Central Bank evaluates the impact of government measures on income and inflation

⑴ In its quarterly inflation report, the Hungarian Central Bank stated that a series of government measures launched this summer, including a public sector salary increase, housing support for civil servants and a subsidized loan program, is expected to increase residents' disposable income in 2026, equivalent to 1.5% of the total economic volume. ⑵ Prime Minister Orban is facing the most difficult general election next year, with economic stagnation and high inflation hindering room for interest rate cuts. Its policy portfolio includes large-scale household tax cuts, preferential loans for first-time home buyers and pension increases. The central bank pointed out that additional income will drive consumption, but interest expenses paid by the government to households will drop significantly. ⑶ The central bank kept the benchmark interest rate unchanged at 6.5% at Tuesday's meeting, the highest level in the EU. The central bank stressed that austerity policies are still necessary to curb inflation expected to rise in 2026 as government measures drive consumption. ⑷Orban’s latest key measure is the “Housing Startup Plan”, providing first-time home buyers with a loan of 3% interest rate, up to 25 years, and a down payment ratio of 10%. The central bank expects the plan to significantly boost consumption and loan demandbeg. ⑸ The central bank estimates that the balance of household loans may increase by 17% to 20% by the end of 2025 and further expand to 18% to 22% in 2026, but there is great uncertainty. ⑹The Monetary xn--xm-6d1dw86k.commission’s benchmark scenario forecasts that the average inflation in 2026 will be 3.8%, higher than the mid-term target of 3%. The overall inflation risk will be upward, while the economic growth risk will be downward.

3. Trends of major currency pairs in the New York Stock Exchange before the market

Euro/USD: As of 20:05 Beijing time, the euro/USD rose, now at 1.1741, an increase of 0.02%. Before the New York Stock Exchange, (Euro-USD) settled in the last day trading, taking advantage of the key support stability of 1.1730, trying to recover some of yesterday's trades while trying to unload some obvious oversold conditions on the relative strength indicator, with positive overlap signals indicating an attempt to regain momentum.

GBP/USD: As of 20:05 Beijing time, GBP/USD fell and is now at 1.3423, a drop of 0.18%. Before the New York Stock Exchange, the (GBPUSD) price rose slightly on the last trading day, trying to regain some of the previous lost ground, taking advantage of the obvious oversold conditions on the relative strength indicator, especially when positive signals appear there.

Spot gold: As of 20:05 Beijing time, spot gold rose, now at 3751.52, an increase of 0.42%. Before the New York Stock Exchange, the (gold) price rose on the last trading day, after the previous downward journey was designed to find higher lows as a basis for supporting its recovery, which is trading along the support trend line of the track when the main bullish trend dominates in the short term.

Spot silver: As of 20:05 Beijing time, spot silver rose, now at 44.751, an increase of 1.98%. Before the New York market, the (silver) price fluctuated in the last intraday trading, trying to obtain bullish momentum that could help it recover and regain its strong uptrend. The main bullish trend dominated the short term and traded along the support trend line. At the same time, it utilized the dynamic support represented by the exchange above the EMA50, and in addition, relative strength indicators reached severe oversold levels relative to price movement, which increased the chances of a rapid recovery in bullish momentum in the near future.

Crude oil market: As of 20:05 Beijing time, US oil fell and is now at 64.600, a drop of 0.62%. Before the New York Stock Exchange, the price of (crude oil) fell on the last trading day, which was a natural profit-taking after the previous rise, trying to transfer some obvious overbought situations to the relative strength indicator, with negative overlap signals appearing, which may provide an opportunity to collect its positive power.

4. Institutional View

ECB Officials: Inflation target has been achieved without rushing to adjust interest rates

⑴ Peter Kazimir, a member of the ECB Management xn--xm-6d1dw86k.committee, said that policy makers have reached inflation targets, so there is no need to rush to adjust interest rates further. In his speech in Bratislava, Kazimir pointed out: "We can proudly say that we have achieved our goals and now we need to be patient and determined and ready to take action when the time is right." ⑵ He further added: "In the current era of rapid changes, our position is by no means boring. Our task is to collect and analyze data, and with existing flexibility and capabilities, respond when it is really necessary." ⑶ European Central Bank President Christine Lagarde said that the ECB's monetary policy is currently in a "well position". She stressed that as inflation remains at the target level, the market generally believes that borrowing costs will not be further reduced.

The above content is all about "[XM Foreign Exchange Market Review]: The euro zone bond market is confused, and the short-term trend analysis of spot gold, silver, crude oil and foreign exchange on September 25" is carefully xn--xm-6d1dw86k.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!

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