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Standard Chartered’s Edward Lee expects the Monetary Authority of Singapore (MAS) to deliver another very slight tightening in October, raising the SGD NEER slope to 1.5% from 1.25% while keeping the band parameters unchanged. Lee highlights broader inflation, upside risks to prices, firm growth and the likelihood that more of the H1-2025 pre-emptive easing will be unwound.

MAS poised for incremental tightening

"We expect the Monetary Authority of Singapore (MAS) to again “very slightly” increase the SGD NEER slope in October to 1.5% from 1.25% currently, while keeping the centre and width of the policy bands unchanged."

"We estimate that move at 25bps and expect another increment of the same size in October, consistent with a calibrated response to elevated uncertainty."

"This may be a close call, with a pause as the main risk."

"Furthermore, we think another 25bps of the H1-2025 pre-emptive easing is yet to be unwound."

"Inflation makes a strong case for continuing to tighten."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• XAG/USD rebounds above $61 as buyers defend $60 support.
• RSI climbs toward neutral, signaling improving momentum for bulls.
• Break above $62 exposes $64.12, $64.58 and $65.00 next.

Silver (XAG/USD) price drifts higher by over 1.14% on Monday, even as US Treasury yields rise and the Greenback extends its gains by 0.26%, as per the US Dollar Index (DXY). XAG/USD trades at $61.13, after bouncing off daily lows of $60.36.

XAG/USD Price Forecast: Technical Outlook

Price action suggests a bottom might be forming, as the white metal remains clearly above $60.00, increasing the likelihood of a bounce to test key resistance above $64.00.

Momentum is shifting neutral as the Relative Strength Index (RSI) is bearish, but the index is approaching the 50-neutral level, an indication that buyers are strengthening.

If XAG/USD surpasses $62.00, the next stop is the area near the 50- and 100-day Simple Moving Averages (SMAs) at $64.12 and $64.58, respectively. Above is $65.00, a psychological resistance ahead of the challenge of the September 22 high of $67.55 and $70.00.

Conversely, for a bearish reversal, Silver must drop below the October 2 low of $59.69, then the August 3 low of $56.57, and finally the July 17 low of $54.77.

XAG/USD Price Chart – Daily

United Overseas Bank (UOB) strategist Quek Ser Leang reports USD/CNH slipped to 6.7008 before closing at 6.7041, with intraday price action expected to stay between 6.7000 and 6.7105. For the coming 1–3 weeks, he continues to see the pair confined to a 6.6950–6.7270 range. On a 1–3 month view, he expects USD/CNH to keep edging lower as long as it trades below the cloud’s upper boundary near 6.7815.

Dollar-Offshore Yuan trapped in tight range

"24-HOUR VIEW: We expected USD to “trade in a range between 6.7085 and 6.7230 last Friday.” Our view was incorrect, as USD dropped to a low of 6.7008 before trading sideways for the rest of the session. USD closed 0.15% lower at 6.7041. The slight increase in downward momentum is insufficient to indicate a sustained decline. Today, USD is likely to trade sideways between 6.7000 and 6.7105."

"1-3 WEEKS VIEW: In our most recent narrative from last Tuesday (29 Sep, spot at 6.7110), we highlighted that “for the time being, we expect USD to trade in a range between 6.6950 and 6.7270.” We continue to hold the same view for now."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• Gold slips below $4,150 as US yields hit 5.34%.
• October Fed hold odds reach 77%, but December hike odds stay elevated.
• Dollar strength and upbeat sentiment erode bullion’s safe-haven appeal.

Gold (XAU/USD) prices drift lower on Monday as a strong US Dollar and high US Treasury yields undermine the precious metal, which has failed to rally as investors expect a less hawkish Federal Reserve (Fed) and have priced out a rate hike this month. At the time of writing, XAU/USD trades at $4,132, down 0.27%.

Bullion struggles as Dollar strength and rising yields overwhelm dovish repricing

Market mood is upbeat, hurting bullion’s safe-haven appeal, which is also weighed down by the rise of the US 10-year Treasury note yield, which is up six basis points at 5.341%. Consequently, the US Dollar Index (DXY), which measures the buck’s performance against six currencies, is up 0.25% at 102.17.

US services sector activity declined marginally as the ISM Services PMI in September decreased from 55.4 to 54.9, slightly below the expected 55. Input costs kept climbing, surpassing forecasts, with prices paid rising from 72.6 to 74, higher than the predicted 73.3. Meanwhile, new orders slowed, but the employment component grew.

Last week, the Federal Reserve’s (Fed) favorite inflation gauge, the Core PCE, was mostly unchanged from the previous print, which triggered a reaction by investors, who trimmed Fed hawkish bets, boosting Gold prices.

Money markets price in a nearly 77% chance that the Fed will stand pat at the October meeting, but the odds of a rate hike in December are at 88%, according to Prime Terminal data.

Friday’s September Nonfarm Payrollscame in lower than expected and sent XAU/USD to a weekly peak of $4,227 before sellers stepped in and sent spot prices below the $4,150 psychological figure.

The jump in US Treasury yields undermines Gold's non-yielding status, even though it can also serve as a hedge against inflation.

Tensions in the Middle East escalate as Yemeni forces clashed with Houthis over Bab al-Mandab. Yemeni forces, with air support, announced they captured Al-Makah after exchanging fire with Houthi militias.

Investors brace for the ADP Employment Change 4-week average data ahead of the September Federal Open Market Committee (FOMC) meeting minutes on Wednesday, which will lay the path for the future of interest rates in the US.

XAU/USD technical analysis: Gold price pressured on the downside, as RSI stays bearish

Price action shows Gold is poised to consolidate further below $4,150, with eyes set on challenging the first support at $4,100. Momentum suggests further downside is expected, as the Relative Strength Index (RSI) is trending lower, nearing oversold conditions.

If XAU/USD falls beneath $4,100, it paves the way for a move to the $4,000 figure, slightly above the July 29 swing low of $3,996. Once those two levels are taken out, the year-to-date (YTD) low of $3,941 would be next.

For a bullish reversal, bullion buyers must push prices above $4,200 and clear the 100- and 50-day Simple Moving Averages (SMAs), at $4,274 and $4,327, respectively. Once hurdled, up next is $4,500.

Traders have taken about one quarter-point hike out of their European Central Bank (ECB) forecasts since mid-September, betting the ECB will stop raising rates because of a French debt selloff. The same bet failed twice in 2022 and 2023, when the ECB kept raising rates through financial stress because inflation was above its 2% target. Euro-area inflation came in at 3.8% in September.

The ECB's deposit rate, which it pays banks on overnight deposits and which sets Euro borrowing costs, is 2.50% after hikes in June and September. Germany's two-year bond yield moves with what traders expect from the ECB over the next two years. On the Bundesbank's daily series, it reached 3.32% on September 28, the highest since October 2008, and has since fallen 0.3 points to 3.02%. That high was a hundredth of a point above the yield on March 8, 2023, two days before Silicon Valley Bank failed. 

France's bond selloff took about one hike out of the ECB's path 

The gap between French and German 10-year borrowing costs reached 1.54 percentage points on October 2, the widest since 2011, after its biggest one-week widening in 17 years. Selling spread to Italian, Belgian and Greek bonds, and Spain called a snap election for November 29. France's 2027 budget targets a deficit of 5% of output, from 5.4%, against a European Union (EU) cap of 3%, which closes a sixth of the gap. When yields jump like that, governments and companies pay more to borrow without the ECB doing anything, so traders assume the ECB needs to do less.

Money-market pricing, the bets traders place on the deposit rate after each meeting, shows how much came out. On October 5, that pricing showed 0.28 of a hike at the October 29 meeting, 0.89 by December 17 and 2.69 by September 2027. In mid-September, it had October at about three in four and about one more hike through mid-2027. Priced out still means 2.69 hikes.

ECB President Lagarde gave traders their argument on September 28. She told the European Parliament that higher long-term rates would slow growth and spread energy costs into other prices by more than ECB staff had projected. ECB Chief Economist Lane made the same point on October 5. The two-year yield's biggest one-day fall, 0.19 of a point, came on October 2, when the French gap peaked and yields fell everywhere after a weak US jobs report.

Twice in 2022-2023 the two-year yield lost a point on stress and got it back

The first scare came in June 2022, when Italian borrowing costs jumped. Germany's two-year yield fell 1.05 points between June 16 and August 2, to 0.10%, because traders expected a slower ECB. The ECB raised rates by half a point on July 21, twice what it had signalled, then by three-quarters of a point in September and again in October. The yield was back above its June high on September 9, the day after the first of those three-quarter-point hikes.

The second came in March 2023, after Silicon Valley Bank failed and Credit Suisse shares fell to a record low. On March 15, traders priced the ECB's peak near 3%, down from 4% a week earlier, and the two-year yield fell 1.09 points in the eight sessions to March 20. The ECB raised rates by half a point on March 16 and four more times after that. It stopped at 4%, where traders had put the peak the week before Credit Suisse.

Both repricings unwound for the same reason. Core inflation, which strips out energy, food, alcohol and tobacco, was 3.7% in June 2022 and a record 5.7% in March 2023. Stress could move the date of a hike but not the need for one. By September 21, 2023, the two-year yield was back at 3.28%, almost all the way to its March 8 level.

Central banks gave each scare its own tool and kept rates on inflation

In June 2022, the ECB held an unscheduled meeting to steer reinvestments from its pandemic bond portfolio toward the countries under pressure. On July 21 it launched the Transmission Protection Instrument (TPI), a bond-buying backstop for countries whose borrowing costs run away from their fundamentals, alongside the half-point hike.

The Bank of England (BoE) bought long-dated government bonds between September 28 and October 14, 2022, to stop a fire sale by pension funds. Three weeks later it raised its rate by three-quarters of a point. The Federal Reserve (Fed) raised rates 12 days after Silicon Valley Bank failed. Then-Fed Chair Powell said on March 22, 2023, that tighter bank lending could do the work of a rate hike, and the Fed raised rates twice more.

ECB President Lagarde made the Powell argument about long-term yields on September 28. When the ECB launched the TPI, it said the backstop would let rate increases reach every euro country evenly. Bundesbank President Nagel said on October 1 that the ECB's job is price stability, not holding the gap between countries' borrowing costs at a particular level. The ECB's own September forecasts have inflation excluding energy and food at 2.6% in 2027 and 2.3% in 2028, above target throughout.

2011 is the year traders were right

The case against this is 2011. The ECB raised rates in April and July 2011 because energy was pushing inflation up, then cut them in November and December after the debt crisis reached Italy and Spain. Both hikes were gone by the end of the year.

ECB President Lagarde told French newspaper La Croix that this is not 2011. The difference is outside France, where Italy's 10-year premium over Germany averaged 5.19 percentage points in November 2011 and Spain's reached 5.55 in July 2012. Italy's touched about 1.1 points on October 1, and Spain's is about 0.65, less than half of France's.

The weak link is France, which has been in the EU's excessive deficit procedure (EDP), the process for governments running deficits above the rules, since July 2024. A country in the procedure qualifies for the TPI only if the EU hasn't found it failing to fix the deficit. The TPI has never been used, and the first country to need it may not qualify. If the selling reaches Italy and no tool fits France, the deposit rate is all that's left, and that is the 2011 template.

Core inflation is the other soft spot. At 2.5%, it is closer to 2011's 1.6% than to the 5.7% of March 2023, and most of the rise to 3.8% is energy, up 18.8% on the year. That headline rate is above 2011's 3.0% peak, and ECB President Lagarde has called the energy shock too large to look through.

The hike traders took out has a date: December 17

The lean is that December's hike is delivered and the 2027 hikes traders removed go back into the price. Both 2026 hikes came at meetings with new staff forecasts, in June and September, and October 29 has none. December 17 does, and money markets have 0.89 of a hike priced by then.

Germany's two-year yield is the gauge. A move back above 3.20%, where it traded before October 2, would say the stress is coming out of ECB pricing. Below 2.90%, its September 1 level, everything traders added around the September hike is gone. Italy's 10-year premium is the 2011 tripwire, and a move toward 1.5 points from about 1.1 would say the selling is no longer only French.

The Euro fell to its lowest against the US Dollar since May 2025 on Monday. It gains if December's hike goes back into the price and loses if Italy's premium widens. The call is wrong if the ECB holds on December 17 with core inflation at 2.5% or higher, because that would mean bond markets, not inflation, are setting euro-area rates.

• The Japanese Yen weakens as the wide yield differential supports the US Dollar.
• Japan’s relatively low interest rates and heavy debt burden weigh on the Japanese Yen.
• Traders await BoJ Governor Kazuo Ueda’s remarks and Japan’s wage figures.

The Japanese Yen (JPY) remains on the back foot against the US Dollar (USD) on Monday as the wide yield differential continues to favour the Greenback, while broader structural headwinds weigh on the Japanese currency. At the time of writing, USD/JPY trades around 158.10, up 0.17% on the day.

The benchmark 10-year US Treasury yield holds near 5.34%, close to levels last seen in 2002. Meanwhile, Japan’s 10-year government bond yield stands near 3.10%, its highest level in around 30 years. The spread between the two stands at 224 basis points.

The US Dollar also benefits from broad weakness in the Euro (EUR) amid concerns over France’s public finances. Meanwhile, traders show little reaction to the latest US business activity data. The final S&P Global Services Purchasing Managers’ Index (PMI) was revised slightly higher to 58.8 in September from 58.7, while the Composite PMI was confirmed at 58.4. In contrast, the ISM Services PMI eased to 54.9 from 55.4, narrowly missing the 55.0 forecast.

The US Dollar Index (DXY), which tracks the Greenback against six major currencies, trades around 102.26 after reaching 102.53 earlier in the day. US yields remain elevated as persistent inflation risks keep expectations of further Federal Reserve (Fed) tightening alive, while concerns over Washington’s deteriorating fiscal position add upward pressure on borrowing costs. However, softer-than-expected US employment figures have reduced the likelihood of an immediate rate increase.

According to the CME FedWatch Tool, traders now assign around a 21% probability of a rate hike at the Fed’s October 27-28 meeting, down from 70% a week ago. Markets await Wednesday’s Federal Open Market Committee (FOMC) meeting minutes for fresh guidance, with another increase before year-end still on the table.

On the Japanese side, the country’s heavy debt burden, relatively low interest rates and elevated Oil prices keep the Yen’s outlook vulnerable. Japanese Prime Minister Sanae Takaichi sought to reassure bond investors on Monday, saying the government would “control the annual debt issuance amount appropriately” while monitoring economic conditions, tax revenues, interest rates and debt-servicing costs.

Meanwhile, the Bank of Japan (BoJ) remains on a tightening path, but the Yen has struggled to benefit as other major central banks also maintain restrictive policy settings. Still, traders remain reluctant to build large bearish positions as USD/JPY approaches the 160.00 psychological mark, where the risk of intervention by Japanese authorities could increase.

Looking ahead, BoJ Governor Kazuo Ueda is scheduled to speak on Tuesday, followed by Japan’s Labour Cash Earnings data on Wednesday.

The US Dollar (USD) has picked up extra pace on Monday, reaching fresh tops on the back of persistent safe-haven demand, while fiscal concerns in Europe continued to weigh on the broader risk complex.

Here is what you need to know on Tuesday, October 6:

The US Dollar Index (DXY) has extended its move higher, revisiting the 102.50 region for the first time since April 2025 alongside a reignited upside impulse in US Treasury yields across the curve. The ADP Employment Change Weekly is due, followed by Balance of Trade results, the RCM/TIPP Economic Optimism Index, and the API’s weekly report on US crude oil inventories. In addition, the Fed’s Williams and Bowman are due to speak.

EUR/USD has kicked off its fifth consecutive week of losses, still suffering the constant bullish move in the US Dollar in combination with fresh fiscal jitters in the Euroland. Germany will release its Factory Orders data, while the S&P Global Construction PMI is also expected in Germany and the euro bloc, followed by EMU’s Retail Sales. Furthermore, the ECB’s Donnery, Buch, Cipollone and Elderson are expected to speak. 

GBP/USD has followed its risk-linked peers and started the week on the back foot, briefly slipping back below the key 1.3200 yardstick. The S&P Global Construction PMI will be the sole release across the Channel.

Further side-lined fashion saw USD/JPY navigate just above the 158.00 level, up modestly for the day. There will be a 10-year JGB Auction, which could gather some interest among investors. Additionally, the BoJ’s Ueda is due to speak.

AUD/USD has managed to build on Friday’s bounce, approaching the psychological 0.7000 hurdle despite further advance in the Greenback. In Oz, Westpac will publish its Consumer Confidence gauge.

Front-month WTI futures have added to Friday’s downtick and briefly pierced the $90.00 mark per barrel following increasing exports of crude oil from the Middle East coupled with the G7 announcement to release diesel and crude oil from their reserves.

Gold has traded in a bearish note, navigating just above the $4,100 mark per troy ounce on the back of extra gains in the US Dollar and the resumption of the upside impulse in US Treasury yields across the board.

ING’s report by Coco Zhang and Ewa Manthey explains how the United States is enhancing domestic Rare earth production. Federal support now includes grants, loans, equity stakes, purchase agreements and price floors for key products like NdPr oxide and magnets. New refining and magnet capacity is being announced, though high production costs mean some segments will scale more slowly.

Government-backed capacity expansion

"Federal support has extended well beyond the traditional tools of grants and loans, to purchase agreements, price floors, and equity investments."

"In June 2026, the Department of Commerce struck a deal with USA Rare Earth. In addition to $277m in direct grants and a $1.3bn senior secured loan to help develop vertically integrated production, the government will also acquire a 16% equity stake in the company, giving it a direct interest in the development of a domestic rare earth supply chain."

"Similarly, in 2025, the Department of Defence (DOD) announced it would acquire a 15% stake in MP Materials, alongside a 10-year purchase agreement for the company’s magnets and a 10-year price floor for neodymium-praseodymium (NdPr) oxide, a critical input for permanent magnets."

"These developments suggest government support is beginning to deliver results, with rising output in key supply chain bottlenecks and an ambitious pipeline of new capacity. However, high production costs remain key hurdles."

"As a result, some parts of the supply chain could scale rapidly, while others will take longer to develop."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• GBP/USD falls as French fiscal turmoil strengthens US Dollar demand.
• US services cool, but rising prices keep inflation concerns alive.
• Hawkish BoE signals limit Sterling losses ahead of Mann speech.

The Pound Sterling (GBP) dives more than 0.19% against the US Dollar (USD) at the beginning of the week, despite a dip in US services sector activity and elevated US Treasury yields. The GBP/USD trades at 1.3218 at the time of writing.

Sterling weakens as Eurozone stress outweighs softer US services momentum

Sentiment remains upbeat, with US equities edging higher, while the buck gains traction as the Euro (EUR) tumbles amid the fiscal crisis in France, widening spreads between OATs and German Bunds.

US data showed that September’s ISM Services PMI slowed from 55.4 to 54.9, below estimates of 55, while input costs continued to rise, above forecasts. Prices paid rose from 72.6 to 74, exceeding the 73.3 forecast, while new orders cooled and the employment sub-component increased.

In the meantime, tensions in the Middle East remain high as Yemeni forces clash with the Houthis as they aim to reclaim Bab al-Mandab. Recently, Yemeni Forces claimed that they’ve taken control of Al-Makah with air support, following an exchange of fire with Houthi militias.

This pushed Oil prices lower, with West Texas Intermediate (WTI), the US crude benchmark, losing almost 1%, down to $90.35. Notably, the US Dollar's positive correlation with WTI pushed the Greenback lower after the US Dollar Index (DXY) touched daily highs of 102.53.

The DXY, which measures the performance of the American currency versus six others, is at 102.25, up 0.32%.

In the UK, the S&P Global Services PMI exceeded estimates, rising to 52.1 from 51.7, but remained below August’s 52.5 print, indicating a moderate deceleration. Meanwhile, expectations that PM Andy Burnham plans to close ties with the European Union (EU), capped the drop of Sterling.

Additionally, remarks by Bank of England Governor Andrew Bailey and Deputy Governor Dave Ramsden increased the likelihood of further BoE tightening.

In the meantime, the UK economic docket is light, with traders eyeing speeches by BoE’s Catherine Mann. In the US, traders are eyeing the release of the FOMC's last meeting minutes on Wednesday.

GBP/USD Price Forecast: Technical Outlook

In the daily chart, GBP/USD trades at 1.3213, keeping a bearish near-term tone as spot holds well below the cluster of simple moving averages around 1.3451 and the former upward trend-line supports, now turned resistance, at 1.3556 and 1.3754. The downward trend-line barriers at 1.3306 and 1.3429 reinforce the notion of a capped market, while the Relative Strength Index (14) near 34 remains just above oversold territory, suggesting persistent selling pressure but with downside momentum losing some intensity.

With no clearly defined nearby support levels below 1.3213 in the presented dataset, focus stays on the topside where initial resistance emerges at the broken trend-line level around 1.3306, followed by the descending trend-line at 1.3429 and the triple simple moving average band near 1.3451. Above that, the reclaimed former support lines at 1.3556 and 1.3754 form a broader resistance zone that would need to be overcome to ease the current bearish bias and open the way for a more sustained recovery.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• EUR/CHF trades on the back foot as France’s fiscal troubles weigh on the Euro.
• The cross trades below the 50-day SMA, while the 100-day SMA near 0.9297 offers initial support.
• A bearish MACD crossover and RSI near 36 point to growing selling pressure.

EUR/CHF holds modest losses on Monday as growing fiscal concerns in France weigh on the Euro (EUR). However, the cross has reversed most of its intraday decline as buying interest in the Swiss Franc (CHF) remains limited due to Switzerland’s wide interest-rate gap with other major economies and the Swiss National Bank’s (SNB) readiness to counter excessive Franc strength. At the time of writing, EUR/CHF trades around 0.9318 after hitting an intraday low of 0.9272.

Euro pressured as France fiscal strains complicate ECB backstop

Strategists at Brown Brothers Harriman note that the Euro is lagging its peers, with “EUR is underperforming all major currencies, with EUR/USD dropping briefly to an intra-day low at 1.1161, its lowest level since May 2025.” They highlight that “France’s budget crisis is spilling into other Eurozone sovereign bond markets, widening yield spreads to Germany,” amplifying concerns around fiscal risk across the bloc.

BBH points out that the ECB’s Transmission Protection Instrument “provides a backstop against disorderly spread widening, but activation is contingent on EU member state pursuing ‘sound and sustainable fiscal and macroeconomic policies.’” In their view, “France's deteriorating finances complicate the case for intervention, although broader contagion would increase pressure on the ECB to act.”

At the same time, BBH notes that ECB Chief Economist Philip Lane has underlined that the “increase in long-term interest rates constitutes a material tightening of financial conditions for the euro area.” Taken together, they argue this leaves the Euro “facing downside pressure from both rising fiscal risk and a potentially shallower ECB hiking cycle.”

Technical analysis

The daily chart shows EUR/CHF under renewed selling pressure after a sharp rejection from the 0.9480 area. The cross has fallen below the 50-day Simple Moving Average (SMA) at 0.9387, weakening the near-term picture. However, it remains above the 100-day SMA at 0.9297 and the 200-day SMA at 0.9239, keeping the broader structure relatively supported.

Momentum indicators lean bearish. The Relative Strength Index (RSI) has dropped to around 36, reflecting growing selling pressure but remaining above oversold territory. The Moving Average Convergence Divergence (MACD) line has crossed below the signal line, while the histogram has moved deeper into negative territory.

On the downside, the 100-day SMA near 0.9297 offers initial support, followed by Monday’s low around 0.9272. A clear break below this area could expose the 200-day SMA at 0.9239. On the topside, the 50-day SMA at 0.9387 acts as immediate resistance, followed by 0.9430. A sustained move above this level could open the door to the 0.9500 psychological mark.

(The technical analysis of this story was written with the help of an AI tool. Know more.)