EQUITIES: EU Cash Opening Calls

"EXCLUSIVE-MIMURA SAYS "I AM CLOSELY WATCHING WHETHER MARKETS CONTINUE TO RECEIVE AT FACE VALUE THE CLEAR JAPAN, US MESSAGE ON YEN"" RTRS
"EXCLUSIVE-JAPAN'S TOP CURRENCY DIPLOMAT MIMURA SAYS JAPANESE PRIME MINISTER, FINANCE MINISTER, US HAVE SENT CLEAR MESSAGE ON YEN"
" EXCLUSIVE-MIMURA: "I HAVE ABSOLUTELY NO SUCH CONCERN", WHEN ASKED ABOUT MARKET VIEWS FUNDING CONSTRAINTS MAY LIMIT JAPAN'S ABILITY TO CONDUCT YEN-BUYING INTERVENTION"
"- EXCLUSIVE-MIMURA: JAPAN REMAINS NEITHER SATISFIED NOR REASSURED ABOUT UNDERLYING YEN MOVES""

Spot gold and the broader precious metals complex is under significant pressure this morning, down over 3% to $4,155/oz. Price has cleared key short-term support at $4235.6, the Sep 16 low. The break confirms a resumption of the latest bear leg that started on Aug 25. This signals scope for an extension towards $4121.1, a Fibonacci retracement and the next important short-term support.

• The backdrop of higher energy inflation and rising government real yields has been a headwind for gold through September. A perceived recovery in Fed credibility following Chair Warsh’s Jackson hole speech at the end of August and the subsequent hawkish hike in September has also removed a support factor.
• 5-year US real yields are up over 4bps from Friday’s close to 2.66%. However, the magnitude of today’s gold decline is far larger than implied by the year-to-date beta with real yields.
• CFTC data as of September 22 saw net non-commercial longs in gold futures fall by 4.5k contracts, after a 1.6k fall the week prior. Net longs are now 55% of OI, down from 57% at the end of August. 

The ifo Employment Barometer rose slightly to 95.1 points in September, up from 94.8 points in August. This is the highest value in the indicator since May 2025 but still represents contractionary territory. “Although the labor market is stabilizing, there is still no real recovery in sight [...] In manufacturing and trade, jobs are still being cut”, IFO concludes.

• Across sectors:
  • "In manufacturing, the situation has only marginally improved. The majority of companies are still planning to make do with fewer staff. New hires are planned only in the food industry and by manufacturers of data processing equipment, and electronic and optical products.
  • "Among service providers, plans for layoffs and hires are largely balanced. Engineering firms, legal and tax consultants, and auditors are looking to hire additional employees. Temporary employment agencies are also somewhat hopeful again. In trade, however, plans to cut jobs continue to predominate. In construction, the number of employees is expected to remain largely constant."
• Monthly German hard labour market data is scheduled for Wednesday. The unemployment rate is expected to remain unchanged at 6.4% with a net zero change in the number of unemployed (4k prior).