GLOBAL MARKETS: STOCKS RALLY AS FED RATE HIKE EXPECTATIONS EASE

• Global equity markets are starting the week on a positive note following weaker-than-expected U.S. employment data. September nonfarm payrolls increased by just 29,000, significantly below expectations, while downward revisions to previous months’ figures further highlighted signs of cooling in the labor market. The data has reduced expectations for another Federal Reserve rate hike in October.
• Asian markets are trading higher, although activity remains relatively thin due to public holidays in China and South Korea. Japan’s Nikkei 225 has gained around 2.5%, supported by technology and semiconductor stocks. Nasdaq 100 futures are also pointing higher after the index closed at a fresh record on Friday, reflecting continued strength in AI-related companies.
• U.S. equities ended Friday higher, with the S&P 500 gaining 0.7%, the Dow Jones advancing 0.5% and the Nasdaq rising 1.2%. Technology and semiconductor stocks led the gains, while improving expectations for the Federal Reserve’s policy outlook provided additional support to investor sentiment.
• Currency and bond markets are showing mixed signals. The U.S. dollar has strengthened against the euro, with EUR/USD falling around 0.6% to 1.1185 amid growing concerns over France’s fiscal position and political uncertainty. Meanwhile, Treasury yields remain elevated despite easing expectations for an immediate Fed rate hike, keeping borrowing costs in focus.

OIL & GOLD: GEOPOLITICAL RISKS OFFSET SUPPLY IMPROVEMENTS

• Oil prices are edging lower as increased Middle Eastern exports and the G7’s decision to release emergency crude reserves help offset concerns over potential supply disruptions. Brent crude is trading around $101.60 per barrel, while WTI is hovering near $90.10. However, ongoing tensions involving the U.S., Israel and Iran continue to leave energy markets vulnerable to further volatility.
• Despite the recent decline, crude prices remain above $100 for Brent, keeping energy-related inflation risks elevated. Investors are closely monitoring developments in the Middle East, particularly the security of regional energy infrastructure and the potential impact on global supply routes.
• Gold is trading relatively flat near $4,145 per ounce as investors balance geopolitical uncertainty against elevated U.S. Treasury yields. While weaker employment data has reduced expectations for further Fed tightening, persistently high borrowing costs continue to limit the metal’s upside potential.
• European markets are also facing additional uncertainty from France’s fiscal and political situation. Concerns over government finances have pushed French bond yields higher relative to German Bunds, weighing on the euro and raising broader questions about financial stability across the Eurozone. The DAX and other European indices remain sensitive to developments in sovereign bond markets, energy prices and the broader interest-rate outlook.