FOREX: JPY, CHF Remain Bid, Although USD Recovery Coincides with EM Weakness

EQUITY ROLL PACE: December has been the front Month for US already this Week, we'll look for Europe to also switch into Tomorrow.

As expected some Desks have favoured to Roll, Close positions ahead of the Fed.

US:

• ESA: 74%.
• NQA: 59% (below pace).
• DOW: 73%.

EU (As of Yesterday):

• VGA: 67%.
• Banks: 70%.
• Stoxx600: 73%.
• Dax: 60%.
• FTSE: 67%.

• The Euribor implied terminal rate (associated with the ERM6 contract) is currently 1.95%. This level is little changed since the ECB’s September decision on Thursday, but up almost 20bps compared to just before the hawkish leaning July decision. Further out the curve, implied rates are little changed relative to July.
• Incoming data will determine whether terminal rate expectations are appropriate, while pricing further out the curve will likely be dictated by the implementation and associated multipliers of increased German fiscal spending.
• There’s little change in EUR STIRs relative to yesterday’s close. ECB-dated OIS price ~11.5bps of easing through July 2026.
• In an interview with Die Welt, ECB Vice President de Guindos emphasised that “if the situation changes, we [the ECB] will adjust our stance accordingly”. While not giving much explicit away, it seems de Guindos is more focused on downside activity/inflation risks than other members of the Executive Board (e.g. Lagarde and Schnabel).
• A reminder that de Guindos will appear in a public MNI Connect event tomorrow at 0900BST.
• Today’s regional calendar includes the ECB’s latest forward-looking wage tracker, which is expected to continue signalling a deceleration in compensation pressures. Final August inflation is also due.
• Several ECB speakers are scheduled, most interestingly the new Bank of Portugal Governor Pereira at 1100BST. 

• RES 4: $43.272 - 2.500 proj of the Jul 31 - Aug 14 - 20 price swing
• RES 3: $43.000 - Round number resistance
• RES 2: $42.974 - 2.382 proj of the Jul 31 - Aug 14 - 20 price swing
• RES 1: $42.972 - High Sep 16       
• PRICE: $41.883 @ 8:12 BST Sep 17
• SUP 1: $40.635 - 20-day EMA 
• SUP 2: $39.042 - 50-day EMA
• SUP 3: $36.965 - Low Aug 20  
• SUP 4: $36.216 - Low Jul 31 and a key support

Trend signals in Silver remain bullish and the latest pullback is considered corrective. The metal traded higher last Friday, delivering a fresh cycle high. The extension earlier this week confirms a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. MA studies are in a bull-mode position, reinforcing current conditions. Sights are on $42.974 next, a Fibonacci projection. Support to watch is $40.635, the 20-day EMA.