• President Trump weighed strikes against the Houthis in Yemen
• Iran sets conditions for talks amid warning of US onslaught
• AMD hits $1 trillion market cap for the first time as stocks rides 5-day rally
• Nasdaq adds 2.5% as falling oil prices ease inflation fears and boost sentiment

FX Analysis

USD consolidated the recent gains printing an inside day after Friday’s move to fresh cycle highs before selling emerged. Crude oil prices sunk more than 4% and below $100 on hopes that President Trump may meet the Iranian President later this week at the UN. The greenback looks quite fully priced for the recent shift in US yields. It’s a near coin toss bet on a Fed rate hike at the next meeting in late October. Energy prices and data will guide those expectations and markets with them, especially as this week’s data calendar is light. Thursday’s Trump/Xi summit will be of interest, with positive trade headlines potentially providing some support to the buck.

EUR also consolidated its recent breakdown as prices tracked just above Friday’s recent low at 1.1454. This is possibly bearish consolidation before more downside, with little major support until 1.14 and below. Two more heavy regional election losses by the ruling party grabbed the headlines. But they will only be a market issue if the reform agenda is negatively impacted.

GBP followed the euro’s price action with cable tracking just above recent lows around 1.3335. UK-US yields spreads have moved modestly against sterling. Last week’s BoE meeting signalled that energy prices are the key factor for a November rate hike. Meantime, fiscal issues are moving into view with budget leaks and expectation managements very likely over the next few weeks.

JPY weakened as markets digested Friday’s BoJ disappointing rate hike.  Policymakers were only moderately hawkish, with two dovish dissenters potentially making it harder to hike in the near future. This was a noted contrast relative to the messaging that had been delivered in the lead-up to the rate decision. Markets are closed for fall holidays this week, reopening on Thursday.

Stock Market Analysis

US stocks: The S&P 500 added 1.49% to close at 7,765. The Nasdaq closed up 2.83% at 30,482. The Dow Jones settled higher by 0.71% at 5`2,054. The majority of sectors were higher, with Communication Services, Technology and Consumer Discretionary outperforming, while Energy, Utilities and Consumer Staples the three sectors in the red. Meta surged 11.3% with reports of a strong start for its Muse AI gent, which could boost revenues. AMD (+10%) joined the $1 trillion club as chipmakers (Intel +12.1%) rallied on that AI-driven demand. The record high positioned it as key rival to Nvidia in the graphic processing unit. The stock has surged 185% in 2026. Paramount slipped 2.9% as it settled with US states in a big step towards closing its Warner Bros (+10.8%) merger. Moderna hit a fresh one-month high, advancing 12.2% on cancer vaccine optimism.

Asian Stocks: Futures are positive. APAC stocks were mixed with geopolitics taking centre stage. The ASX 200 was muted with mixed M&A headline and more RBA rate hike calls. The Nikkei 225 was closed for a holiday. The Hang Seng and Shanghai Comp were slightly higher with focus on the Trump/Xi summit. US Treasury Secretary Bessent described talks as “successful” on trade and AI, while the two sides agreed to hold another meeting on AI dialogue.

Gold & Silver Analysis

Gold pulled back after two days of gains, printing an inside day. Prices traded just above the 100-day SMA at $4,328. See below for more.

Chart of the Day – Gold awaiting next major catalyst

Gold edged lower at the start of the week as investors assessed the implications of last week’s first rate hike since 2023 by the Fed. The prospect of further policy tightening is real and a headwind. Comments from policymakers reinforced concerns that inflation remains elevated. That supports expectations that rates will stay higher for longer. While tighter monetary policy remains an obstacle for bullion, ETF holdings are sitting at a six-month high. Continued central bank buying should also help to limit downside.

Chart wise, prices have eased back from overbought conditions and a cycle high at $4,697 posted in late August. The 50-day SMA offered support last week, now at $4,287. If we lose that, then $4,000 is the next, very strong support zone. Buyers will aim for the major Fib level (38.2%) of the high to low 2026 move at $4,575, with the 200-day SMA just below at $4,532.