S&P 500 remains bid as EUR/GBP probes key resistance, silver price key support

Macro update

Global bond sell-off gathers pace: Longer-dated US Treasury yields climbed to multi-year highs, with the 10-year reaching a 19-year peak of 5.23% and the 30-year hitting its highest level since 2004. Rising yields pushed US mortgage rates to 7% and added further pressure to elevated equity valuations globally.

Markets ramp up rate-hike bets: Futures now indicate a 71% probability of another Federal Reserve rate increase next month, up from around 53% earlier this week, as hawkish policymakers signalled further tightening. Norway’s Norges Bank also raised rates, while Sweden’s Riksbank indicated it could follow suit by year-end.

Dollar set for weekly advance: The greenback has gained around 1% this week to a two-month high near 101.2, pushing the euro down to a two-month low of $1.1370 and leaving sterling close to a three-month trough around $1.3220. The yen remained near a three-week low at ¥158.8 per dollar.

Oil retreats after sharp surge: Brent slipped 0.8% to around $105.75 a barrel after jumping 3% overnight following a Houthi missile attack on Saudi Arabia. Traders continued to weigh the prospect of a US-Iran truce that could eventually reopen the Strait of Hormuz.

Asian stocks mixed in thin trading: Regional equities were subdued in holiday-affected trading, with mainland China, Taiwan and South Korea closed. Japan’s Nikkei gained 1%, while Hong Kong’s Hang Seng fell 1%, following a broadly flat Wall Street session in which the S&P 500 edged down 0.02%.

Trump-Xi talks extend tariff pause: Washington and Beijing agreed to prolong their tariff truce by two months, although the summit produced no major breakthroughs on AI, trade, Taiwan or the Iran conflict. Chinese stocks listed in Hong Kong subsequently came under pressure as investors assessed the limited progress.

S&P 500 recovers

The S&P 500's rise from last week's six-week low at 7,573 has taken it to this week's high at 7,782 before retracing lower, only to now head back up again. While Thursday's 7,663 low underpins, the late August-to-September highs at 7,756-to-7,782 are expected to be revisited. if overcome, the August all-time high at 7,816 will be in focus.

Were a fall through Thursday's low at 7,663 to occur, though, the mid-June-to-mid-July highs at 7,581-to-7,578 may be retested. Were these to give way, the mid-May, 22 June and 22 July highs at 7,530-to-7,517 may be hit.

Short-term outlook: bullish while above the 24 September low at 7,663

Medium-term outlook: neutral with a bullish bias while above the 9 June low at 7,238

S&P500 daily candlestick chart

EUR/GBP probes key resistance area

EUR/GBP is seen testing its February-to-late June lows at £0.8612-to-£0.8620 which represent key resistance. If overcome, the 11 May low at £0.8630 and the late March low at £0.8637 may be reached.

While the £0.8612-to-£0.8620 resistance area caps, though, a retracement back towards the 9 September high at £0.8595 and the late July-to-August highs at £0.8588-to-£0.8582 may ensue.

Short-term outlook: bullish while above the 22 September low at £0.8569

Medium-term outlook: neutral with a bullish bias while trading above the 12 August low at £0.8532

EUR/GBP daily candlestick chart

Silver price retests key support

The price of Silver revisits its key $63.2765-to-$61.0065 support zone. Provided it holds once more, a recovery towards the mid-August high at $66.8025 may ensue. Within it lies the mid-September low at $62.3325 which is key for the short-term trend.

For the bulls to be back in control the next higher 22 September peak at $67.5470 would need to be exceeded.

Short-term outlook: neutral while remaining above the 14 September low at $62.3325

Medium-term outlook: neutral with a bullish stance while above the 22 July high at $60.9365

Silver daily candlestick chart