Headline: Yen Weakness Deepens as European Stocks Power Higher
European markets advanced through the morning session as risk appetite improved, even as the Japanese yen extended its slide. Investors kept one eye on Washington, where progress on a US government funding measure eased shutdown concerns, while policy headlines from Tokyo and the European Central Bank shaped the macro backdrop.
Currency markets were led by a weaker yen, with USD/JPY pushing toward the 155 handle after touching 154.90. Verbal intervention from Japan’s finance ministry failed to arrest the move, as fiscal support signals from Prime Minister Takaichi and continued uncertainty over a clean exit from deflation weighed on the currency. The Australian dollar outperformed on the risk-on tone, while sterling slipped as recent gains faded.
Equities extended their rally, with major European indices up more than 1% and fresh record highs reported in the UK, Spain, and Italy. US stock futures advanced, led by technology, with Nasdaq futures up 0.6% and S&P 500 futures up 0.3%. In rates, the US 10-year yield eased to 4.083%, reflecting steady demand for duration amid improving visibility on US fiscal funding. ECB officials struck a confident tone, noting better-than-expected resilience across the euro area, while Germany’s final October CPI confirmed a 2.3% year-on-year reading.
Commodities were mixed. Gold bounced after an early dip below $4,100, recovering to around $4,131 as dip buyers re-emerged. Oil softened, with WTI down 1.1% to $60.34 in what could prove a pivotal week for crude. In digital assets, bitcoin rose 2.3% to about $105,050. On the data front, US MBA mortgage applications rose 0.6% week-on-week, reversing the prior decline.
Key Points: – USD/JPY neared 155 as yen selling persisted despite verbal intervention from Tokyo – European stocks gained over 1%, with record highs in the UK, Spain, and Italy – US futures firmed (Nasdaq +0.6%, S&P 500 +0.3%); US 10-year yields dipped to 4.083% – ECB officials highlighted economic resilience; Germany’s October CPI confirmed at 2.3% y/y – Gold rebounded to roughly $4,131; WTI crude slipped to $60.34 – AUD outperformed on risk appetite; US mortgage applications rose 0.6% week-on-week
