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JGB futures spiked higher at the open, getting to a high of 136.53, but we are back at 136.08, +.17 versus settlement levels in latest dealings. Markets are digesting Takaichi's surprise LDP leadership win from the weekend, with the spike being attributed to reduced BoJ tightening odds. Our bias is even with today's spike, the bear threat for JGB futures likely persists. Key short-term resistance has been defined at 137.30, the Sep 8 high. We ended last week at 135.93.  

• The steepening bias is firmly intact. Front end JGB yields are down around 4bps for the 2yr, to 0.905%, while 3-7yr tenors are off around 2bps. The 10yr yield is up 1bps to 1.675%, while the 20-40yr tenors are up 7-10bps. The 2/10s curve is back to +77bp, +5bps stepper, the 2/30s curve is +236bps, +14bps steeper. Early Sep highs were at +245bps.
• Oct hike pricing for the BOJ has fallen back to an implied rate of around 0.53% (effective policy rate of 0.477%). We were at 0.62% at Friday's close. A full rate hike is not priced in until around the April 2026 meeting. 

After rising 0.8% to $3886.54/oz on Friday after a peak of $3891.74, which was below Thursday’s new record of $3896.85, gold has jumped in Monday’s APAC trading to a new high of $3920.62, above round number support at $3900. It is currently around $3909 despite a stronger greenback (BBDXY +0.3%). It continues to be supported by the ongoing US government shutdown with no near-term resolution apparent and the uncertainty it creates around the economy as it weighs on activity but also delays key data releases. 

• Gold fell to $3838.16 during Friday’s APAC session but then trended higher and finished the week up 3.4%. Its uptrend continues with moving average studies in bull mode. It has breached both $3900 and $3909.4 resistance levels today.
• With US government-produced data on hold, private releases will be scrutinised. Friday’s October preliminary University of Michigan consumer confidence is likely to be this week’s focus.
• Silver rose 2.1% to $48.00 to be up 4.2% on the week. It trended higher through Friday to a peak of $48.374, above resistance levels at $48.052 and $48.232. It has started today around $48.25.
• The US dollar was slightly softer on Friday with the BBDXY down 0.1% but Treasury yields higher. Equities were little changed with the S&P flat and Euro stoxx up 0.1%. The S&P e-mini is currently up 0.3%. Oil prices were higher with Brent +0.4% to $64.36/bbl. Copper rose 2.7%.

• RES 3: 140.08 High Jun 13  
• RES 2: 139.05 High Aug 4 
• RES 1: 137.30 - High Sep 8 and key short-term resistance
• PRICE: 135.86 @ 15:51 BST Oct 03
• SUP 1: 135.67 - Low Sep 26 
• SUP 2: 135.39 - 1.618 proj of the Aug 4 - Sep 2 - Sep 8 swing (cont.)
• SUP 3: 134.69 - 2.000 proj of the Aug 4 - Sep 2 - Sep 8 swing (cont.)  

A bear threat in JGB futures remains present and the contract has pulled back from its recent highs. The latest sell-off has also resulted in a break of support at 136.19, the Sep 4 low and a bear trigger. Clearance of this level confirms a resumption of the downtrend and opens 135.39 next, a Fibonacci projection. Key short-term resistance has been defined at 137.30, the Sep 8 high.