Daily Market Outlook, September 9, 2025 

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

Munnelly’s Macro Minute…

Global markets maintained their upswing for the fifth consecutive day on Tuesday, fuelled by optimism surrounding a potential reduction in US interest rates. This sentiment spilt over to Asia, sparking a rally in technology stocks. MSCI’s global stock index appeared poised to close at another record high, with major tech players like TSMC and Alibaba driving gains in Asian markets. Share prices climbed in South Korea, Taiwan, and Hong Kong, although Indonesian stocks declined following the dismissal of the nation’s long-serving finance minister. US futures advanced as the S&P 500 approached a record high on Monday, while European contracts slipped amid political uncertainty in France. In Japan, markets reacted to fallout from Prime Minister Ishiba’s resignation, with the Nikkei 225 hitting a fresh intraday peak on Tuesday before pulling back. Japanese government bonds strengthened after Monday’s decline, as Ishiba’s departure heightened expectations for more accommodative fiscal policies. Oil prices rose for the second straight day, as investors assessed the impact of Saudi Arabia’s decision to lower prices for most of its oil grades, potentially signalling reduced demand. Meanwhile, iron ore prices climbed for the sixth consecutive day, on track for their strongest close in over six months, driven by expectations of increased demand from China. China’s export growth remained resilient in August despite US tariffs, with shipment values rising 4.4% y/y, pushing total exports to a record US$3.72 trillion on a 12-month basis. While exports to the US dropped 33.1% y/y to $316 billion, China offset losses by boosting trade with Europe and redirecting goods through transhippers like Malaysia, Indonesia, Thailand, and Vietnam. Efforts by the US to counter these flows, such as higher tariffs on Vietnam, have yet to significantly impact trade data due to implementation delays.

President Macron has announced his intention to appoint a new Prime Minister to replace Bayrou in the coming days, signalling he is not considering the snap election route despite the government losing a confidence vote last night. However, given the current parliamentary deadlock, it remains uncertain how a new Prime Minister could secure approval for the 2026 budget. While the euro showed no adverse reaction to the vote outcome, market expectations for a swift resolution to France’s political and fiscal challenges remain subdued. This uncertainty keeps the potential for yield spread volatility elevated—not only for France but also for other nations perceived by markets as fiscally vulnerable. The UK finds itself in a similar scenario ahead of the Budget announcement on 26 November. Ultimately, government policy decisions will likely play a significant role in driving cross-market gilt yield spreads. In the meantime, heightened focus on France raises the risk that UK gilts may be grouped with bonds from other fiscally constrained nations, leading to stronger correlations within this cohort. This trend, already evident, reflects a modern and less extreme version of the "core versus periphery" dynamic seen in the 2010s—though Italy occupies a markedly different position this time around. In short, if political uncertainty in France escalates in the coming weeks, UK gilts are unlikely to escape pressure stemming from volatility in French bonds.

Overnight Headlines

  • UK Chancellor To Tell Ministers To Prioritise Fight Against Inflation

  • Japan Markets Brace For Next Political Shift After Ishiba Exits

  • Goldman CEO: Rates Aren’t Too Restrictive, Contrasts With Trump

  • Trump Asks Supreme Court To Allow Withholding Of Foreign Aid

  • Trump Advisers Draft Report Criticising BLS Jobs Data Revisions

  • Gold Rallies To Record High Above $3,600/Oz As Fed Cut Bets Firm

  • US Consumer Borrowing Rises Most In Three Months On Credit Cards

  • Barclays CEO Urges UK To Focus On Investment Over Bank Tax

  • PNC To Acquire Colorado-Based Regional Bank In $4.1B Deal

  • Databricks Crosses $4B In Annual Revenue Rate

  • Salesforce Faces AI Age Test As Software Model Faces Pressure

  • Amazon Buys Stake In Latin America’s Rappi Delivery Platform

  • Lumber Prices Flash Warning Sign For US Economy

  • Intel Announces Top-Level Executive Shakeup; Products Chief Departs

  • Australia Sovereign Wealth Fund Returns 12.2% Amid Equity Surge

FX Options Expiries For 10am New York Cut 

(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)

  • EUR/USD: 1.1700-05 (1.7BLN), 1.1750-60 (1.6BLN), 1.1790-1.1800 (1.8BLN)

  • 1.1845-55 (596M), 1.1885-90 (1.2BLN)

  • EUR/CHF: 0.9385 (209M). EUR/GBP: 0.8600 (200M)

  • GBP/USD: 1.3595-1.3600 (585M), 1.3620 (300M)

  • AUD/USD: 0.6600 (724M)

  • NZD/USD: 0.5915 (512M), 0.5940 (202M)

  • USD/JPY: 146.80-85 (800M), 147.00 (1.4BLN), 147.25 (297M), 147.50 (521M)

  • EUR/JPY: 170.00 (530M), 172.00 (310M)

CFTC Positions as of the Week Ending 5/9/25 

  • Equity fund speculators have reduced their net short position in the S&P 500 CME by 52,369 contracts, bringing the total to 375,892 contracts. Equity fund managers have also decreased their net long position in the S&P 500 CME by 16,318 contracts, now totaling 851,040 contracts. 

  • Speculators have increased their net short position in CBOT US 5-year Treasury futures by 218,016 contracts, reaching 2,681,987 contracts. Net short positions in CBOT US 10-year Treasury futures have been trimmed by 15,471 contracts to a total of 868,358. Additionally, net short positions in CBOT US 2-year Treasury futures have increased by 33,001 contracts, leading to a total of 1,296,083 contracts. The net short position in CBOT US UltraBond Treasury futures has also risen by 14,274 contracts to 263,219. Speculators have upped their net short position in CBOT US Treasury bonds futures by 41,255 contracts, resulting in 77,268 contracts. 

  • In the cryptocurrency realm, the net short position in Bitcoin stands at -902 contracts. The Swiss franc shows a net short position of -25,888 contracts, while the British pound reports a net short position of -33,140 contracts. On the other hand, the Euro has a net long position of 119,592 contracts and the Japanese yen shows a net long position of 73,258 contracts.

Technical & Trade Views

SP500

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Above 6440 Target 6600

  • Below 6420 Target 6370

EURUSD 

  • Daily VWAP Bullish

  • Weekly VWAP Bullish

  • Below 1.1750 Target 1.15

  • Above 1.18 Target 1.1910

GBPUSD 

  • Daily VWAP Bullish 

  • Weekly VWAP Bullish

  • Below 1.36 Target 1.30

  • Above 1.3650 Target 1.3850

USDJPY 

  • Daily VWAP Bearish 

  • Weekly VWAP Bullish

  • Below 1.49 Target 1.45

  • Above 1.51 Target 1.54

XAUUSD

  • Daily VWAP Bullish 

  • Weekly VWAP Bullish

  • Above 3500 Target 3700

  • Below 3400 Target 3300

BTCUSD 

  • Daily VWAP Bullish 

  • Weekly VWAP Bearish

  • Above 110k Target 118k

  • Below 109k Target 105k